New Fair Deal Banking and Housing Stability Act of 2013 - Amends the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (FHEFSSA), the Federal National Mortgage Association Charter Act (FNMACA), and the Federal Home Loan Mortgage Corporation Act (FHLMCA) to repeal housing goals and related provisions, including the Housing Trust Fund and the Capital Magnet Fund, with respect to the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) (government sponsored enterprises) (GSEs).
Amends the FNMACA and the FHLMCA to limit Fannie Mae and Freddie Mac mortgage purchases on property comprising 1- to 4-family dwelling units.
Amends the FHLMCA to repeal the authority of banking entities with respect to Freddie Mac transactions.
Amends the FNMACA and the FHLMCA to: (1) reduce GSE conforming loan limits, and (2) set a loan-to-value limitation on GSE mortgage purchases.
Amends the FHEFSSA to: (1) replace mandatory risk-based standards for GSEs with mandatory non-risk-based standards, and (2) increase the minimum and critical capital levels for GSEs.
Amends the Housing and Community Development Act of 1992 to place specified restrictions on the mortgage assets owned by GSEs
Repeals the FNMACA and the FHLMCA, and denies Fannie Mae and Freddie Mac any authority to conduct new business.
Pledges the full faith and credit of the United States to pay all amounts which may be required under existing Fannie Mae and Freddie Mac obligations. Prescribes requirements for winding down Fannie Mae and Freddie Mac operations.
Amends the National Housing Act to revise requirements for Federal Housing Administration (FHA) credit programs and: (1) require mortgagees to repurchase defaulted mortgages in certain circumstances, (2) prohibit mortgage insurance for cash-out refinancings, and (3) prohibit mortgage insurance on a 1- to 4-family residential property for which the seller contributes more than 3% of the total closing costs toward the purchaser's acquisition of the property.
Reduces guarantees of mortgages by requiring an increase in FHA downpayment requirements.
Terminates FHA credit guarantees five years after enactment of this Act, and transfers FHA functions to the Secretary of the Treasury.
Amends the FNMACA to limit Government National Mortgage Association (Ginnie Mae) guarantees.
Abolishes Ginnie Mae and transfers all of its functions to the Secretary.
Repeals the Community Reinvestment Act of 1977, the Home Mortgage Disclosure Act of 1975, certain risk retention requirements of the Dodd-Frank Wall Street Reform And Consumer Protection Act, the Affordable Housing Program of the Federal Deposit Insurance Act (FDIA), and other specified federal law.
Repeals transportation planning requirements and rescinds unobligated balances of funds made available to carry them out.
Terminates Department of Housing and Urban Development (HUD) sustainable communities initiatives and makes a similar related rescission.
Requires the appropriate federal regulators to set the capital standards for financial companies, which shall maintain sufficient capital to remain adequately capitalized.
Amend the FDIA to: (1) reduce from $250,000 to $150,000 the amount of the standard maximum deposit insurance amount of the Federal Deposit Insurance Corporation (FDIC), and (2) repeal FDIC Administrator authority to make systemic risk determinations.
Amends the Federal Reserve Act to repeal the unusual and exigent authority of the Board of Governors of the Federal Reserve.
Renames the stabilization fund in the Treasury as the Special Drawing Rights Fund, and directs the Secretary to liquidate all property in the Fund, other than Special Drawing Rights, and to use all such amounts to reduce the public debt.
Expresses the sense of Congress that the appropriate congressional committees should each report legislation proposing changes to existing law to accommodate bankruptcy proceedings for failing multinational financial institutions.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3550 Introduced in House (IH)]
113th CONGRESS
1st Session
H. R. 3550
To stabilize the housing and banking sectors by eliminating policies
that distort markets and facilitate risky lending, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
November 20, 2013
Mr. Amash (for himself, Mr. Duncan of South Carolina, Mr. Jordan, Mr.
Lamborn, Mr. McClintock, Mr. Meadows, Mr. Price of Georgia, and Mr.
Salmon) introduced the following bill; which was referred to the
Committee on Financial Services, and in addition to the Committees on
Appropriations, Science, Space, and Technology, Transportation and
Infrastructure, and the Judiciary, for a period to be subsequently
determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To stabilize the housing and banking sectors by eliminating policies
that distort markets and facilitate risky lending, and for other
purposes.
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 ``New Fair Deal
Banking and Housing Stability Act of 2013''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title and table of contents.
TITLE I--REDUCING RISKY LENDING AND HOUSING MARKET INSTABILITY
Subtitle A--Withdrawing Failed Government Mortgage Corporations
Part 1--Immediate Reforms of Government-Sponsored Corporations
Sec. 101. Repeal of housing goals for enterprises.
Sec. 102. Repeal of Housing Trust Fund.
Sec. 103. Repeal of Capital Magnet Fund.
Sec. 104. Limitation on enterprise mortgage purchases.
Sec. 105. Repeal of banking agencies' authority relating Freddie Mac
transactions.
Part 2--Making Space for Private Secondary Markets
Sec. 111. Reduction of enterprise conforming loan limits.
Sec. 112. Loan-to-value limitation on enterprise mortgage purchases.
Sec. 113. Increased capital standards for enterprises.
Sec. 114. Enterprise portfolio limitations.
Part 3--Abolition of Fannie Mae and Freddie Mac
Sec. 121. Abolishment of enterprises.
Subtitle B--Termination of Insurance for Banks' Mortgage Lending
Part 1--Immediate Reforms of FHA Credit Programs
Sec. 131. FHA lender repurchase requirement.
Sec. 132. Prohibition of FHA mortgage insurance for cash-out
refinancings.
Sec. 133. FHA limitation on seller concessions.
Part 2--Reducing Taxpayer Guarantees of Mortgages
Sec. 141. Reduction of FHA mortgage insurance coverage.
Sec. 142. Increase in FHA downpayment requirement.
Part 3--Termination of FHA Credit Guarantees
Sec. 151. Termination of FHA insurance authority.
Subtitle C--Ending Guarantees for Government Mortgage-Backed Securities
Sec. 161. Limitation on GNMA guarantees.
Sec. 162. Abolishment of Ginnie Mae.
Subtitle D--Repealing Regulations That Promote Risky Lending
Sec. 171. Repeal of the Community Reinvestment Act of 1977.
Sec. 172. Repeal of Dodd-Frank credit risk retention provisions.
Sec. 173. Repeal of Dodd-Frank ability to repay and qualified mortgage
provisions.
Sec. 174. Repeal of the Home Mortgage Disclosure Act of 1975.
Sec. 175. Repeal of Federal Home Loan Banks Affordable Housing Program
and housing goals.
Sec. 176. Repeal of FDIC Affordable Housing Program.
Subtitle E--Stopping Subsidies for Certain Obstacles to Housing
Construction
Sec. 181. Repeal of transportation planning provisions; rescission.
Sec. 182. Termination of HUD sustainable communities initiatives;
rescission.
TITLE II--ENDING BANK BAILOUTS AND RESTORING MARKET DISCIPLINE
Subtitle A--Reducing Risks to Bank Depositors and Other Creditors
Sec. 201. Capital requirements.
Sec. 202. FDIC insurance.
Subtitle B--Repeal of Bailout Authorities
Sec. 211. Repeal of FDIC powers under the systemic risk determination.
Sec. 212. Repeal of unusual and exigent authority of the Federal
Reserve.
Sec. 213. Exchange Stabilization Fund.
Subtitle C--Bankruptcy, Not Bailouts, for Complex Financial
Institutions
Sec. 221. Reforming the bankruptcy code to accommodate failing
financial institutions.
TITLE I--REDUCING RISKY LENDING AND HOUSING MARKET INSTABILITY
Subtitle A--Withdrawing Failed Government Mortgage Corporations
PART 1--IMMEDIATE REFORMS OF GOVERNMENT-SPONSORED CORPORATIONS
SEC. 101. REPEAL OF HOUSING GOALS FOR ENTERPRISES.
(a) Repeal.--The Federal Housing Enterprises Financial Safety and
Soundness Act of 1992 is amended by striking sections 1331 through 1336
(12 U.S.C. 4561-6).
(b) Conforming Amendments.--Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 is amended--
(1) in section 1303(28) (12 U.S.C. 4502(28)), by striking
``, and, for the purposes'' and all that follows through
``designated disaster areas'';
(2) in section 1324(b)(1)(A) (12 U.S.C. 4544(b)(1)(A)), by
striking clauses (i), (ii), and (iv);
(3) in section 1339(h) (12 U.S.C. 4569(h)), by striking
paragraph (7);
(4) in section 1341 (12 U.S.C. 4581)--
(A) in subsection (a)--
(i) in paragraph (1), by inserting ``or''
after the semicolon at the end;
(ii) in paragraph (2), by striking the
semicolon at the end and inserting a period;
and
(iii) by striking paragraphs (3) and (4);
and
(B) in subsection (b)(2)--
(i) in subparagraph (A), by inserting
``or'' after the semicolon at the end;
(ii) by striking subparagraphs (B) and (C);
and
(iii) by redesignating subparagraph (D) as
subparagraph (B);
(5) in section 1345(a) (12 U.S.C. 4585(a))--
(A) in paragraph (1), by inserting ``or'' after the
semicolon at the end;
(B) in paragraph (2), by striking the semicolon at
the end and inserting a period; and
(C) by striking paragraphs (3) and (4); and
(6) in section 1371(a)(2) (12 U.S.C. 4631(a)(2)), by
striking ``with any housing goal established under subpart B of
part 2 of subtitle A of this title, with section 1336 or 1337
of this title,''.
(c) Repeal of Reporting Requirements.--
(1) Fannie mae.--Section 309 of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1723a) is amended
by striking subsection (n).
(2) Freddie mac.--Section 307 of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1456) is amended by
striking subsection (f).
(d) Termination of Affordable Housing Advisory Councils.--
(1) Fannie mae.--Section 309 of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1723a) is amended
by striking subsection (o).
(2) Freddie mac.--Section 307 of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1456) is amended by
striking subsection (g).
SEC. 102. REPEAL OF HOUSING TRUST FUND.
(a) Repeal.--The Federal Housing Enterprises Financial Safety and
Soundness Act of 1992 is amended by striking sections 1337 and 1338 (12
U.S.C. 4567, 4568).
(b) Conforming Amendments.--
(1) Federal housing enterprises financial safety and
soundness act of 1992.--The Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 is amended--
(A) in section 1324(b)(1)(A) (12 U.S.C.
4544(b)(1)(A)), as amended by the preceding provisions
of this Act--
(i) by striking clause (iii);
(ii) by striking the dash after ``which''
and inserting the text of clause (v) and a
period; and
(iii) by striking clause (v);
(B) in section 1339(b)--
(i) by striking paragraph (1);
(ii) by striking the dash after ``consist
of'' and inserting the text of paragraph (2)
and a period; and
(iii) by striking paragraph (2); and
(C) in section 1345 (12 U.S.C. 4585), by striking
subsection (f).
(2) HOPE for homeowners program.--Section 257(w) of the
National Housing Act (12 U.S.C. 1715z-23(w)) is amended--
(A) by striking paragraphs (2) and (3); and
(B) by redesignating paragraph (4) as paragraph
(2).
SEC. 103. REPEAL OF CAPITAL MAGNET FUND.
(a) Use of Funds.--Immediately upon the enactment of this Act, any
amounts in the Capital Magnet Fund established under section 1339 of
the Federal Housing Enterprises Financial Safety and Soundness Act of
1992 (12 U.S.C. 4569) shall be available to the Secretary of the
Treasury for use only for reducing the budget deficit of the Federal
Government.
(b) Repeal and Abolishment of Fund.--Section 1339 of the Federal
Housing Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4569) is hereby repealed and the Capital Magnet Fund established
under such section is abolished.
(c) Conforming Amendment.--Section 1303(24) of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C.
4502(24)) is amended by striking subparagraph (B).
SEC. 104. LIMITATION ON ENTERPRISE MORTGAGE PURCHASES.
(a) Fannie Mae.--Section 302(b) of the Federal National Mortgage
Association Charter Act (12 U.S.C. 1717(b)) is amended by adding at the
end the following new paragraph:
``(7) The corporation may only purchase, make commitments to
purchase, service, sell, lend on the security of, or otherwise deal in
a mortgage on a property comprising 1- to 4-family dwelling units
that--
``(A) bears interest at a rate that is fixed for the entire
term of the mortgage; and
``(B) is made--
``(i) to finance the purchase of such property that
shall be occupied by the mortgagor as the mortgagor's
principal residence; or
``(ii) to prepay or pay off the outstanding
principal obligation under an existing mortgage or loan
secured by the same property, which is occupied by the
mortgagor as the mortgagor's principal residence, but
not including a mortgage under which any portion of the
mortgage proceeds are used for any purpose other than
to prepay or pay off such existing mortgage or for any
settlement costs in connection with such mortgage, as
determined in accordance with guidelines issued by the
Director.''.
(b) Freddie Mac.--Section 305(a) of the Federal Home Loan Mortgage
Corporation Act (12 U.S.C. 1454(a)) is amended by adding at the end the
following new paragraph:
``(6) The Corporation may only purchase, make commitments to
purchase, service, sell, lend on the security of, or otherwise deal in
a mortgage on a property comprising 1- to 4-family dwelling units
that--
``(A) bears interest at a rate that is fixed for the entire
term of the mortgage; and
``(B) is made--
``(i) to finance the purchase of such property that
shall be occupied by the mortgagor as the mortgagor's
principal residence; or
``(ii) to prepay or pay off the outstanding
principal obligation under an existing mortgage or loan
secured by the same property, which is occupied by the
mortgagor as the mortgagor's principal residence, but
not including a mortgage under which any portion of the
mortgage proceeds are used for any purpose other than
to prepay or pay off such existing mortgage or for any
settlement costs in connection with such mortgage, as
determined in accordance with guidelines issued by the
Director.''.
SEC. 105. REPEAL OF BANKING AGENCIES' AUTHORITY RELATING FREDDIE MAC
TRANSACTIONS.
Section 305 of the Federal Home Loan Mortgage Corporation Act (12
U.S.C. 1454) is amended by striking subsection (b).
PART 2--MAKING SPACE FOR PRIVATE SECONDARY MARKETS
SEC. 111. REDUCTION OF ENTERPRISE CONFORMING LOAN LIMITS.
(a) Fannie Mae.--Paragraph (2) of section 302(b) of the Federal
National Mortgage Association Charter Act (12 U.S.C. 1717(b)(2)) is
amended by striking the 7th through 11th sentences and inserting the
following: ``Such limitations shall not exceed $417,000 for a mortgage
secured by a single-family residence, $533,850 for a mortgage secured
by a 2-family residence, $645,300 for a mortgage secured by a 3-family
residence, and $801,950 for a mortgage secured by a 4-family residence,
except that such maximum limitations shall be adjusted effective
January 1 of each year beginning after the effective date of the New
Fair Deal Banking and Housing Stability Act of 2013, subject to the
limitations in this paragraph. Each adjustment shall be made by
subtracting from such amount (as it may have been previously adjusted)
an amount equal to 20 percent thereof.''.
(b) Freddie Mac.--Paragraph (2) of section 305(a) of the Federal
Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) is amended by
striking the 6th through 10th sentences and inserting the following:
``Such limitations shall not exceed $417,000 for a mortgage secured by
a single-family residence, $533,850 for a mortgage secured by a 2-
family residence, $645,300 for a mortgage secured by a 3-family
residence, and $801,950 for a mortgage secured by a 4-family residence,
except that such maximum limitations shall be adjusted effective
January 1 of each year beginning after the effective date of the New
Fair Deal Banking and Housing Stability Act of 2013, subject to the
limitations in this paragraph. Each adjustment shall be made by
subtracting from such amount (as it may have been previously adjusted)
an amount equal to 20 percent thereof.''.
SEC. 112. LOAN-TO-VALUE LIMITATION ON ENTERPRISE MORTGAGE PURCHASES.
(a) Fannie Mae.--Section 302(b) of the Federal National Mortgage
Association Charter Act (12 U.S.C. 1717(b)) is amended by adding at the
end the following new paragraph:
``(7) Notwithstanding any other provision of law, the corporation
may not purchase, or make commitments to purchase, any mortgage on a 1-
to 4-family residence if the outstanding principal balance of the
mortgage at the time of purchase exceeds 95.0 percent of the value of
the property securing the mortgage, except that such percentage shall
be adjusted effective January 1 of each year beginning after the
effective date of the New Fair Deal Banking and Housing Stability Act
of 2013, by reducing such percentage by 1.5 percentage points.''.
(b) Freddie Mac.--Section 3052(a) of the Federal Home Loan Mortgage
Corporation Act (12 U.S.C. 1454(a)) is amended by adding at the end the
following new paragraph:
``(6) Notwithstanding any other provision of law, the Corporation
may not purchase, or make commitments to purchase, any mortgage on a 1-
to 4-family residence if the outstanding principal balance of the
mortgage at the time of purchase exceeds 95.0 percent of the value of
the property securing the mortgage, except that such percentage shall
be adjusted effective January 1 of each year beginning after the
effective date of the New Fair Deal Banking and Housing Stability Act
of 2013, by reducing such percentage by 1.5 percentage points.''.
SEC. 113. INCREASED CAPITAL STANDARDS FOR ENTERPRISES.
(a) Termination of Risk-Based Standard.--
(1) In general.--Section 1361 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4611) is amended--
(A) in the section heading, by striking ``risk-
based''; and
(B) in subsection (a)(1), by striking ``risk-
based'' and inserting ``non-risk-based''.
(2) Conforming amendments.--Subtitle B of the Federal
Housing Enterprises Financial Safety and Soundness Act of 1992
is amended by striking ``risk-based'' each place such term
appears in the following sections and inserting ``required'':
(A) Section 1364(a) (12 U.S.C. 4614(a)).
(B) Section 1366(a)(2)(B) (12 U.S.C.
4616(a)(2)(B)).
(C) Section 1369C(a) (12 U.S.C. 4622(a)).
(b) Increase in Minimum Capital Levels.--Section 1362(a) of the
Federal Housing Enterprises Financial Safety and Soundness Act of 1992
(12 U.S.C. 4612(a)) is amended--
(1) in paragraph (1), by inserting before the semicolon at
the end the following: ``; except that such percentage shall be
adjusted effective January 1 of each year beginning after the
effective date of the New Fair Deal Banking and Housing
Stability Act of 2013, by increasing such percentage (as it may
have been previously adjusted) by 0.7 percentage points'';
(2) in paragraph (2), by inserting before ``; and'' the
following: ``; except that such percentage shall be adjusted
effective January 1 of each year beginning after the effective
date of the New Fair Deal Banking and Housing Stability Act of
2013, by increasing such percentage (as it may have been
previously adjusted) by 0.15 percentage points''; and
(3) in paragraph (3), by inserting before the period at the
end the following: ``; and except that such percentage shall be
adjusted effective January 1 of each year beginning after the
effective date of the New Fair Deal Banking and Housing
Stability Act of 2013, by increasing such percentage (as it may
have been previously adjusted) by 0.15 percentage points''.
(c) Increase in Critical Capital Levels.--Section 1363(a) of the
Federal Housing Enterprises Financial Safety and Soundness Act of 1992
(12 U.S.C. 4613(a)) is amended--
(1) in paragraph (1), by inserting before the semicolon at
the end the following: ``; except that such percentage shall be
adjusted effective January 1 of each year beginning after the
effective date of the New Fair Deal Banking and Housing
Stability Act of 2013, by increasing such percentage (as it may
have been previously adjusted) by 0.7 percentage points'';
(2) in paragraph (2), by inserting before ``; and'' the
following: ``; except that such percentage shall be adjusted
effective January 1 of each year beginning after the effective
date of the New Fair Deal Banking and Housing Stability Act of
2013, by increasing such percentage (as it may have been
previously adjusted) by 0.15 percentage points''; and
(3) in paragraph (3), by inserting before the period at the
end the following: ``; and except that such percentage shall be
adjusted effective January 1 of each year beginning after the
effective date of the New Fair Deal Banking and Housing
Stability Act of 2013, by increasing such percentage (as it may
have been previously adjusted) by 0.15 percentage points''.
SEC. 114. ENTERPRISE PORTFOLIO LIMITATIONS.
The Housing and Community Development Act of 1992 (12 U.S.C. 4611
et seq.) is amended by striking section 1369E (12 U.S.C. 4624) and
inserting the following new section:
``SEC. 1369E. RESTRICTION ON MORTGAGE ASSETS OF ENTERPRISES.
``(a) Restriction.--No enterprise shall own, as of any applicable
date in this subsection or thereafter, mortgage assets in excess of--
``(1) as of December 31, 2013, $550,000,000,000; or
``(2) as of December 31 of each year thereafter, 80 percent
of the aggregate amount of mortgage assets that the enterprise
was permitted to own pursuant to this section as of December 31
of the immediately preceding calendar year.
``(b) Definition of Mortgage Assets.--For purposes of this section,
the term `mortgage assets' means, with respect to an enterprise, assets
of such enterprise consisting of mortgages, mortgage loans, mortgage-
related securities, participation certificates, mortgage-backed
commercial paper, obligations of real estate mortgage investment
conduits and similar assets, in each case to the extent such assets
would appear on the balance sheet of such enterprise in accordance with
generally accepted accounting principles in effect in the United States
as of September 7, 2008 (as set forth in the opinions and
pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board from time to
time; and without giving any effect to any change that may be made
after September 7, 2008, in respect of Statement of Financial
Accounting Standards No. 140 or any similar accounting standard).''.
PART 3--ABOLITION OF FANNIE MAE AND FREDDIE MAC
SEC. 121. ABOLISHMENT OF ENTERPRISES.
(a) Repeal of Charters.--
(1) Fannie mae.--Effective upon the expiration of the 5-
year period beginning on the date of the enactment of this Act,
the Federal National Mortgage Association Charter Act (12
U.S.C. 1716 et seq.) is repealed and the Federal National
Mortgage Association shall have no authority to conduct new
business under such charter, except that the provisions of such
charter in effect immediately before such repeal shall continue
to apply with respect to the rights and obligations of any
holders of--
(A) outstanding debt obligations of the Federal
National Mortgage Association, including any--
(i) bonds, debentures, notes, or other
similar instruments;
(ii) capital lease obligations; or
(iii) obligations in respect of letters of
credit, bankers' acceptances, or other similar
instruments; or
(B) mortgage-backed securities guaranteed by the
Federal National Mortgage Association.
(2) Freddie mac.--Effective upon the expiration of the 5-
year period beginning on the date of the enactment of this Act,
the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1451
et seq.) is repealed and the Federal Home Loan Mortgage
Corporation shall have no authority to conduct new business
under such charter, except that the provisions of such charter
in effect immediately before such repeal shall continue to
apply with respect to the rights and obligations of any holders
of--
(A) outstanding debt obligations of the Federal
Home Loan Mortgage Corporation, including any--
(i) bonds, debentures, notes, or other
similar instruments;
(ii) capital lease obligations; or
(iii) obligations in respect of letters of
credit, bankers' acceptances, or other similar
instruments; or
(B) mortgage-backed securities guaranteed by the
Federal Home Loan Mortgage Corporation.
(3) Existing guarantee obligations.--
(A) Explicit guarantee.--The full faith and credit
of the United States is pledged to the payment of all
amounts which may be required to be paid under any
obligation described under paragraphs (1) and (2).
(B) Applicability.--Except for amounts determined
necessary for use for winding up the affairs of the
enterprises pursuant to subsection (b), all guarantee
fee amounts derived from the mortgage guarantee
business of the enterprises in existence as of the
expiration of the 5-year period beginning on the date
of the enactment of this Act shall be deposited into
the Treasury of the United States, for purposes of
deficit reduction.
(b) Wind-Down of Enterprises.--
(1) Termination of current conservatorship.--Upon the
expiration of the 5-year period beginning on the date of the
enactment of this Act, the Director of the Federal Housing
Finance Agency shall, with respect to each enterprise, appoint
the Federal Housing Finance Agency as receiver under section
1367 of the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992 and carry out such receivership under the
authority of such section and in accordance with this Act and
any amendments made by this Act.
(2) Wind down.--During the 5-year period that begins upon
the date of the enactment of this Act, the Director of the
Federal Housing Finance Agency, in consultation with the
Secretary of the Treasury, shall take such action, and may
prescribe such regulations and procedures, as may be necessary
and consistent with the receiverships pursuant to paragraph (1)
to wind down the operations of the enterprises in an orderly
manner that complies with the requirements of this Act and any
amendments made by this Act.
(3) Division of assets and liabilities; authority to
establish holding corporation and dissolution trust fund.--The
action and procedures required under paragraph (2)--
(A) shall include the establishment and execution
of plans to provide for an equitable division,
distribution, and liquidation of the assets and
liabilities of each enterprise, including any
infrastructure, property, including intellectual
property, platforms, or any other thing or object of
value, provided that such plans shall--
(i) provide for the sale, at auction, of
the servicing rights to mortgages guaranteed by
an enterprise under terms that ensure that a
purchaser of such servicing rights shall assume
a first loss position in the event of a default
under such a mortgage in an amount equal to 20
percent of the aggregate amount of such loss
and the Federal Government shall be liable to
the purchaser for the remainder of such loss;
(ii) provide for the sale, at auction, of
any other assets of an enterprise having value;
and
(iii) comply with the requirements of this
Act and any amendments made by this Act;
(B) may provide for establishment of a holding
corporation organized under the laws of any State of
the United States or the District of Columbia for the
purpose of winding down an enterprise; and
(C) shall provide for establishment of one or more
trusts to which to transfer--
(i) outstanding debt obligations of an
enterprise; or
(ii) outstanding mortgages held for the
purpose of collateralizing mortgage-backed
securities guaranteed by an enterprise.
(c) Conforming Amendments to Federal Home Loan Bank Act.--Effective
upon the expiration of the 5-year period that begins on the date of the
enactment of this Act, the Federal Home Loan Bank Act is amended--
(1) in section 10(a)(3)(B) (12 U.S.C. 1430(a)(3)(B)), by
striking ``(including without limitation, mortgage-backed
securities issued or guaranteed by the Federal Home Loan
Mortgage Corporation, the Federal National Mortgage
Corporation, and the Government National Mortgage
Association)''; and
(2) in section 16(a) (12 U.S.C. 1436(a)), by striking ``,
in obligations, participations, or other instruments'' and all
that follows through ``section 306 of the Federal Home Loan
Mortgage Corporation Act,''.
Subtitle B--Termination of Insurance for Banks' Mortgage Lending
PART 1--IMMEDIATE REFORMS OF FHA CREDIT PROGRAMS
SEC. 131. FHA LENDER REPURCHASE REQUIREMENT.
Title II of the National Housing Act (12 U.S.C. 1707 et seq.) is
amended by adding at the end the following new section:
``SEC. 259. LENDER REPURCHASE REQUIREMENT.
``The Secretary may not newly insure any mortgage on a 1- to 4-
family residential property unless the mortgagee under such mortgage
enters into such binding agreements as the Secretary considers
necessary to ensure that, if the mortgagor is in default with respect
to the mortgagor's obligation to make payments under the mortgage for
30 or more consecutive days during the 6-month period beginning upon
origination of the mortgage, the mortgagee will, upon notice by the
Secretary, repurchase such mortgage in an amount equal to the remaining
principal obligation under the mortgage, as determined in accordance
with guidelines issued by the Secretary.''.
SEC. 132. PROHIBITION OF FHA MORTGAGE INSURANCE FOR CASH-OUT
REFINANCINGS.
Title II of the National Housing Act (12 U.S.C. 1707 et seq.), as
amended by the preceding provisions of this Act, is further amended by
adding at the end the following new section:
``SEC. 260. PROHIBITION OF CASH-OUT REFINANCINGS.
``The Secretary may not newly insure any mortgage on a 1- to 4-
family residential property under which--
``(1) a portion of the mortgage proceeds are used to prepay
or pay off the outstanding principal obligation under an
existing mortgage or loan secured by the same residential
property; and
``(2) any portion of the mortgage proceeds are used for any
purpose other than to prepay or pay off such existing mortgage
and for any settlement costs in connection with such mortgage,
as determined in accordance with guidelines issued by the
Secretary.''.
SEC. 133. FHA LIMITATION ON SELLER CONCESSIONS.
Title II of the National Housing Act (12 U.S.C. 1707 et seq.), as
amended by the preceding provisions of this Act, is further amended by
adding at the end the following new section:
``SEC. 261. LIMITATION ON SELLER CONCESSIONS.
``The Secretary may not newly insure any mortgage on a 1- to 4-
family residential property with respect to which the seller of the
property subject to such mortgage (or any third party or entity that is
reimbursed directly or indirectly by the seller) contributes toward the
acquisition of the property by the mortgagor any amount in excess of 3
percent of the total closing costs (as determined by the Secretary) in
connection with such acquisition.''.
PART 2--REDUCING TAXPAYER GUARANTEES OF MORTGAGES
SEC. 141. REDUCTION OF FHA MORTGAGE INSURANCE COVERAGE.
Title II of the National Housing Act (12 U.S.C. 1707 et seq.), as
amended by the preceding provisions of this Act, is further amended by
adding at the end the following new section:
``SEC. 262. REDUCTION OF MORTGAGE INSURANCE COVERAGE.
``Notwithstanding any other provision of this title, the Secretary
may not insure, or make any commitment to insure, any portion of any
mortgage on a 1- to 4-family residential property in excess of the
amount equal to the following percentage of the original principal
obligation of the mortgage:
``(1) In the case of any such mortgage insured after the
date of the enactment of the New Fair Deal Banking and Housing
Stability Act of 2013, 80 percent of such original principal
obligation, subject to paragraphs (2) through (5).
``(2) In the case of any such mortgage insured after the
expiration of the 1-year period beginning on the date of the
enactment of such Act, 70 percent of such original principal
obligation, subject to paragraphs (3) through (5).
``(3) In the case of any such mortgage insured after the
expiration of the 2-year period beginning on the date of the
enactment of such Act, 60 percent of such original principal
obligation, subject to paragraphs (4) through (5).
``(4) In the case of any such mortgage insured after the
expiration of the 3-year period beginning on the date of the
enactment of such Act, 50 percent of such original principal
obligation, subject to paragraph (5).
``(5) In the case of any such mortgage insured after the
expiration of the 4-year period beginning on the date of the
enactment of such Act, 40 percent of such original principal
obligation.''.
SEC. 142. INCREASE IN FHA DOWNPAYMENT REQUIREMENT.
Subparagraph (A) of section 203(b)(9) of the National Housing Act
(12 U.S.C. 1709(b)(9)(A)) is amended--
(1) by striking ``(A) In general.--A mortgage'' and
inserting the following:
``(A) In general.--
``(i) Payment requirement.--A mortgage'';
(2) by striking ``3.5 percent of the appraised value of the
property'' and inserting ``the percentage of the appraised
value of the property specified in clause (ii)''; and
(3) by adding at the end the following new clause:
``(ii) Percentage of appraised value of
property.--The percentage of the appraised
value of a property specified in this clause
is--
``(I) for a mortgage insured under
this section after the date of the
enactment of the New Fair Deal Banking
and Housing Stability Act of 2013, 5.0
percent, subject to subclauses (II)
through (V);
``(II) for a mortgage insured under
this section after the expiration of
the 1-year period beginning on the date
of the enactment of the New Fair Deal
Banking and Housing Stability Act of
2013, 6.5 percent, subject to
subclauses (III) through (V);
``(III) for a mortgage insured
under this section after the expiration
of the 2-year period beginning on the
date of the enactment of the New Fair
Deal Banking and Housing Stability Act
of 2013, 8.0 percent, subject to
subclauses (IV) and (V);
``(IV) for a mortgage insured under
this section after the expiration of
the 3-year period beginning on the date
of the enactment of the New Fair Deal
Banking and Housing Stability Act of
2013, 9.5 percent, subject to subclause
(V); and
``(V) for a mortgage insured under
this section after the expiration of
the 4-year period beginning on the date
of the enactment of the New Fair Deal
Banking and Housing Stability Act of
2013, 11.0 percent.''.
PART 3--TERMINATION OF FHA CREDIT GUARANTEES
SEC. 151. TERMINATION OF FHA INSURANCE AUTHORITY.
(a) Termination.--Effective upon the expiration of the 5-year
period beginning on the date of the enactment of this Act, the
Secretary of Housing and Urban Development may not insure, guarantee,
or make any mortgage or other loan pursuant to any of the following
provisions of law:
(1) National housing act.--Titles I, II, V, VI, VII, VIII,
IX, and XI of the National Housing Act (12 U.S.C. 1702 et seq.,
1707 et seq., 1731a et seq., 1736 et seq., 1747 et seq., 1748
et seq., 1750 et seq., 1749aaa et seq.).
(2) Energy efficient mortgages program.--Section 106 of the
Energy Policy Act of 1992 (12 U.S.C. 1701z-16) or section 513
of the Housing and Community Development Act of 1992 (Public
Law 102-550; 106 Stat. 3786).
(3) Flexible subsidy program.--Section 201 of the Housing
and Community Development Amendments of 1978 (12 U.S.C. 1715z-
1a).
(4) Loan guarantees for indian housing.--Section 184 of the
Housing and Community Development Act of 1992 (12 U.S.C. 1715z-
13a).
(5) Loan guarantees for native hawaiian housing.--Section
184A of the Housing and Community Development Act of 1992 (12
U.S.C. 1715z-13b).
(6) Multifamily mortgage credit program.--Section 542 of
the Housing and Community Development Act of 1992 (12 U.S.C.
1715z-22).
(b) Repeals.--Effective upon the expiration of the period referred
to in subsection (a), the provisions of law specified in such
subsection are repealed.
(c) Transfer of FHA Functions to Secretary of the Treasury.--
Effective upon the expiration of the period referred to in subsection
(a), all FHA functions are transferred to the Secretary of the
Treasury, but only to the extent necessary to fulfill outstanding
obligations of the Department of Housing and Urban Development under
such provisions and windup the business of the Department of Housing
and Urban Development under such provisions.
(d) Resolution and Termination of FHA Functions.--
(1) Resolution of functions.--The Secretary of the Treasury
shall--
(A) complete the disposition and resolution of FHA
functions in accordance with this section; and
(B) resolve all FHA functions that are transferred
to the Secretary under subsection (c).
(2) Termination of functions.--All FHA functions that are
transferred to the Secretary under subsection (c) shall
terminate on the date all obligations of the FHA, and all
obligations of others to the FHA, in effect immediately before
the expiration of the period referred to in subsection (a) have
been satisfied, as determined by the Secretary of the Treasury.
(3) Report to congress.--Upon making the determination
described in paragraph (2), the Secretary of the Treasury shall
report the determination to the Committee on Financial Services
of the House of Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate.
(e) Duties of Secretary of the Treasury.--
(1) In general.--The Secretary of the Treasury shall be
responsible for the implementation of this section, including--
(A) the administration and wind-up of all FHA
functions transferred to the Secretary under subsection
(c);
(B) the administration and wind-up of any
outstanding obligations of the Federal Government under
any programs terminated by this section; and
(C) taking such other actions as may be necessary
to wind-up any outstanding affairs of the FHA.
(f) Personnel.--Effective upon the expiration of the period
referred to in subsection (a), there are transferred to the Department
of the Treasury all individuals, who--
(1) immediately before such expiration, were officers or
employees of the Department of Housing and Urban Development;
and
(2) in their capacity as such an officer or employee,
performed functions that are transferred to the Secretary under
subsection (c).
(g) Exercise of Authorities.--Except as otherwise provided by law,
a Federal official to whom a function is transferred by this section,
for purposes of performing the function and subject to subsection (c),
exercise all authorities under any other provision of law that were
available with respect to the performance of that function to the
official responsible for the performance of the function immediately
before the effective date of the transfer of the function under this
section.
(h) Transfer of Assets.--Except as otherwise provided in this
section so much of the personnel, property, records, and unexpended
balances of appropriations, allocations, and other funds employed,
used, held, available, or to be made available in connection with a
function transferred to an official or agency by this section shall be
available to the official or the head of that agency, respectively, at
such time or times as the Director of the Office of Management and
Budget directs for use in connection with the functions transferred.
(i) Delegation and Assignment.--Except as otherwise expressly
prohibited by law, an official to whom functions are transferred under
this section (including the head of any office to which functions are
transferred under this section) may delegate any of the functions so
transferred to such officers and employees of the office of the
official as the official may designate, and may authorize successive
redelegations of such functions as may be necessary or appropriate. No
delegation of functions under this subsection or under any other
provision of this section shall relieve the official to whom a function
is transferred under this section of responsibility for the
administration of the function.
(j) Authority of Secretary of the Treasury With Respect to
Functions Transferred.--
(1) Determinations.--If necessary, the Secretary of the
Treasury shall make any determination of the functions that are
transferred under this section.
(2) Incidental transfers.--The Secretary of the Treasury,
at such time or times as the Secretary shall provide, may make
such determinations as may be necessary with regard to the
functions transferred by this section, and to make such
additional incidental dispositions of personnel, assets,
liabilities, grants, contracts, property, records, and
unexpended balances of appropriations, authorizations,
allocations, and other funds held, used, arising from,
available to, or to be made available in connection with such
functions, as may be necessary to carry out the provisions of
this section.
(k) Savings Provisions.--
(1) Authority regarding outstanding commitments.--
Notwithstanding the repeals under subsection (b), the Secretary
may insure, guarantee, or make any mortgage for which a
commitment to insure, guarantee, or make was made before the
effective date of such repeals under the provision of law
repealed. Any such mortgage shall be subject to the terms of
the provisions of law repealed as in effect immediately before
such repeal.
(2) Effect on outstanding mortgage insurance.--Any mortgage
insurance, funds, or activities subject, before repeal, to a
provision of law repealed by subsection (b) shall continue to
be governed by the provision as in effect immediately before
repeal.
(3) Existing rights, duties, and obligations not
affected.--Subsections (a) and (b) shall not affect the
validity of any right, duty, or obligation of the United
States, the Secretary of Housing and Urban Development, or any
other person, which--
(A) arises under any provision of law repealed by
subsection (b); and
(B) existed immediately before the effective date
of such repeals.
(4) Legal documents.--All orders, determinations, rules,
regulations, permits, grants, loans, contracts, agreements,
certificates, licenses, and privileges--
(A) that have been issued, made, granted, or
allowed to become effective by the Secretary of Housing
and Urban Development, any officer or employee of any
office transferred by this section, or any other
Government official, or by a court of competent
jurisdiction, in the performance of any function that
is transferred by this section, and
(B) that are in effect upon the expiration of the
period referred to in subsection (a) (or become
effective after such date pursuant to their terms as in
effect upon such expiration), shall continue in effect
according to their terms until modified, terminated,
superseded, set aside, or revoked in accordance with
law by the President, any other authorized official, a
court of competent jurisdiction, or operation of law.
(5) Proceedings.--This section shall not affect any
proceedings or any application for any benefits, service,
license, permit, certificate, or financial assistance pending
upon the expiration of the period referred to in subsection (a)
before an office transferred by this section, but such
proceedings and applications shall be continued. Orders shall
be issued in such proceedings, appeals shall be taken
therefrom, and payments shall be made pursuant to such orders,
as if this section had not been enacted, and orders issued in
any such proceeding shall continue in effect until modified,
terminated, superseded, or revoked by a duly authorized
official, by a court of competent jurisdiction, or by operation
of law. Nothing in this paragraph shall be considered to
prohibit the discontinuance or modification of any such
proceeding under the same terms and conditions and to the same
extent that such proceeding could have been discontinued or
modified if this section had not been enacted.
(6) Nonabatement of actions.--No action or other proceeding
commenced by or against the Secretary of Housing and Urban
Development in connection with functions transferred to the
Secretary of the Treasury under subsection (c) shall abate by
reason of the enactment of this section, except that the
Secretary of the Treasury shall be substituted for the
Secretary of Housing and Urban Development as a party to any
such action or proceeding.
(7) Suits.--This section shall not affect suits commenced
before the expiration of the period referred to in subsection
(a), and in all such suits, proceeding shall be had, appeals
taken, and judgments rendered in the same manner and with the
same effect as if this section had not been enacted. If any
Government officer in the official capacity of such officer is
party to a suit with respect to a function of the officer, and
under this section such function is transferred to any other
officer or office, then such suit shall be continued with the
other officer or the head of such other office, as applicable,
substituted or added as a party.
(8) Administrative procedure and judicial review.--Except
as otherwise provided by this section, any statutory
requirements relating to notice, hearings, action upon the
record, or administrative or judicial review that apply to any
function transferred by this section shall apply to the
exercise of such function by the head of the Federal agency,
and other officers of the agency, to which such function is
transferred by this section.
(l) Availability of Existing Funds.--Existing appropriations and
funds available for the performance of functions, programs, and
activities terminated pursuant to this section shall remain available,
for the duration of their period of availability, for necessary
expenses in connection with the termination and resolution of such
functions, programs, and activities. Upon the expiration of all
contracts and agreements with respect to such functions, programs, and
activities, any unexpended balances of the funds referred to in this
subsection shall be deposited in the Treasury as miscellaneous
receipts.
(m) References.--Any reference in any other Federal law, Executive
order, rule, regulation, or delegation of authority, or any document of
or pertaining to a department or office from which a function is
transferred by this section--
(1) to the head of such department or office is deemed to
refer to the head of the department or office to which the
function is transferred; or
(2) to such department or office is deemed to refer to the
department or office to which the function is transferred.
(n) Definitions.--For purposes of this section, the following
definitions shall apply:
(1) FHA.--The term ``FHA'' means the Secretary of Housing
and Urban Development, but only to the extent of the
operations, authority, and functions of the Secretary pursuant
to the provisions of law repealed by subsection (b).
(2) FHA functions.--The term ``FHA functions'' means
functions under the provisions of law repealed by subsection
(b) that, immediately before the effective date of such
repeals, are authorized to be performed by the Secretary of
Housing and Urban Development or any officer or employee of the
Department of Housing and Urban Development, or any office of
the Department of Housing and Urban Development.
(3) Function.--The term ``function'' includes any duty,
obligation, power, authority, responsibility, right, privilege,
activity, or program.
(4) Office.--The term ``office'' includes any office,
administration, agency, bureau, institute, council, unit,
organizational entity, or component thereof.
Subtitle C--Ending Guarantees for Government Mortgage-Backed Securities
SEC. 161. LIMITATION ON GNMA GUARANTEES.
Subsection (g) of section 306 of the Federal National Mortgage
Association Charter Act (12 U.S.C. 1721(g)) is amended by adding at the
end the following new paragraph:
``(4) The Association may not enter into commitments to issue
guarantees under this subsection in an aggregate amount--
``(A) in any month commencing after the date of the
enactment of the New Fair Deal Banking and Housing Stability
Act of 2013, that exceeds $38,000,000,000, subject to
subparagraphs (B) through (F);
``(B) in any month commencing after the expiration of the
1-year period beginning on the date of the enactment of the New
Fair Deal Banking and Housing Stability Act of 2013, that
exceeds $32,000,000,000, subject to subparagraphs (C) through
(F);
``(C) in any month commencing after the expiration of the
2-year period beginning on the date of the enactment of the New
Fair Deal Banking and Housing Stability Act of 2013, that
exceeds $24,000,000,000, subject to subparagraphs (D) through
(F);
``(D) in any month commencing after the expiration of the
3-year period beginning on the date of the enactment of the New
Fair Deal Banking and Housing Stability Act of 2013, that
exceeds $16,000,000,000, subject to subparagraphs (E) and (F);
``(E) in any month commencing after the expiration of the
4-year period beginning on the date of the enactment of the New
Fair Deal Banking and Housing Stability Act of 2013, that
exceeds $8,000,000,000, subject to subparagraph (F); and
``(F) in any month commencing after the expiration of the
5-year period beginning on the date of the enactment of the New
Fair Deal Banking and Housing Stability Act of 2013, that
exceeds $0.''.
SEC. 162. ABOLISHMENT OF GINNIE MAE.
(a) Abolishment and Transfer.--Effective upon the expiration of the
5-year period beginning on the date of the enactment of this Act--
(1) the Government National Mortgage Association is
abolished; and
(2) all functions that, immediately before the expiration
of such period are authorized to be performed by the
Association, any officer or employee of the Association acting
in that capacity, or any office of the Association, are
transferred to the Secretary of the Treasury.
(b) Repeals.--
(1) Charter.--For provisions repealing the organic
authority of the Government National Mortgage Association, see
section 121(a)(1) of this Act.
(2) Administrative expenses provision.--Effective upon the
expiration of the period referred to in subsection (a),
subsection (b) of section 306 of the Housing Act of 1959 (12
U.S.C. 1721 note) is hereby repealed.
(c) Resolution and Termination of FHA Functions.--
(1) Resolution of functions.--The Secretary of the Treasury
shall--
(A) complete the disposition and resolution of FHA
functions in accordance with this section; and
(B) resolve all FHA functions that are transferred
to the Secretary under subsection (a)(2).
(2) Termination of functions.--All FHA functions that are
transferred to the Secretary under subsection (a)(2) shall
terminate on the date all obligations of the FHA, and all
obligations of others to the FHA, in effect immediately before
the expiration of the period referred to in subsection (a) have
been satisfied, as determined by the Secretary of the Treasury.
(3) Report to congress.--Upon making the determination
described in paragraph (2), the Secretary of the Treasury shall
report the determination to the Committee on Financial Services
of the House of Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate.
(d) Duties of Secretary of the Treasury.--
(1) In general.--The Secretary of the Treasury shall be
responsible for the implementation of this section, including--
(A) the administration and wind-up of all FHA
functions transferred to the Secretary under subsection
(c);
(B) the administration and wind-up of any
outstanding obligations of the Federal Government under
any programs terminated by this section; and
(C) taking such other actions as may be necessary
to wind-up any outstanding affairs of the FHA.
(e) Personnel.--Effective upon the expiration of the period
referred to in subsection (a), there are transferred to the Department
of the Treasury all individuals, who--
(1) immediately before such expiration, were officers or
employees of the Department of Housing and Urban Development;
and
(2) in their capacity as such an officer or employee,
performed functions that are transferred to the Secretary under
subsection (c).
(f) Exercise of Authorities.--Except as otherwise provided by law,
a Federal official to whom a function is transferred by this section,
for purposes of performing the function, exercise all authorities under
any other provision of law that were available with respect to the
performance of that function to the official responsible for the
performance of the function immediately before the effective date of
the transfer of the function under this section.
(g) Transfer of Assets.--Except as otherwise provided in this
section so much of the personnel, property, records, and unexpended
balances of appropriations, allocations, and other funds employed,
used, held, available, or to be made available in connection with a
function transferred to an official or agency by this section shall be
available to the official or the head of that agency, respectively, at
such time or times as the Director of the Office of Management and
Budget directs for use in connection with the functions transferred.
(h) Delegation and Assignment.--Except as otherwise expressly
prohibited by law, an official to whom functions are transferred under
this section (including the head of any office to which functions are
transferred under this section) may delegate any of the functions so
transferred to such officers and employees of the office of the
official as the official may designate, and may authorize successive
redelegations of such functions as may be necessary or appropriate. No
delegation of functions under this subsection or under any other
provision of this section shall relieve the official to whom a function
is transferred under this section of responsibility for the
administration of the function.
(i) Authority of Secretary of the Treasury With Respect to
Functions Transferred.--
(1) Determinations.--If necessary, the Secretary of the
Treasury shall make any determination of the functions that are
transferred under this section.
(2) Incidental transfers.--The Secretary of the Treasury,
at such time or times as the Secretary shall provide, may make
such determinations as may be necessary with regard to the
functions transferred by this section, and to make such
additional incidental dispositions of personnel, assets,
liabilities, grants, contracts, property, records, and
unexpended balances of appropriations, authorizations,
allocations, and other funds held, used, arising from,
available to, or to be made available in connection with such
functions, as may be necessary to carry out the provisions of
this section.
(j) Savings Provisions.--
(1) Authority regarding outstanding commitments.--
Notwithstanding the repeals under subsection (b), the Secretary
may insure any mortgage for which a commitment to insure was
made before the effective date of such repeals under the
provision of law repealed. Any such mortgage shall be subject
to the terms of the provisions of law repealed as in effect
immediately before such repeal.
(2) Effect on outstanding mortgage insurance.--Any mortgage
insurance, funds, or activities subject, before repeal, to a
provision of law repealed by subsection (b) shall continue to
be governed by the provision as in effect immediately before
repeal.
(3) Existing rights, duties, and obligations not
affected.--Subsections (a) and (b) shall not affect the
validity of any right, duty, or obligation of the United
States, the Secretary of Housing and Urban Development, or any
other person, which--
(A) arises under any provision of law repealed by
subsection (b); and
(B) existed immediately before the effective date
of such repeals.
(4) Legal documents.--All orders, determinations, rules,
regulations, permits, grants, loans, contracts, agreements,
certificates, licenses, and privileges--
(A) that have been issued, made, granted, or
allowed to become effective by the Secretary of Housing
and Urban Development, any officer or employee of any
office transferred by this section, or any other
Government official, or by a court of competent
jurisdiction, in the performance of any function that
is transferred by this section, and
(B) that are in effect upon the expiration of the
period referred to in subsection (a) (or become
effective after such date pursuant to their terms as in
effect upon such expiration), shall continue in effect
according to their terms until modified, terminated,
superseded, set aside, or revoked in accordance with
law by the President, any other authorized official, a
court of competent jurisdiction, or operation of law.
(5) Proceedings.--This section shall not affect any
proceedings or any application for any benefits, service,
license, permit, certificate, or financial assistance pending
upon the expiration of the period referred to in subsection (a)
before an office transferred by this section, but such
proceedings and applications shall be continued. Orders shall
be issued in such proceedings, appeals shall be taken
therefrom, and payments shall be made pursuant to such orders,
as if this section had not been enacted, and orders issued in
any such proceeding shall continue in effect until modified,
terminated, superseded, or revoked by a duly authorized
official, by a court of competent jurisdiction, or by operation
of law. Nothing in this paragraph shall be considered to
prohibit the discontinuance or modification of any such
proceeding under the same terms and conditions and to the same
extent that such proceeding could have been discontinued or
modified if this section had not been enacted.
(6) Nonabatement of actions.--No action or other proceeding
commenced by or against the Secretary of Housing and Urban
Development in connection with functions transferred to the
Secretary of the Treasury under subsection (c) shall abate by
reason of the enactment of this section, except that the
Secretary of the Treasury shall be substituted for the
Secretary of Housing and Urban Development as a party to any
such action or proceeding.
(7) Suits.--This section shall not affect suits commenced
before the expiration of the period referred to in subsection
(a), and in all such suits, proceeding shall be had, appeals
taken, and judgments rendered in the same manner and with the
same effect as if this section had not been enacted. If any
Government officer in the official capacity of such officer is
party to a suit with respect to a function of the officer, and
under this section such function is transferred to any other
officer or office, then such suit shall be continued with the
other officer or the head of such other office, as applicable,
substituted or added as a party.
(8) Administrative procedure and judicial review.--Except
as otherwise provided by this section, any statutory
requirements relating to notice, hearings, action upon the
record, or administrative or judicial review that apply to any
function transferred by this section shall apply to the
exercise of such function by the head of the Federal agency,
and other officers of the agency, to which such function is
transferred by this section.
(k) Availability of Existing Funds.--Existing appropriations and
funds available for the performance of functions, programs, and
activities terminated pursuant to this section shall remain available,
for the duration of their period of availability, for necessary
expenses in connection with the termination and resolution of such
functions, programs, and activities. Upon the expiration of all
contracts and agreements with respect to such functions, programs, and
activities, any unexpended balances of the funds referred to in this
subsection shall be deposited in the Treasury as miscellaneous
receipts.
(l) References.--Any reference in any other Federal law, Executive
order, rule, regulation, or delegation of authority, or any document of
or pertaining to a department or office from which a function is
transferred by this section--
(1) to the head of such department or office is deemed to
refer to the head of the department or office to which the
function is transferred; or
(2) to such department or office is deemed to refer to the
department or office to which the function is transferred.
(m) Definitions.--For purposes of this section, the following
definitions shall apply:
(1) Association.--The term ``Association'' means the
Government National Mortgage Association.
(2) Function.--The term ``function'' includes any duty,
obligation, power, authority, responsibility, right, privilege,
activity, or program.
(3) Office.--The term ``office'' includes any office,
administration, agency, bureau, institute, council, unit,
organizational entity, or component thereof.
(4) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury.
Subtitle D--Repealing Regulations That Promote Risky Lending
SEC. 171. REPEAL OF THE COMMUNITY REINVESTMENT ACT OF 1977.
The Community Reinvestment Act of 1977 (12 U.S.C. 2901 et seq.) is
hereby repealed.
SEC. 172. REPEAL OF DODD-FRANK CREDIT RISK RETENTION PROVISIONS.
(a) Credit Risk Retention.--Section 15G of the Securities Exchange
Act of 1934 (15 U.S.C. 78o-11) is hereby repealed.
(b) Study.--Subsection (c) of section 941 of the Dodd-Frank Wall
Street Reform and Consumer Protection Act is hereby repealed.
SEC. 173. REPEAL OF DODD-FRANK ABILITY TO REPAY AND QUALIFIED MORTGAGE
PROVISIONS.
Section 129C of the Truth in Lending Act (15 U.S.C. 1639c) is
amended--
(1) by striking subsections (a) and (b); and
(2) by redesignating subsections (c) through (i) as
subsections (a) through (g), respectively.
SEC. 174. REPEAL OF THE HOME MORTGAGE DISCLOSURE ACT OF 1975.
The Home Mortgage Disclosure Act of 1975 (12 U.S.C. 2801 et seq.)
is hereby repealed.
SEC. 175. REPEAL OF FEDERAL HOME LOAN BANKS AFFORDABLE HOUSING PROGRAM
AND HOUSING GOALS.
(a) Affordable Housing Program.--The Federal Home Loan Bank Act (12
U.S.C. 1421 et seq.) is amended--
(1) in section 10 (12 U.S.C. 1430), by striking subsections
(g), (h), (i), (j), and (k); and
(2) by repealing section 10b (12 U.S.C. 1430b).
(b) Housing Goals.--Section 10C of the Federal Home Loan Bank Act
(12 U.S.C. 1430C) is hereby repealed.
SEC. 176. REPEAL OF FDIC AFFORDABLE HOUSING PROGRAM.
Section 40 of the Federal Deposit Insurance Act (12 U.S.C. 1831q)
is hereby repealed.
Subtitle E--Stopping Subsidies for Certain Obstacles to Housing
Construction
SEC. 181. REPEAL OF TRANSPORTATION PLANNING PROVISIONS; RESCISSION.
(a) Repeals.--
(1) Federal-aid highways.--Sections 134 and 135 of title
23, United States Code, and the items relating to such sections
in the analysis for chapter 1 of that title, are repealed.
(2) Research, technology, and education.--Section 505 of
title 23, United States Code, and the item relating to that
section in the analysis for chapter 5 of that title, are
repealed.
(3) Public transportation.--Sections 5303, 5304, and 5305
of title 49, United States Code, and the items relating to such
sections in the analysis for chapter 53 of that title, are
repealed.
(b) Rescissions.--Effective on the date of the enactment of this
Act, the unobligated balances available on such date of enactment of
funds made available to carry out each of the sections repealed by this
section are hereby rescinded.
SEC. 182. TERMINATION OF HUD SUSTAINABLE COMMUNITIES INITIATIVES;
RESCISSION.
(a) Termination.--The following programs, activities, and
initiatives of the Department of Housing and Urban Development are
hereby terminated:
(1) Sustainable communities initiative.--The Sustainable
Communities Initiative originally established under the heading
``Community Planning and Development--Community Development
Fund'' of title II of division A of the Consolidated
Appropriations Act, 2010 (Public Law 111-117; 123 Stat. 3084).
(2) Sustainable communities regional planning grants.--The
Regional Integrated Planning Grants program originally
established under such heading.
(3) Community challenge planning grants.--The Community
Challenge Planning Grants program originally established under
such heading.
(4) Capacity building for sustainable communities.--The
program for capacity building for sustainable communities
originally established under such heading.
(b) Rescissions.--Effective on the date of the enactment of this
Act, the unobligated balances available on such date of enactment of
funds made available to carry out each of the programs and initiatives
terminated by subsection (a) are hereby rescinded.
TITLE II--ENDING BANK BAILOUTS AND RESTORING MARKET DISCIPLINE
Subtitle A--Reducing Risks to Bank Depositors and Other Creditors
SEC. 201. CAPITAL REQUIREMENTS.
(a) In General.--Notwithstanding any other provision of law, the
appropriate Federal regulators shall set capital standards for
financial companies as provided in this section.
(b) Minimum Capital Requirement.--Each financial company shall be
required to maintain sufficient capital to remain adequately
capitalized, as defined under subsection (c)(2).
(c) Capital Categories.--
(1) Well capitalized.--A financial company is ``well
capitalized'' if the company maintains a capital level of 12
percent or more.
(2) Adequately capitalized.--A financial company is
``adequately capitalized'' if the company maintains a capital
level of 10 percent or more.
(3) Undercapitalized.--A financial company is
``undercapitalized'' if the company maintains a capital level
of less than 10 percent.
(4) Significantly undercapitalized.--A financial company is
``significantly undercapitalized'' if the company maintains a
capital level of less than 6 percent.
(5) Critically undercapitalized.--A financial company is
``critically undercapitalized'' if the company maintains a
capital level of 2 percent or less.
(d) Capital Calculation.--In computing a financial company's
capital for purposes of this section--
(1) the value of capital shall be calculated based on the
current market value of the capital, and not by reference to
the book value of such capital;
(2) the percentage of capital maintained by a company shall
be based on the total consolidated assets of the company; and
(3) there shall be no risk-weighting of assets.
(e) Phase-In Period.--Notwithstanding subsection (c), during the 6-
year period beginning on the date of the enactment of this Act, the
percentages contained in paragraphs (1) through (5) of subsection (c)
shall be treated as follows:
(1) During the 1-year period following the date of the
enactment of this Act, 6 percent, 4 percent, 4 percent, 3
percent, and 2 percent, respectively.
(2) During the 1-year period following the period described
under paragraph (1), 7 percent, 5 percent, 5 percent, 3.5
percent, and 2 percent, respectively.
(3) During the 1-year period following the period described
under paragraph (2), 8 percent, 6 percent, 6 percent, 4
percent, and 2 percent, respectively.
(4) During the 1-year period following the period described
under paragraph (3), 9 percent, 7 percent, 7 percent, 4.5
percent, and 2 percent, respectively.
(5) During the 1-year period following the period described
under paragraph (4), 10 percent, 8 percent, 8 percent, 5
percent, and 2 percent, respectively.
(6) During the 1-year period following the period described
under paragraph (5), 11 percent, 9 percent, 9 percent, 5.5
percent, and 2 percent, respectively.
(f) Definitions.--For purposes of this section:
(1) Appropriate federal regulator.--The term ``appropriate
Federal regulator''--
(A) has the meaning given the term ``appropriate
Federal banking agency'' under section 3 of the Federal
Deposit Insurance Act (12 U.S.C. 1813);
(B) means the Board of Governors of the Federal
Reserve System, in the case of a nonbank financial
company supervised by the Board of Governors; and
(C) means the National Credit Union Administration
Board, in the case of a credit union.
(2) Capital.--The term ``capital'' means common equity tier
1 capital and additional tier 1 capital, as such terms are
defined in the notice of final rulemaking published in the
Federal Register on October 11, 2013 (78 Fed. Reg. 62173-74).
(3) Credit union.--The term ``credit union'' includes a
Federal credit union and a State credit union, as such terms
are defined under section 101 of the Federal Credit Union Act
(12 U.S.C. 1752).
(4) Depository institution.--The term ``depository
institution'' has the meaning given such term under section 3
of the Federal Deposit Insurance Act (12 U.S.C. 1813).
(5) Depository institution holding company.--The term
``depository institution holding company'' has the meaning
given such term under section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813).
(6) Financial company.--The term ``financial company''
means--
(A) a credit union;
(B) a depository institution;
(C) a depository institution holding company; and
(D) a nonbank financial company supervised by the
Board of Governors.
(7) Nonbank financial company supervised by the board of
governors.--The term ``nonbank financial company supervised by
the Board of Governors'' has the meaning given such term under
section 102 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act (12 U.S.C. 5311).
SEC. 202. FDIC INSURANCE.
(a) Reduction in Maximum Insurance Amount.--Section 11(a)(1) of the
Federal Deposit Insurance Act (12 U.S.C. 1821(a)(1)) is amended--
(1) by amending subparagraph (E) to read as follows:
``(E) Standard maximum deposit insurance amount
defined.--For purposes of this Act, the term `standard
maximum deposit insurance amount' means $150,000,
adjusted as provided under subparagraph (F).''; and
(2) in subparagraph (F), by striking ``April 1 of 2010,''
and inserting ``April 1, 2015,''.
(b) Effective Date.--The amendments made by this section shall take
effect on the day that is the end of the 1-year period beginning on the
date of the enactment of this Act.
Subtitle B--Repeal of Bailout Authorities
SEC. 211. REPEAL OF FDIC POWERS UNDER THE SYSTEMIC RISK DETERMINATION.
The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is
amended--
(1) in section 11(a)(4)(C) (12 U.S.C. 1821(a)(4)(C)), by
striking ``other than section 13(c)(4)(G)''; and
(2) in section 13(c)(4) (12 U.S.C. 1823(c)(4))--
(A) by striking subparagraph (G); and
(B) by redesignating subparagraph (H) as
subparagraph (G).
SEC. 212. REPEAL OF UNUSUAL AND EXIGENT AUTHORITY OF THE FEDERAL
RESERVE.
Section 13(3) of the Federal Reserve Act (12 U.S.C. 343(3)) is
repealed.
SEC. 213. EXCHANGE STABILIZATION FUND.
(a) In General.--Section 5302 of title 31, United States Code, is
amended by striking ``stabilization fund'' each place such term appears
and inserting ``Special Drawing Rights Fund''.
(b) Conforming Amendments.--
(1) Balanced budget and emergency deficit control act of
1985.--Section 255(g)(1)(A) of the Balanced Budget and
Emergency Deficit Control Act of 1985 (2 U.S.C. 905(g)(1)(A))
is amended by striking ``Exchange Stabilization Fund'' and
inserting ``Special Drawing Rights Fund''.
(2) Emergency economic stabilization act of 2008.--The
Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5211 et
seq.) is amended--
(A) in section 131 (12 U.S.C. 5236), by striking
``Exchange Stabilization Fund'' each place such term
appears in headings and text and inserting ``Special
Drawing Rights Fund''; and
(B) in the item relating to section 131 in the
table of contents of such Act, by striking ``Exchange
Stabilization Fund'' and inserting ``Special Drawing
Rights Fund''.
(3) International financial institutions act.--Section 1704
of the International Financial Institutions Act (22 U.S.C.
262r-3) is amended by striking ``stabilization fund'' each
place such term appears and inserting ``Special Drawing Rights
Fund''.
(4) Special drawing rights act.--The Special Drawing Rights
Act (22 U.S.C. 286n et seq.) is amended by striking ``Exchange
Stabilization Fund'' each place such term appears and inserting
``Special Drawing Rights Fund''.
(c) References.--Any reference in a law, regulation, document,
paper, or other record of the United States to the ``Exchange
Stabilization Fund'' shall be deemed a reference to the ``Special
Drawing Rights Fund''.
(d) Funds Used To Reduce the Debt.--The Secretary of the Treasury
shall liquidate all property in the Special Drawing Rights Fund (as so
renamed under subsection (a)), other than Special Drawing Rights, and
use all such amounts to reduce the public debt.
(e) Limitation on Fund.--Section 5302 of title 31, United States
Code, is amended--
(1) in subsection (a)(1)--
(A) by striking ``is available to carry out'' and
inserting ``is only available to carry out''; and
(B) by striking ``, and for investing in
obligations of the United States Government those
amounts in the fund the Secretary of the Treasury, with
the approval of the President, decides are not required
at the time to carry out this section. Proceeds of
sales and investments, earnings, and interest shall be
paid into the fund and are available to carry out this
section. However, the fund is not available to pay
administrative expenses''; and
(2) by striking subsection (b) and inserting the following:
``(b) Fund Only To Hold Special Drawing Rights.--Notwithstanding
any other provision of law, only Special Drawing Rights may be
deposited into the Special Drawing Rights Fund.''.
(f) Conforming Amendments.--
(1) Bretton woods agreements act.--Section 18 of the
Bretton Woods Agreements Act (22 U.S.C. 286e-3) is hereby
repealed.
(2) Support for east european democracy (seed) act of
1989.--The Support for East European Democracy (SEED) Act of
1989 (22 U.S.C. 5401 et seq.) is amended--
(A) in section 101(b)(1) (22 U.S.C. 5411(b)(1)), by
striking ``such as--'' and all that follows through the
end of the paragraph and inserting ``such as the
authority provided in section 102(c) of this Act.'';
and
(B) in section 102(a) (22 U.S.C. 5412(a)), by
striking ``section 101(b)--'' and all that follows
through the end of the subsection and inserting
``section 101(b), should work closely with the European
Community and international financial institutions to
determine the extent of emergency assistance required
by Poland for the fourth quarter of 1989.''.
(g) Treatment of Certain Funds.--Funds that would otherwise have
been deposited into the Special Drawing Rights Fund (as so renamed
under subsection (a)), but for the amendments made by this section,
shall instead be paid to the Secretary of the Treasury, and the
Secretary of the Treasury shall use such funds to reduce the public
debt.
(h) Wind-Down Period for Certain Transactions.--Notwithstanding any
other provision of this section, during the 3-year period beginning on
the date of the enactment of this Act, property other than Special
Drawing Rights may be deposited, and maintained, in the Special Drawing
Rights Fund as needed to fulfill any outstanding obligations on the
Fund.
Subtitle C--Bankruptcy, Not Bailouts, for Complex Financial
Institutions
SEC. 221. REFORMING THE BANKRUPTCY CODE TO ACCOMMODATE FAILING
FINANCIAL INSTITUTIONS.
(a) Findings.--The Congress finds the following:
(1) Bailouts undermine market discipline and the rule of
law, resulting in doubt about property rights and insulating
recipients from the consequences of their mistakes.
(2) A number of complex financial institutions are widely
considered to be ``too big to fail''.
(3) An aggravating factor in the 2008 financial crisis was
uncertainty about the security and priority of claims stemming
from cross-border resolution of complex financial institutions.
(4) The Federal Deposit Insurance Corporation (FDIC) has
historically resolved most failing U.S. depository institutions
and has the necessary expertise and discretionary authority to
conduct such resolutions quickly.
(5) The FDIC's authority did not extend to all components
of very large, complex financial institutions, such as
insurance, stockbroker, and commodity broker operations.
(6) The U.S. Constitution authorizes Congress to establish
``uniform laws on the subject of Bankruptcies through the
United States''.
(7) Bankruptcy provides predictable priority for claims
under the rule of law through the jurisdiction of an Article
III court.
(8) The lengthy adjudication of claims to ensure equality
under the law of similarly situated creditors under bankruptcy
can be problematic in the case of financial institutions but
can be amended to preserve and protect value.
(9) The Dodd-Frank Wall Street Reform and Consumer
Protection Act did not establish a non-discretionary, rule-of-
law-based resolution process to provide certainty for creditors
of failing institutions.
(10) A credible resolution process could eliminate the use
of bailouts and other political interventions.
(11) Additional reforms are necessary to bring certainty
and predictability to the failure of large, complex,
multinational financial institutions.
(b) Sense of Congress.--It is the sense of Congress that the
Committees on the Judiciary and Financial Services of the House of
Representatives and the Committees on the Judiciary and Banking,
Housing, and Urban Affairs of the Senate should each report legislation
proposing changes to existing law within each committee's jurisdiction
with provisions to accommodate bankruptcy proceedings for failing
multinational financial institutions. Such committees should consider
reforms that--
(1) establish a new chapter of the bankruptcy code
specifically for financial institutions, to be used in
conjunction with the existing chapter 7 liquidation or chapter
11 reorganization process;
(2) replace or supplement existing resolution authorities
for certain kinds of institutions;
(3) clarify that such resolution proceedings occur at the
holding company level;
(4) designate particular judges in the Second and D.C.
Circuits who will hear these cases and who may appoint special
masters with technical expertise to aid in the resolution;
(5) continue to use FDIC expertise to resolve such
institutions under the oversight of the court;
(6) remove exemptions from bankruptcy proceedings for
certain subsidiaries of complex financial institutions, such as
insurance and brokerage operations;
(7) allow primary regulators to petition for involuntary
bankruptcy cases against a financial institution, to have
standing and raise motions, and to file plans of
reorganization;
(8) establish procedures for debtor-in-possession financing
to provide partial or complete payouts to some or all creditors
in certain circumstances;
(9) develop rules for the applicability of short-term
automatic stays for certain qualified financial contracts;
(10) recapitalize reorganized institutions at the holding
company level, possibly by converting long-term debt into
equity;
(11) collaborate with foreign governments to avoid domestic
``ring-fencing'' of failing multinational financial
institutions whose holding companies are located elsewhere;
(12) ensure that institutions in conservatorship do not
receive advantageous tax or regulatory treatment over
comparable financial institutions outside of the bankruptcy
process; and
(13) such other additional and conforming reforms as the
Committees consider necessary.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Financial Services, and in addition to the Committees on Appropriations, Science, Space, and Technology, Transportation and Infrastructure, and the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Financial Services, and in addition to the Committees on Appropriations, Science, Space, and Technology, Transportation and Infrastructure, and the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Financial Services, and in addition to the Committees on Appropriations, Science, Space, and Technology, Transportation and Infrastructure, and the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Financial Services, and in addition to the Committees on Appropriations, Science, Space, and Technology, Transportation and Infrastructure, and the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Financial Services, and in addition to the Committees on Appropriations, Science, Space, and Technology, Transportation and Infrastructure, and the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
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Referred to the Subcommittee on Highways and Transit.
Referred to the Subcommittee on Research and Technology.
Referred to the Subcommittee on Regulatory Reform, Commercial And Antitrust Law.