§4501 — Title 12 Banks and Banking | U.S. Code

Summary

Congress requires stronger federal oversight of the two mortgage companies and the Federal Home Loan Banks because they play a big role in U.S. housing and the economy and reducing their chance of failure is important. Enterprises — Fannie Mae and Freddie Mac. Banks — the Federal Home Loan Banks. Right now they pose low risk of insolvency, but they and their bonds are not guaranteed by the U.S. government. The regulator must be independent and able to set capital rules, require financial reports and proper records, inspect books, and enforce rules. The mortgage companies must help finance affordable housing for low- and moderate-income families while staying financially sound and earning a reasonable return. The Federal Home Loan Bank Act should be changed to make safety and soundness the top job of the Federal Housing Finance Board.

Title 12, §4501

Banks and Banking — Source: USLM XML via OLRC

The Congress finds that—

(1)the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation (referred to in this section collectively as the “enterprises”), and the Federal Home Loan Banks (referred to in this section as the “Banks”), have important public missions that are reflected in the statutes and charter Acts establishing the Banks and the enterprises;

(2)because the continued ability of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation to accomplish their public missions is important to providing housing in the United States and the health of the Nation’s economy, more effective Federal regulation is needed to reduce the risk of failure of the enterprises;

(3)considering the current operating procedures of the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, and the Federal Home Loan Banks, the enterprises and the Banks currently pose low financial risk of insolvency;

(4)neither the enterprises nor the Banks, nor any securities or obligations issued by the enterprises or the Banks, are backed by the full faith and credit of the United States;

(5)an entity regulating the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation should have sufficient autonomy from the enterprises and special interest groups;

(6)an entity regulating such enterprises should have the authority to establish capital standards, require financial disclosure, prescribe adequate standards for books and records and other internal controls, conduct examinations when necessary, and enforce compliance with the standards and rules that it establishes;

(7)the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation have an affirmative obligation to facilitate the financing of affordable housing for low- and moderate-income families in a manner consistent with their overall public purposes, while maintaining a strong financial condition and a reasonable economic return; and

(8)the Federal Home Loan Bank Act [12 U.S.C. 1421 et seq.] should be amended to emphasize that providing for financial safety and soundness of the Federal Home Loan Banks is the primary mission of the Federal Housing Finance Board.

Notes & Related Subsidiaries

Editorial Notes

References in Text

The Federal Home Loan Bank Act, referred to in par. (8), is act July 22, 1932, ch. 522, 47 Stat. 725, which is classified generally to chapter 11 (§ 1421 et seq.) of this title. For complete classification of this Act to the Code, see section 1421 of this title and Tables.

Statutory Notes and Related Subsidiaries

Short Title

of 2008 Amendment Pub. L. 110–289, § 1(a),

July 30, 2008, 122 Stat. 2654, provided that: “This Act [see Tables for classification] may be cited as the ‘Housing and Economic Recovery Act of 2008’.” Pub. L. 110–289, div. A, § 1001,

July 30, 2008, 122 Stat. 2659, provided that: “This division [see Tables for classification] may be cited as the ‘Federal Housing Finance Regulatory Reform Act of 2008’.”

Short Title

Pub. L. 102–550, title XIII, § 1301, Oct. 28, 1992, 106 Stat. 3941, provided that: “This title [enacting this chapter, amending section 1422a, 1430, 1430b, 1451 to 1456, 1716 to 1719, 1723, 1723a, and 1723c of this title, section 3132 and 5313 of Title 5, Government Organization and Employees, section 1905 of Title 18, Crimes and Criminal Procedure, and section 3534 of Title 42, The Public Health and Welfare, enacting provisions set out as notes under section 1451, 1452, 1723, and 4562 of this title, and amending provisions set out as a note under section 1451 of this title] may be cited as the ‘Federal Housing Enterprises Financial Safety and Soundness Act of 1992’.”

§4501 Congressional Findings

Summary

Title 12, §4501

Notes & Related Subsidiaries

Editorial Notes

References in Text

Statutory Notes and Related Subsidiaries

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