Sec. 260. Authority to establish temporary capital ratios in cases of nationwide countercyclical market adjustment
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The Director may suspend the applicability of the capital ratio under section 256(b) for the Mutual Mortgage Insurance Fund or any capital reserve requirement established pursuant to section 259 for any Fund specified under such section and establish a temporary alternative capital ratio with respect to such Fund for a specified period of time, but only upon a joint determination by the Director and the Chief Risk Officer that— available credit throughout the United States or a significant portion of the United States for the purchase of the types of residences for which mortgages that obligations of such Fund are made has contracted significantly, as measured by the credit availability measure of the Office of the Comptroller of the Currency; housing prices throughout the United States or a significant portion of the United States have declined significantly, as measured by the applicable housing price index of the Federal Housing Finance Agency; or available credit for the purchase of housing or such other economic conditions exist sufficient to evidence a significant contraction of capital throughout the United States or a significant portion of the United States, as measured by a metric identified by the Director and the Chief Risk Officer in a written notice made publicly available, and provided to the Congress, in advance of such determination.
Upon making a determination under subsection (a), the Director and the Chief Risk Officer shall also identify measurable criteria for determining that the conditions determined under subsection
(a)have ceased to exist. Upon making a determination under subsection (a), the Director and the Chief Risk Officer shall provide written notice to the Congress of such determination and the specific measurable criteria identified pursuant to subsection (b). During any period that a temporary alternative capital ratio is in effect pursuant to subsection
(a)with respect to any Fund— in the case of a temporary capital ratio for the Mutual Mortgage Insurance Fund, subsections
(a)and
(c)of section 257 and section 258 shall not apply; such temporary and alternative capital classifications as the Director shall establish shall be in effect with respect to such Fund; and the Director shall require the FHA or the Secretary of Agriculture (as appropriate) to submit and carry out a capital restoration plan for such Fund meeting the requirements under section 258(d) and may take actions under section 258(b) with respect to such Fund only in accordance with such standards relating to such temporary and alternative capital classifications for such Fund as the Director shall establish. Any temporary alternative capital ratio established pursuant to subsection
(a)shall terminate upon the earlier of— the expiration of the 18-month period beginning upon the date that notification under subsection
(c)is provided to the Congress of the determination under subsection (a); or the occurrence of the conditions identified pursuant to subsection (b). Nothing in this section may be construed to prevent multiple or consecutive periods during which temporary alternative capital ratios are in effect pursuant to this section.