12 U.S.C. § 4566 — Monitoring and enforcing compliance

Page 1673 TITLE 12—BANKS AND BANKING § 4566 Editorial Notes REFERENCES IN TEXT The McKinney-Vento Homeless Assistance Act, re- ferred to in subsec. (a)(1)(B)(vi), is Pub. L. 100–77, July 22, 1987, 101 Stat. 482. Title IV of the Act is classified principally to subchapter IV (§ 11360 et seq.) of chapter 119 of Title 42, The Public Health and Welfare. For com- plete classification of this Act to the Code, see Short Title note set out under section 11301 of Title 42 and Tables. The Community Reinvestment Act of 1977, referred to in subsec. (b)(3)(B), is title VIII of Pub. L. 95–128, Oct. 12, 1977, 91 Stat. 1147, which is classified generally to chapter 30 (§ 2901 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 2901 of this title and Tables. AMENDMENTS 2008—Pub. L. 110–289, § 1129(a)(1), inserted ‘‘Duty to serve underserved markets and’’ before ‘‘other’’ in sec- tion catchline. Subsec. (a). Pub. L. 110–289, § 1129(a)(4), added subsec. (a). Former subsec. (a) redesignated (b). Pub. L. 110–289, § 1129(a)(3)(A)–(D), inserted ‘‘and to carry out the duty under subsection (a) of this section’’ before ‘‘, each enterprise shall’’ in introductory provi- sions and struck out par. (5) which read as follows: ‘‘as- sist in maintaining the affordability of assisted units in eligible multifamily housing projects with expiring contracts, as defined under the Multifamily Assisted Housing Reform and Affordability Act of 1997.’’ Pub. L. 110–289, § 1128(c)(1), substituted ‘‘housing goals established under this subpart’’ for ‘‘low- and mod- erate-income housing goal under section 4562 of this title, the special affordable housing goal under section 4563 of this title, and the central cities, rural areas, and other underserved areas housing goal under section 4564 of this title’’ in introductory provisions. Subsec. (b). Pub. L. 110–289, § 1129(a)(3)(E), redesig- nated subsec. (a) as (b). Pub. L. 110–289, § 1129(a)(2), struck out subsec. (b). Text read as follows: ‘‘Actions taken under subsection (a)(5) of this section shall constitute part of the con- tribution of each entity in meeting its affordable hous- ing goals under sections 4562, 4563, and 4564 of this title for any fiscal year, as determined by the Secretary.’’ Subsecs. (c), (d). Pub. L. 110–289, § 1129(a)(5), added subsecs. (c) and (d). 1997—Subsec. (a). Pub. L. 105–65, § 517(c)(3), designated existing provisions as subsec. (a) and inserted heading. Subsec. (a)(5). Pub. L. 105–65, § 517(c)(1), (2), (4), added par. (5). Subsec. (b). Pub. L. 105–65, § 517(c)(4), added subsec. (b). § 4566. Monitoring and enforcing compliance with housing goals (a) In general (1) Authority The Director shall monitor and enforce com- pliance with the housing goals established under this subpart and with the duty under section 4565(a) of this title of each enterprise with respect to underserved markets, as pro- vided in this section. (2) Guidelines The Director shall establish guidelines to measure the extent of compliance with the housing goals, which, except as provided in paragraph (5), may assign full credit, partial credit, or no credit toward achievement of the housing goals to different categories of mort- gage purchase activities of the enterprises, based on such criteria as the Director deems appropriate. (3) Extent of compliance In determining compliance with the housing goals established under this subpart, the Di- rector— (A) shall consider any single mortgage purchased by an enterprise as contributing to the achievement of each housing goal for which such mortgage purchase qualifies; and (B) may take into consideration the num- ber of housing units financed by any mort- gage on housing purchased by an enterprise. (4) Enforcement of duty to provide mortgage credit to underserved markets The duty under section 4565(a) of this title of each enterprise to serve underserved markets (as determined in accordance with section 4565(c) of this title) shall be enforceable under this section to the same extent and under the same provisions that the housing goals estab- lished under this subpart are enforceable. Such duty shall be enforceable only under this section, except that such duty shall not be subject to subsection (c)(7) of this section and shall not be enforceable under any other provi- sion of this chapter (including subpart 3 of this part) or under any provision of the Federal Na- tional Mortgage Association Charter Act [12 U.S.C. 1716 et seq.] or the Federal Home Loan Mortgage Corporation Act [12 U.S.C. 1451 et seq.]. (5) Additional credit The Director may assign additional credit toward achievement, under this section, of the housing goals for mortgage purchase activities of the enterprises that comply with the re- quirements of such goals and support housing that includes a licensed childcare center. The availability of additional credit under this paragraph shall not be used to increase any housing goal, subgoal, or target established under this subpart. (b) Notice and preliminary determination of fail- ure to meet goals (1) Notice If the Director preliminarily determines that an enterprise has failed, or that there is a substantial probability that an enterprise will fail, to meet any housing goal under this subpart, the Director shall provide written no- tice to the enterprise of such a preliminary de- termination, the reasons for such determina- tion, and the information on which the Direc- tor based the determination. (2) Response period (A) In general During the 30-day period beginning on the date on which an enterprise is provided no- tice under paragraph (1), the enterprise may submit to the Director any written informa- tion that the enterprise considers appro- priate for consideration by the Director in finally determining whether such failure has occurred or whether the achievement of such goal was or is feasible. (B) Extended period The Director may extend the period under subparagraph (A) for good cause for not more than 30 additional days. Page 1674 TITLE 12—BANKS AND BANKING § 4566 (C) Shortened period The Director may shorten the period under subparagraph (A) for good cause. (D) Failure to respond The failure of an enterprise to provide in- formation during the 30-day period under this paragraph (as extended or shortened) shall waive any right of the enterprise to comment on the proposed determination or action of the Director. (3) Consideration of information and final de- termination (A) In general After the expiration of the response period under paragraph (2), or upon receipt of infor- mation provided during such period by the enterprise, whichever occurs earlier, the Di- rector shall issue a final determination on— (i) whether the enterprise has failed, or there is a substantial probability that the enterprise will fail, to meet the housing goal; and (ii) whether (taking into consideration market and economic conditions and the financial condition of the enterprise) the achievement of the housing goal was or is feasible. (B) Considerations In making a final determination under subparagraph (A), the Director shall take into consideration any relevant information submitted by the enterprise during the re- sponse period. (C) Notice The Director shall provide written notice, including a response to any information sub- mitted during the response period, to the en- terprise, the Committee on Banking, Hous- ing, and Urban Affairs of the Senate, and the Committee on Financial Services of the House of Representatives, of— (i) each final determination under this paragraph that an enterprise has failed, or that there is a substantial probability that the enterprise will fail, to meet a housing goal; (ii) each final determination that the achievement of a housing goal was or is feasible; and (iii) the reasons for each such final de- termination. (c) Cease and desist, civil money penalties, and remedies including housing plans (1) Requirement If the Director finds, pursuant to subsection (b), that there is a substantial probability that an enterprise will fail, or has actually failed, to meet any housing goal under this subpart, and that the achievement of the housing goal was or is feasible, the Director may require that the enterprise submit a housing plan under this subsection. If the Director makes such a finding and the enterprise refuses to submit such a plan, submits an unacceptable plan, or fails to comply with the plan, the Di- rector may issue a cease and desist order in accordance with section 4581 of this title and impose civil money penalties in accordance with section 4585 of this title. (2) Housing plan If the Director requires a housing plan under this subsection, such a plan shall be— (A) a feasible plan describing the specific actions the enterprise will take— (i) to achieve the goal for the next cal- endar year; and (ii) if the Director determines that there is a substantial probability that the enter- prise will fail to meet a goal in the current year, to make such improvements and changes in its operations as are reasonable in the remainder of such year; and (B) sufficiently specific to enable the Di- rector to monitor compliance periodically. (3) Deadline for submission The Director shall establish a deadline for an enterprise to submit a housing plan to the Director, which may not be more than 45 days after the enterprise is provided notice. The Di- rector may extend the deadline to the extent that the Director determines necessary. Any extension of the deadline shall be in writing and for a time certain. (4) Approval The Director shall review each submission by an enterprise, including a housing plan sub- mitted under this subsection, and, not later than 30 days after submission, approve or dis- approve the plan or other action. The Director may extend the period for approval or dis- approval for a single additional 30-day period if the Director determines it necessary. The Director shall approve any plan that the Di- rector determines is likely to succeed, and conforms with the Federal National Mortgage Association Charter Act [12 U.S.C. 1716 et seq.] or the Federal Home Loan Mortgage Corpora- tion Act [12 U.S.C. 1451 et seq.] (as applicable), this chapter, and any other applicable provi- sion of law. (5) Notice of approval and disapproval The Director shall provide written notice to any enterprise submitting a housing plan of the approval or disapproval of the plan (which shall include the reasons for any disapproval of the plan) and of any extension of the period for approval or disapproval. (6) Resubmission If the initial housing plan submitted by an enterprise under this section is disapproved, the enterprise shall submit an amended plan acceptable to the Director not later than 15 days after such disapproval, or such longer pe- riod that the Director determines is in the public interest. (7) Cease and desist orders; civil money pen- alties Solely with respect to the housing goals es- tablished under sections 4562(a) and 4563(a)(1) of this title, if the Director requires an enter- prise to submit a housing plan under this sub- section and the enterprise refuses to submit such a plan, submits an unacceptable plan, or fails to comply with the plan, the Director Page 1675 TITLE 12—BANKS AND BANKING § 4567 may issue a cease and desist order in accord- ance with section 4581 of this title, impose civil money penalties in accordance with sec- tion 4585 of this title, exercise other appro- priate enforcement authority or seek other ap- propriate actions. (Pub. L. 102–550, title XIII, § 1336, Oct. 28, 1992, 106 Stat. 3962; Pub. L. 110–289, div. A, title I, §§ 1122(a)(1), 1128(c)(2), 1129(b), (c), 1130(a), July 30, 2008, 122 Stat. 2689, 2702, 2705, 2706.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in subsecs. (a)(4) and (c)(4), 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. The Federal National Mortgage Association Charter Act, referred to in subsecs. (a)(4) and (c)(4), is title III of act June 27, 1934, ch. 847, 48 Stat. 1252, which is clas- sified generally to subchapter III (§ 1716 et seq.) of chap- ter 13 of this title. For complete classification of this Act to the Code, see Short Title note set out under sec- tion 1716 of this title and Tables. The Federal Home Loan Mortgage Corporation Act, referred to in subsecs. (a)(4) and (c)(4), is title III of Pub. L. 91–351, July 24, 1970, 84 Stat. 451, which is classi- fied generally to chapter 11A (§ 1451 et seq.) of this title. For complete classification of this Act to the Code, see Short Title and Statement of Purpose note set out under section 1451 of this title and Tables. AMENDMENTS 2008—Subsec. (a). Pub. L. 110–289, § 1122(a)(1), sub- stituted ‘‘Director’’ for ‘‘Secretary’’ wherever appear- ing in pars. (1) to (3). Subsec. (a)(1). Pub. L. 110–289, § 1129(b)(1), inserted ‘‘and with the duty under section 4565(a) of this title of each enterprise with respect to underserved markets,’’ before ‘‘as provided in this section’’. Pub. L. 110–289, § 1128(c)(2), substituted ‘‘this subpart’’ for ‘‘sections 4562, 4563, and 4564 of this title,’’. Subsec. (a)(2). Pub. L. 110–289, § 1129(c)(1), inserted ‘‘, except as provided in paragraph (5),’’ before ‘‘may assign’’. Subsec. (a)(4). Pub. L. 110–289, § 1129(b)(2), added par. (4). Subsec. (a)(5). Pub. L. 110–289, § 1129(c)(2), added par. (5). Subsecs. (b), (c). Pub. L. 110–289, § 1130(a), added sub- secs. (b) and (c) and struck out former subsecs. (b) and (c) which related to notice and determination of failure to meet housing goals and submission of housing plans, respectively. § 4567. Affordable housing allocations (a) Set aside and allocation of amounts by enter- prises Subject to subsection (b), in each fiscal year— (1) the Federal Home Loan Mortgage Cor- poration shall— (A) set aside an amount equal to 4.2 basis points for each dollar of the unpaid principal balance of its total new business purchases; and (B) allocate or otherwise transfer— (i) 65 percent of such amounts to the Sec- retary of Housing and Urban Development to fund the Housing Trust Fund estab- lished under section 4568 of this title; and (ii) 35 percent of such amounts to fund the Capital Magnet Fund established pur- suant to section 4569 of this title; and (2) the Federal National Mortgage Associa- tion shall— (A) set aside an amount equal to 4.2 basis points for each dollar of unpaid principal balance of its total new business purchases; and (B) allocate or otherwise transfer— (i) 65 percent of such amounts to the Sec- retary of Housing and Urban Development to fund the Housing Trust Fund estab- lished under section 4568 of this title; and (ii) 35 percent of such amounts to fund the Capital Magnet Fund established pur- suant to section 4569 of this title. (b) Suspension of contributions The Director shall temporarily suspend alloca- tions under subsection (a) by an enterprise upon a finding by the Director that such allocations— (1) are contributing, or would contribute, to the financial instability of the enterprise; (2) are causing, or would cause, the enter- prise to be classified as undercapitalized; or (3) are preventing, or would prevent, the en- terprise from successfully completing a cap- ital restoration plan under section 4622 of this title. (c) Prohibition of pass-through of cost of alloca- tions The Director shall, by regulation, prohibit each enterprise from redirecting the costs of any allocation required under this section, through increased charges or fees, or decreased pre- miums, or in any other manner, to the origina- tors of mortgages purchased or securitized by the enterprise. (d) Enforcement of requirements on enterprise Compliance by the enterprises with the re- quirements under this section shall be enforce- able under subpart 3. Any reference in such sub- part to this part or to an order, rule, or regula- tion under this part specifically includes this section and any order, rule, or regulation under this section. (e) Required amount for HOPE reserve fund Of the aggregate amount allocated under sub- section (a), 25 percent shall be deposited into a fund established in the Treasury of the United States by the Secretary of the Treasury for such purpose. (f) Limitation No funds under this chapter may be used in conjunction with property taken by eminent do- main, unless eminent domain is employed only for a public use, except that, for purposes of this section, public use shall not be construed to in- clude economic development that primarily ben- efits any private entity. (Pub. L. 102–550, title XIII, § 1337, as added Pub. L. 110–289, div. A, title I, § 1131(b), July 30, 2008, 122 Stat. 2711.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in subsec. (f), 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