SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY UNDERCAPITALIZED REGULATED ENTITIES.

SEC. 1144. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY UNDERCAPITALIZED REGULATED ENTITIES. Section 1366 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4616) is amended—(1) in subsection (a)(2), by striking “undercapitalized enterprise” and inserting “undercapitalized”;(2) by striking “the enterprise” each place that term appears and inserting “the regulated entity”;(3) by striking “An enterprise” each place that term appears and inserting “A regulated entity”;(4) by striking “an enterprise” each place that term appears and inserting “a regulated entity”;(5) in subsection (b)—(A) in the subsection heading, by striking “Discretionary Supervisory” and inserting “Specific”;(B) in the matter preceding paragraph (1), by striking “may, at any time, take any” and inserting “shall carry out this section by taking, at any time, 1 or more”;(C) by striking paragraph (6);(D) by redesignating paragraph (5) as paragraph (6);(E) by inserting after paragraph (4) the following:“(5) Improvement of management.—Take 1 or more of the following actions:“(A) New election of board.—Order a new election for the board of directors of the regulated entity.122 STAT. 2734“(B) Dismissal of directors or executive officers.—Require the regulated entity to dismiss from office any director or executive officer who had held office for more than 180 days immediately before the date on which the regulated entity became undercapitalized. Dismissal under this subparagraph shall not be construed to be a removal pursuant to the enforcement powers of the Director under section 1377.“(C) Employ qualified executive officers.—Require the regulated entity to employ qualified executive officers (who, if the Director so specifies, shall be subject to approval by the Director).”; and(F) by adding at the end the following:“(7) Other action.—Require the regulated entity to take any other action that the Director determines will better carry out the purpose of this section than any of the other actions specified in this subsection.”; and(6) by striking subsection (c) and inserting the following:“(c) Restriction on Compensation of Executive Officers.—A regulated entity that is classified as significantly undercapitalized in accordance with section 1364 may not, without prior written approval by the Director—“(1) pay any bonus to any executive officer; or“(2) provide compensation to any executive officer at a rate exceeding the average rate of compensation of that officer (excluding bonuses, stock options, and profit sharing) during the 12 calendar months preceding the calendar month in which the regulated entity became significantly undercapitalized.”.