12 U.S.C. § 4513 — Duties and authorities of Director

Page 1647 TITLE 12—BANKS AND BANKING § 4513 powers, and duties with respect to the over- sight of the enterprises as the Director shall prescribe. (d) Deputy Director of the Division of Federal Home Loan Bank Regulation (1) In general The Agency shall have a Deputy Director of the Division of Federal Home Loan Bank Reg- ulation, who shall be designated by the Direc- tor from among individuals who are citizens of the United States, have a demonstrated under- standing of financial management or over- sight, and have a demonstrated understanding of the Federal Home Loan Bank System and housing finance. (2) Functions The Deputy Director of the Division of Fed- eral Home Loan Bank Regulation shall have such functions, powers, and duties with re- spect to the oversight of the Federal Home Loan Banks as the Director shall prescribe. (e) Deputy Director for Housing Mission and Goals (1) In general The Agency shall have a Deputy Director for Housing Mission and Goals, who shall be des- ignated by the Director from among individ- uals who are citizens of the United States, and have a demonstrated understanding of the housing markets and housing finance. (2) Functions The Deputy Director for Housing Mission and Goals shall have such functions, powers, and duties with respect to the oversight of the housing mission and goals of the enterprises, and with respect to oversight of the housing fi- nance and community and economic develop- ment mission of the Federal Home Loan Banks, as the Director shall prescribe. (3) Considerations In exercising such functions, powers, and du- ties, the Deputy Director for Housing Mission and Goals shall consider the differences be- tween the enterprises and the Federal Home Loan Banks, including those described in sec- tion 4513(d) of this title. (f) Acting Director In the event of the death, resignation, sick- ness, or absence of the Director, the President shall designate either the Deputy Director of the Division of Enterprise Regulation, the Dep- uty Director of the Division of Federal Home Loan Bank Regulation, or the Deputy Director for Housing Mission and Goals, to serve as act- ing Director until the return of the Director, or the appointment of a successor pursuant to sub- section (b). (g) Limitations The Director and each of the Deputy Directors may not— (1) have any direct or indirect financial in- terest in any regulated entity or entity-affili- ated party; (2) hold any office, position, or employment in any regulated entity or entity-affiliated party; or (3) have served as an executive officer or di- rector of any regulated entity or entity-affili- ated party at any time during the 3-year pe- riod preceding the date of appointment or des- ignation of such individual as Director or Dep- uty Director, as applicable. (Pub. L. 102–550, title XIII, § 1312, as added Pub. L. 110–289, div. A, title I, § 1101, July 30, 2008, 122 Stat. 2662.) Editorial Notes REFERENCES IN TEXT The effective date of the Federal Housing Finance Regulatory Reform Act of 2008, referred to in subsec. (b)(5), probably means the date of enactment of Pub. L. 110–289, which was approved July 30, 2008. CONSTITUTIONALITY For information regarding the constitutionality of provisions of subsection (b)(2) of this section, see the Table of Laws Held Unconstitutional in Whole or in Part by the Supreme Court on the Constitution Anno- tated website, constitution.congress.gov. PRIOR PROVISIONS A prior section 4512, Pub. L. 102–550, title XIII, § 1312, Oct. 28, 1992, 106 Stat. 3945, related to the Director and Deputy Director of the Office of Federal Housing Enter- prise Oversight, prior to repeal by Pub. L. 110–289, div. A, title I, § 1101, July 30, 2008, 122 Stat. 2661. § 4513. Duties and authorities of Director (a) Duties (1) Principal duties The principal duties of the Director shall be— (A) to oversee the prudential operations of each regulated entity; and (B) to ensure that— (i) each regulated entity operates in a safe and sound manner, including mainte- nance of adequate capital and internal controls; (ii) the operations and activities of each regulated entity foster liquid, efficient, competitive, and resilient national hous- ing finance markets (including activities relating to mortgages on housing for low- and moderate-income families involving a reasonable economic return that may be less than the return earned on other ac- tivities); (iii) each regulated entity complies with this chapter and the rules, regulations, guidelines, and orders issued under this chapter and the authorizing statutes; (iv) each regulated entity carries out its statutory mission only through activities that are authorized under and consistent with this chapter and the authorizing stat- utes; and (v) the activities of each regulated enti- ty and the manner in which such regulated entity is operated are consistent with the public interest. (2) Scope of authority The authority of the Director shall include the authority— (A) to review and, if warranted based on the principal duties described in paragraph Page 1648 TITLE 12—BANKS AND BANKING § 4513 1 So in original. No subsecs. (d) and (e) have been enacted. 2 So in original. The word ‘‘the’’ probably should not appear. (1), reject any acquisition or transfer of a controlling interest in a regulated entity; and (B) to exercise such incidental powers as may be necessary or appropriate to fulfill the duties and responsibilities of the Direc- tor in the supervision and regulation of each regulated entity. (3) Coordination with the Chairman of the Board of Governors of the Federal Reserve System (A) Consultation The Director shall consult with, and con- sider the views of, the Chairman of the Board of Governors of the Federal Reserve System, with respect to the risks posed by the regulated entities to the financial sys- tem, prior to issuing any proposed or final regulations, orders, and guidelines with re- spect to the exercise of the additional au- thority provided in this Act regarding pru- dential management and operations stand- ards, safe and sound operations of, and cap- ital requirements and portfolio standards applicable to the regulated entities (as such term is defined in section 4502 of this title). The Director also shall consult with the Chairman regarding any decision to place a regulated entity into conservatorship or re- ceivership. (B) Information sharing To facilitate the consultative process, the Director shall share information with the Board of Governors of the Federal Reserve System on a regular, periodic basis as deter- mined by the Director and the Board regard- ing the capital, asset and liabilities, finan- cial condition, and risk management prac- tices of the regulated entities as well as any information related to financial market sta- bility. (C) Termination of consultation requirement The requirement of the Director to consult with the Board of Governors of the Federal Reserve System under this paragraph shall expire at the conclusion of December 31, 2009. (b) Delegation of authority The Director may delegate to officers and em- ployees of the Agency any of the functions, pow- ers, or duties of the Director, as the Director considers appropriate. (c) Litigation authority (1) In general In enforcing any provision of this chapter, any regulation or order prescribed under this chapter, or any other provision of law, rule, regulation, or order, or in any other action, suit, or proceeding to which the Director is a party or in which the Director is interested, and in the administration of conservatorships and receiverships, the Director may act in the Director’s own name and through the Direc- tor’s own attorneys. (2) Subject to suit Except as otherwise provided by law, the Di- rector shall be subject to suit (other than suits on claims for money damages) by a regulated entity with respect to any matter under this chapter or any other applicable provision of law, rule, order, or regulation under this chap- ter, in the United States district court for the judicial district in which the regulated entity has its principal place of business, or in the United States District Court for the District of Columbia, and the Director may be served with process in the manner prescribed by the Federal Rules of Civil Procedure. (f) 1 Recognition of distinctions between the en- terprises and the Federal Home Loan Banks Prior to promulgating any regulation or tak- ing any other formal or informal agency action of general applicability and future effect relat- ing to the Federal Home Loan Banks (other than any regulation, advisory document, or examina- tion guidance of the Federal Housing Finance Board that the Director reissues after the au- thority of the Director over the Federal Home Loan Banks takes effect), including the issuance of an advisory document or examination guid- ance, the Director shall consider the differences between the Federal Home Loan Banks and the enterprises with respect to— (1) the Banks’— (A) cooperative ownership structure; (B) the 2 mission of providing liquidity to members; (C) affordable housing and community de- velopment mission; (D) capital structure; and (E) joint and several liability; and (2) any other differences that the Director considers appropriate. (Pub. L. 102–550, title XIII, § 1313, Oct. 28, 1992, 106 Stat. 3945; Pub. L. 105–276, title II, § 202(b), Oct. 21, 1998, 112 Stat. 2483; Pub. L. 105–277, div. A, § 122, Oct. 21, 1998, 112 Stat. 2681–546; Pub. L. 110–289, div. A, title I, §§ 1102(a), 1118, title II, § 1201, July 30, 2008, 122 Stat. 2663, 2688, 2782.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in subsecs. (a)(1)(B)(iii), (iv) and (c), was in the original ‘‘this title’’, meaning title XIII of Pub. L. 102–550, Oct. 28, 1992, 106 Stat. 3941, which is classified principally to this chapter. For com- plete classification of title XIII to the Code, see Short Title note set out under section 4501 of this title and Tables. This Act, referred to in subsec. (a)(3)(A), is Pub. L. 102–550, Oct. 28, 1992, 106 Stat. 3672, known as the Hous- ing and Community Development Act of 1992. For com- plete classification of this Act to the Code, see Short Title of 1992 Amendment note set out under section 5301 of Title 42, The Public Health and Welfare, and Tables. The Federal Rules of Civil Procedure, referred to in subsec. (c)(2), are set out in the Appendix to Title 28, Judiciary and Judicial Procedure. AMENDMENTS 2008—Pub. L. 110–289, § 1102(a), amended section gen- erally. Prior to amendment, section consisted of sub- secs. (a) to (e) relating to duty and authority of the Di- rector of Office of Federal Housing Enterprise Over- sight. Page 1649 TITLE 12—BANKS AND BANKING § 4513b Subsec. (a)(3). Pub. L. 110–289, § 1118, added par. (3). Subsec. (f). Pub. L. 110–289, § 1201, added subsec. (f). 1998—Subsec. (b)(9) to (12). Pub. L. 105–276, which di- rected the amendment of subsec. (b) by redesignating pars. (9) to (11) as (10) to (12), respectively, and adding a new par. (9) which read ‘‘default loss protection levels under section 1454(a)(2)(D) of this title;’’ was repealed by Pub. L. 105–277, effective upon enactment of Pub. L. 105–276. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1998 AMENDMENT Pub. L. 105–277, div. A, § 122, Oct. 21, 1998, 112 Stat. 2681–546, provided that the amendment made by section 122 is effective upon enactment of Pub. L. 105–276 (Oct. 21, 1998). § 4513a. Federal Housing Finance Oversight Board (a) In general There is established the Federal Housing Fi- nance Oversight Board, which shall advise the Director with respect to overall strategies and policies in carrying out the duties of the Direc- tor under this chapter. (b) Limitations The Board may not exercise any executive au- thority, and the Director may not delegate to the Board any of the functions, powers, or duties of the Director. (c) Composition The Board shall be comprised of 4 members, of whom— (1) 1 member shall be the Secretary of the Treasury; (2) 1 member shall be the Secretary of Hous- ing and Urban Development; (3) 1 member shall be the Chairman of the Securities and Exchange Commission; and (4) 1 member shall be the Director, who shall serve as the Chairperson of the Board. (d) Meetings (1) In general The Board shall meet upon notice by the Di- rector, but in no event shall the Board meet less frequently than once every 3 months. (2) Special meetings Either the Secretary of the Treasury, the Secretary of Housing and Urban Development, or the Chairman of the Securities and Ex- change Commission may, upon giving written notice to the Director, require a special meet- ing of the Board. (e) Testimony On an annual basis, the Board shall testify be- fore Congress regarding— (1) the safety and soundness of the regulated entities; (2) any material deficiencies in the conduct of the operations of the regulated entities; (3) the overall operational status of the reg- ulated entities; (4) an evaluation of the performance of the regulated entities in carrying out their respec- tive missions; (5) operations, resources, and performance of the Agency; and (6) such other matters relating to the Agen- cy and its fulfillment of its mission, as the Board determines appropriate. (Pub. L. 102–550, title XIII, § 1313A, as added Pub. L. 110–289, div. A, title I, § 1103(a), July 30, 2008, 122 Stat. 2665.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in subsec. (a), was in the original ‘‘this title’’, meaning title XIII of Pub. L. 102–550, Oct. 28, 1992, 106 Stat. 3941, which is classified principally to this chapter. For complete classification of title XIII to the Code, see Short Title note set out under section 4501 of this title and Tables. § 4513b. Prudential management and operations standards (a) Standards The Director shall establish standards, by reg- ulation or guideline, for each regulated entity relating to— (1) adequacy of internal controls and infor- mation systems taking into account the na- ture and scale of business operations; (2) independence and adequacy of internal audit systems; (3) management of interest rate risk expo- sure; (4) management of market risk, including standards that provide for systems that accu- rately measure, monitor, and control market risks and, as warranted, that establish limita- tions on market risk; (5) adequacy and maintenance of liquidity and reserves; (6) management of asset and investment portfolio growth; (7) investments and acquisitions of assets by a regulated entity, to ensure that they are consistent with the purposes of this chapter and the authorizing statutes; (8) overall risk management processes, in- cluding adequacy of oversight by senior man- agement and the board of directors and of processes and policies to identify, measure, monitor, and control material risks, including reputational risks, and for adequate, well-test- ed business resumption plans for all major sys- tems with remote site facilities to protect against disruptive events; (9) management of credit and counterparty risk, including systems to identify concentra- tions of credit risk and prudential limits to re- strict exposure of the regulated entity to a single counterparty or groups of related counterparties; (10) maintenance of adequate records, in ac- cordance with consistent accounting policies and practices that enable the Director to evaluate the financial condition of the regu- lated entity; and (11) such other operational and management standards as the Director determines to be ap- propriate. (b) Failure to meet standards (1) Plan requirement (A) In general If the Director determines that a regulated entity fails to meet any standard established under subsection (a)—