SUPERVISORY ACTIONS APPLICABLE TO UNDERCAPITALIZED REGULATED ENTITIES.

SEC. 1143. SUPERVISORY ACTIONS APPLICABLE TO UNDERCAPITALIZED REGULATED ENTITIES. Section 1365 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4615) is amended—(1) by striking “the enterprise” each place that term appears and inserting “the regulated entity”;(2) by striking “An enterprise” each place that term appears and inserting “A regulated entity”;(3) by striking “an enterprise” each place that term appears and inserting “a regulated entity”;(4) in subsection (a)—(A) by redesignating paragraphs (1) and (2) as paragraphs (2) and (3), respectively;(B) by inserting before paragraph (2), as redesignated, the following:“(1) Required monitoring.—The Director shall—“(A) closely monitor the condition of any undercapitalized regulated entity;“(B) closely monitor compliance with the capital restoration plan, restrictions, and requirements imposed on an undercapitalized regulated entity under this section; and“(C) periodically review the plan, restrictions, and requirements applicable to an undercapitalized regulated entity to determine whether the plan, restrictions, and requirements are achieving the purpose of this section.”; and(C) by adding at the end the following:“(4) Restriction of asset growth.—An undercapitalized regulated entity shall not permit its average total assets during any calendar quarter to exceed its average total assets during the preceding calendar quarter, unless—“(A) the Director has accepted the capital restoration plan of the regulated entity;“(B) any increase in total assets is consistent with the capital restoration plan; and“(C) the ratio of tangible equity to assets of the regulated entity increases during the calendar quarter at a 122 STAT. 2733 rate sufficient to enable the regulated entity to become adequately capitalized within a reasonable time.“(5) Prior approval of acquisitions and new activities.—An undercapitalized regulated entity shall not, directly or indirectly, acquire any interest in any entity or engage in any new activity, unless—“(A) the Director has accepted the capital restoration plan of the regulated entity, the regulated entity is implementing the plan, and the Director determines that the proposed action is consistent with and will further the achievement of the plan; or“(B) the Director determines that the proposed action will further the purpose of this subtitle.”;(5) in subsection (b)—(A) in the subsection heading, by striking “Discretionary”;(B) in the matter preceding paragraph (1), by striking “may” and inserting “shall”; and(C) in paragraph (2)—(i) by striking “make, in good faith, reasonable efforts necessary to”; and(ii) by striking the period at the end and inserting “in any material respect.”; and(6) by striking subsection (c) and inserting the following:“(c) Other Discretionary Safeguards.—The Director may take, with respect to an undercapitalized regulated entity, any of the actions authorized to be taken under section 1366 with respect to a significantly undercapitalized regulated entity, if the Director determines that such actions are necessary to carry out the purpose of this subtitle.”.