12 U.S.C. § 4547 — Enterprise guarantee fees

Page 1666 TITLE 12—BANKS AND BANKING § 4546 (5) direct the enterprises to undertake var- ious remedial actions, including suspension, probation, reprimand, or settlement, against lenders that have been found to have engaged in discriminatory lending practices in viola- tion of the Fair Housing Act or the Equal Credit Opportunity Act, pursuant to a final adjudication on the record, and after oppor- tunity for an administrative hearing, in ac- cordance with subchapter II of chapter 5 of title 5; and (6) periodically review and comment on the underwriting and appraisal guidelines of each enterprise to ensure that such guidelines are consistent with the Fair Housing Act and this section. (Pub. L. 102–550, title XIII, § 1325, Oct. 28, 1992, 106 Stat. 3955; Pub. L. 110–289, div. A, title I, § 1122(b), July 30, 2008, 122 Stat. 2689.) Editorial Notes REFERENCES IN TEXT The Fair Housing Act, referred to in pars. (2) and (4) to (6), is title VIII of Pub. L. 90–284, Apr. 11, 1968, 82 Stat. 81, which is classified principally to subchapter I (§ 3601 et seq.) of chapter 45 of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under sec- tion 3601 of Title 42 and Tables. The Equal Credit Opportunity Act, referred to in pars. (3) to (5), is title VII of Pub. L. 90–321, as added by Pub. L. 93–495, title V, § 503, Oct. 28, 1974, 88 Stat. 1521, which is classified generally to subchapter IV (§ 1691 et seq.) of chapter 41 of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see Short Title note set out under section 1601 of Title 15 and Tables. AMENDMENTS 2008—Pub. L. 110–289 inserted ‘‘of Housing and Urban Development’’ after ‘‘The Secretary’’ in introductory provisions. § 4546. Prohibition of public disclosure of propri- etary information (a) In general Subject to subsection (d), the Director may, by regulation or order, provide that certain in- formation shall be treated as proprietary infor- mation and not subject to disclosure under sec- tion 4543 of this title, section 1723a(n)(3) of this title, or section 1456(f)(3) of this title. (b) Protection of information on housing activi- ties The Director shall not provide public access to, or disclose to the public, any information re- quired to be submitted by an enterprise under section 1723a(n) of this title or section 1456(f) of this title that the Director determines is propri- etary. (c) Nondisclosure pending consideration This section may not be construed to author- ize the disclosure of information to, or examina- tion of data by, the public or a representative of any person or agency pending the issuance of a final decision under this section. (d) Mortgage information Subject to privacy considerations, as described in section 304(j) of the Home Mortgage Disclo- sure Act of 1975 (12 U.S.C. 2803(j)), the Director shall, by regulation or order, provide that cer- tain information relating to single family mort- gage data of the enterprises shall be disclosed to the public, in order to make available to the public— (1) the same data from the enterprises that is required of insured depository institutions under the Home Mortgage Disclosure Act of 1975 [12 U.S.C. 2801 et seq.]; and (2) information collected by the Director under section 4544(b)(6) of this title. (Pub. L. 102–550, title XIII, § 1326, Oct. 28, 1992, 106 Stat. 3955; Pub. L. 110–289, div. A, title I, §§ 1122(a)(1), 1127, July 30, 2008, 122 Stat. 2689, 2695.) Editorial Notes REFERENCES IN TEXT The Home Mortgage Disclosure Act of 1975, referred to in subsec. (d)(1), is title III of Pub. L. 94–200, Dec. 31, 1975, 89 Stat. 1125, which is classified principally to chapter 29 (§ 2801 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 2801 of this title and Tables. AMENDMENTS 2008—Pub. L. 110–289, § 1122(a)(1), substituted ‘‘Direc- tor’’ for ‘‘Secretary’’ wherever appearing in subsecs. (a) and (b). Subsec. (a). Pub. L. 110–289, § 1127(1), substituted ‘‘Subject to subsection (d), the Director’’ for ‘‘The Di- rector’’. Subsec. (d). Pub. L. 110–289, § 1127(2), added subsec. (d). § 4547. Enterprise guarantee fees (a) Definitions For purposes of this section, the following definitions shall apply: (1) Guarantee fee The term ‘‘guarantee fee’’— (A) means a fee described in subsection (b); and (B) includes— (i) the guaranty fee charged by the Fed- eral National Mortgage Association with respect to mortgage-backed securities; and (ii) the management and guarantee fee charged by the Federal Home Loan Mort- gage Corporation with respect to partici- pation certificates. (2) Average fees The term ‘‘average fees’’ means the average contractual fee rate of single-family guaranty arrangements by an enterprise entered into during 2011, plus the recognition of any up- front cash payments over an estimated aver- age life, expressed in terms of basis points. Such definition shall be interpreted in a man- ner consistent with the annual report on guar- antee fees by the Federal Housing Finance Agency. (b) Increase (1) In general (A) Phased increase required Subject to subsection (c), the Director shall require each enterprise to charge a guarantee fee in connection with any guar- Page 1667 TITLE 12—BANKS AND BANKING § 4548 1 So in original. Probably should be followed by ‘‘as’’. antee of the timely payment of principal and interest on securities, notes, and other obli- gations based on or backed by mortgages on residential real properties designed prin- cipally for occupancy of from 1 to 4 families, consummated after December 23, 2011. (B) Amount The amount of the increase required under this section shall be determined by the Di- rector to appropriately reflect the risk of loss, as well 1 the cost of capital allocated to similar assets held by other fully private regulated financial institutions, but such amount shall be not less than an average in- crease of 10 basis points for each origination year or book year above the average fees im- posed in 2011 for such guarantees. The Direc- tor shall prohibit an enterprise from offset- ting the cost of the fee to mortgage origina- tors, borrowers, and investors by decreasing other charges, fees, or premiums, or in any other manner. (2) Authority to limit offer of guarantee The Director shall prohibit an enterprise from consummating any offer for a guarantee to a lender for mortgage-backed securities, if— (A) the guarantee is inconsistent with the requirements of this section; or (B) the risk of loss is allowed to increase, through lowering of the underwriting stand- ards or other means, for the primary purpose of meeting the requirements of this section. (3) Deposit in Treasury Amounts received from fee increases im- posed under this section shall be deposited di- rectly into the United States Treasury, and shall be available only to the extent provided in subsequent appropriations Acts. The fees charged pursuant to this section shall not be considered a reimbursement to the Federal Government for the costs or subsidy provided to an enterprise. (c) Phase-in (1) In general The Director may provide for compliance with subsection (b) by allowing each enter- prise to increase the guarantee fee charged by the enterprise gradually over the 2-year period beginning on December 23, 2011, in a manner sufficient to comply with this section. In de- termining a schedule for such increases, the Director shall— (A) provide for uniform pricing among lenders; (B) provide for adjustments in pricing based on risk levels; and (C) take into consideration conditions in financial markets. (2) Rule of construction Nothing in this subsection shall be inter- preted to undermine the minimum increase re- quired by subsection (b). (d) Information collection and annual analysis The Director shall require each enterprise to provide to the Director, as part of its annual re- port submitted to Congress— (1) a description of— (A) changes made to up-front fees and an- nual fees as part of the guarantee fees nego- tiated with lenders; (B) changes to the riskiness of the new borrowers compared to previous origination years or book years; and (C) any adjustments required to improve for future origination years or book years, in order to be in complete compliance with sub- section (b); and (2) an assessment of how the changes in the guarantee fees described in paragraph (1) met the requirements of subsection (b). (e) Enforcement (1) Required adjustments Based on the information from subsection (d) and any other information the Director deems necessary, the Director shall require an enterprise to make adjustments in its guar- antee fee in order to be in compliance with subsection (b). (2) Noncompliance penalty An enterprise that has been found to be out of compliance with subsection (b) for any 2 consecutive years shall be precluded from pro- viding any guarantee for a period, determined by rule of the Director, but in no case less than 1 year. (3) Rule of construction Nothing in this subsection shall be inter- preted as preventing the Director from initi- ating and implementing an enforcement ac- tion against an enterprise, at a time the Di- rector deems necessary, under other existing enforcement authority. (f) Expiration The provisions of this section shall expire on October 1, 2032. (Pub. L. 102–550, title XIII, § 1327, as added Pub. L. 112–78, title IV, § 401, Dec. 23, 2011, 125 Stat. 1287; Pub. L. 117–58, div. I, § 90005, Nov. 15, 2021, 135 Stat. 1346.) Editorial Notes PRIOR PROVISIONS A prior section 4547, Pub. L. 102–550, title XIII, § 1327, Oct. 28, 1992, 106 Stat. 3956; Pub. L. 110–289, div. A, title I, § 1122(a)(1), July 30, 2008, 122 Stat. 2689, related to au- thority to require reports by enterprises, prior to re- peal by Pub. L. 110–289, div. A , title I, § 1104(b), July 30, 2008, 122 Stat. 2667. AMENDMENTS 2021—Subsec. (f). Pub. L. 117–58 substituted ‘‘2032’’ for ‘‘2021’’. § 4548. Regulations for use of credit scores The Director shall— (1) by regulation, establish standards and criteria for any process used by an enterprise to validate and approve credit scoring models pursuant to section 1717(b)(7) of this title and section 1454(d) of this title; and (2) ensure that any credit scoring model that is validated and approved by an enterprise under section 1717(b)(7) of this title or section