TEMPORARY AUTHORITY FOR PURCHASE OF OBLIGATIONS OF REGULATED ENTITIES BY SECRETARY OF TREASURY.

SEC. 1117. TEMPORARY AUTHORITY FOR PURCHASE OF OBLIGATIONS OF REGULATED ENTITIES BY SECRETARY OF TREASURY.(a) Fannie Mae.—Section 304 of the Federal National Mortgage Association Charter Act (12 U.S.C. 1719) is amended by adding at the end the following new subsection:“(g) Temporary Authority of Treasury to Purchase Obligations and Securities; Conditions.—“(1) Authority to purchase.—“(A) General authority.—In addition to the authority under subsection (c) of this section, the Secretary of the Treasury is authorized to purchase any obligations and other securities issued by the corporation under any section of this Act, on such terms and conditions as the Secretary may determine and in such amounts as the Secretary may determine. Nothing in this subsection requires the corporation to issue obligations or securities to the Secretary without mutual agreement between the Secretary and the corporation. Nothing in this subsection permits or authorizes the Secretary, without the agreement of the corporation, to engage in open market purchases of the common securities of the corporation.“(B) Emergency determination required.—In connection with any use of this authority, the Secretary must determine that such actions are necessary to—“(i) provide stability to the financial markets;“(ii) prevent disruptions in the availability of mortgage finance; and“(iii) protect the taxpayer.“(C) Considerations.—To protect the taxpayers, the Secretary of the Treasury shall take into consideration the following in connection with exercising the authority contained in this paragraph:“(i) The need for preferences or priorities regarding payments to the Government.“(ii) Limits on maturity or disposition of obligations or securities to be purchased.“(iii) The corporation’s plan for the orderly resumption of private market funding or capital market access.122 STAT. 2684“(iv) The probability of the corporation fulfilling the terms of any such obligation or other security, including repayment.“(v) The need to maintain the corporation’s status as a private shareholder-owned company.“(vi) Restrictions on the use of corporation resources, including limitations on the payment of dividends and executive compensation and any such other terms and conditions as appropriate for those purposes.“(D) Reports to congress.—Upon exercise of this authority, the Secretary shall report to the Committees on the Budget, Financial Services, and Ways and Means of the House of Representatives and the Committees on the Budget, Finance, and Banking, Housing, and Urban Affairs of the Senate as to the necessity for the purchase and the determinations made by the Secretary under subparagraph (B) and with respect to the considerations required under subparagraph (C), and the size, terms, and probability of repayment or fulfillment of other terms of such purchase.“(2) Rights; sale of obligations and securities.—“(A) Exercise of rights.—The Secretary of the Treasury may, at any time, exercise any rights received in connection with such purchases.“(B) Sale of obligation and securities.—The Secretary of the Treasury may, at any time, subject to the terms of the security or otherwise upon terms and conditions and at prices determined by the Secretary, sell any obligation or security acquired by the Secretary under this subsection.“(C) Application of sunset to purchased obligations or securities.—The authority of the Secretary of the Treasury to hold, exercise any rights received in connection with, or sell, any obligations or securities purchased is not subject to the provisions of paragraph (4).“(3) Funding.—For the purpose of the authorities granted in this subsection, the Secretary of the Treasury may use the proceeds of the sale of any securities issued under chapter 31 of Title 31, and the purposes for which securities may be issued under chapter 31 of Title 31 are extended to include such purchases and the exercise of any rights in connection with such purchases. Any funds expended for the purchase of, or modifications to, obligations and securities, or the exercise of any rights received in connection with such purchases under this subsection shall be deemed appropriated at the time of such purchase, modification, or exercise.“(4) Termination of authority.—The authority under this subsection (g), with the exception of paragraphs (2) and (3) of this subsection, shall expire December 31, 2009.“(5) Authority of the director with respect to executive compensation.—The Director shall have the power to approve, disapprove, or modify the executive compensation of the corporation, as defined under Regulation S-K, 17 C.F.R. 229.”.(b) Freddie Mac.—Section 306 of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1455) is amended by adding at the end the following new subsection:122 STAT. 2685 “(l) Temporary Authority of Treasury to Purchase Obligations and Securities; Conditions.—“(1) Authority to purchase.—“(A) General authority.—In addition to the authority under subsection (c) of this section, the Secretary of the Treasury is authorized to purchase any obligations and other securities issued by the Corporation under any section of this Act, on such terms and conditions as the Secretary may determine and in such amounts as the Secretary may determine. Nothing in this subsection requires the Corporation to issue obligations or securities to the Secretary without mutual agreement between the Secretary and the Corporation. Nothing in this subsection permits or authorizes the Secretary, without the agreement of the Corporation, to engage in open market purchases of the common securities of the Corporation.“(B) Emergency determination required.—In connection with any use of this authority, the Secretary must determine that such actions are necessary to—“(i) provide stability to the financial markets;“(ii) prevent disruptions in the availability of mortgage finance; and“(iii) protect the taxpayer.“(C) Considerations.—To protect the taxpayers, the Secretary of the Treasury shall take into consideration the following in connection with exercising the authority contained in this paragraph:“(i) The need for preferences or priorities regarding payments to the Government.“(ii) Limits on maturity or disposition of obligations or securities to be purchased.“(iii) The Corporation’s plan for the orderly resumption of private market funding or capital market access.“(iv) The probability of the Corporation fulfilling the terms of any such obligation or other security, including repayment.“(v) The need to maintain the Corporation’s status as a private shareholder-owned company.“(vi) Restrictions on the use of Corporation resources, including limitations on the payment of dividends and executive compensation and any such other terms and conditions as appropriate for those purposes.“(D) Reports to congress.—Upon exercise of this authority, the Secretary shall report to the Committees on the Budget, Financial Services, and Ways and Means of the House of Representatives and the Committees on the Budget, Finance, and Banking, Housing, and Urban Affairs of the Senate as to the necessity for the purchase and the determinations made by the Secretary under subparagraph (B) and with respect to the considerations required under subparagraph (C), and the size, terms, and probability of repayment or fulfillment of other terms of such purchase.“(2) Rights; sale of obligations and securities.—122 STAT. 2686“(A) Exercise of rights.—The Secretary of the Treasury may, at any time, exercise any rights received in connection with such purchases.“(B) Sale of obligation and securities.—The Secretary of the Treasury may, at any time, subject to the terms of the security or otherwise upon terms and conditions and at prices determined by the Secretary, sell any obligation or security acquired by the Secretary under this subsection.“(C) Application of sunset to purchased obligations or securities.—The authority of the Secretary of the Treasury to hold, exercise any rights received in connection with, or sell, any obligations or securities purchased is not subject to the provisions of paragraph (4).“(3) Funding.—For the purpose of the authorities granted in this subsection, the Secretary of the Treasury may use the proceeds of the sale of any securities issued under chapter 31 of Title 31, and the purposes for which securities may be issued under chapter 31 of Title 31 are extended to include such purchases and the exercise of any rights in connection with such purchases. Any funds expended for the purchase of, or modifications to, obligations and securities, or the exercise of any rights received in connection with such purchases under this subsection shall be deemed appropriated at the time of such purchase, modification, or exercise.“(4) Termination of authority.—The authority under this subsection (l), with the exception of paragraphs (2) and (3) of this subsection, shall expire December 31, 2009.“(5) Authority of the director with respect to executive compensation.—The Director shall have the power to approve, disapprove, or modify the executive compensation of the Corporation, as defined under Regulation S-K, 17 C.F.R. 229.”.(c) Federal Home Loan Banks.—Section 11 of the Federal Home Loan Bank Act (12 U.S.C. 1431) is amended by adding at the end the following new subsection:“(l) Temporary Authority of Treasury to Purchase Obligations; Conditions.—“(1) Authority to purchase.—“(A) General authority.—In addition to the authority under subsection (i) of this section, the Secretary of the Treasury is authorized to purchase any obligations issued by any Federal Home Loan Bank under any section of this Act, on such terms and conditions as the Secretary may determine and in such amounts as the Secretary may determine. Nothing in this subsection requires a Federal Home Loan Bank to issue obligations or securities to the Secretary without mutual agreement between the Secretary and the Federal Home Loan Bank. Nothing in this subsection permits or authorizes the Secretary, without the agreement of the Federal Home Loan Bank, to engage in open market purchases of the common securities of any Federal Home Loan Bank.“(B) Emergency determination required.—In connection with any use of this authority, the Secretary must determine that such actions are necessary to—“(i) provide stability to the financial markets;122 STAT. 2687“(ii) prevent disruptions in the availability of mortgage finance; and“(iii) protect the taxpayer.“(C) Considerations.—To protect the taxpayers, the Secretary of the Treasury shall take into consideration the following in connection with exercising the authority contained in this paragraph:“(i) The need for preferences or priorities regarding payments to the Government.“(ii) Limits on maturity or disposition of obligations or securities to be purchased.“(iii) The Federal Home Loan Bank’s plan for the orderly resumption of private market funding or capital market access.“(iv) The probability of the Federal Home Loan Bank fulfilling the terms of any such obligation or other security, including repayment.“(v) The need to maintain the Federal Home Loan Bank’s status as a private shareholder-owned company.“(vi) Restrictions on the use of Federal Home Loan Bank resources, including limitations on the payment of dividends and executive compensation and any such other terms and conditions as appropriate for those purposes.“(D) Reports to congress.—Upon exercise of this authority, the Secretary shall report to the Committees on the Budget, Financial Services, and Ways and Means of the House of Representatives and the Committees on the Budget, Finance, and Banking, Housing, and Urban Affairs of the Senate as to the necessity for the purchase and the determinations made by the Secretary under subparagraph (B) and with respect to the considerations required under subparagraph (C), and the size, terms, and probability of repayment or fulfillment of other terms of such purchase.“(2) Rights; sale of obligations and securities.—“(A) Exercise of rights.—The Secretary of the Treasury may, at any time, exercise any rights received in connection with such purchases.“(B) Sale of obligations.—The Secretary of the Treasury may, at any time, subject to the terms of the security or otherwise upon terms and conditions and at prices determined by the Secretary, sell any obligation acquired by the Secretary under this subsection.“(C) Application of sunset to purchased obligations.—The authority of the Secretary of the Treasury to hold, exercise any rights received in connection with, or sell, any obligations purchased is not subject to the provisions of paragraph (4).“(3) Funding.—For the purpose of the authorities granted in this subsection, the Secretary of the Treasury may use the proceeds of the sale of any securities issued under chapter 31 of Title 31, and the purposes for which securities may be issued under chapter 31 of Title 31 are extended to include such purchases and the exercise of any rights in connection with such purchases. Any funds expended for the purchase of, or modifications to, obligations and securities, or the exercise 122 STAT. 2688 of any rights received in connection with such purchases under this subsection shall be deemed appropriated at the time of such purchase, modification, or exercise.“(4) Termination of authority.—The authority under this subsection (l), with the exception of paragraphs (2) and (3) of this subsection, shall expire December 31, 2009.“(5) Authority of the director with respect to executive compensation.—The Director shall have the power to approve, disapprove, or modify the executive compensation of the Federal Home Loan Bank, as defined under Regulation S-K, 17 C.F.R. 229.”.