§4542. Prior approval authority for new programs

(a) Authority

The Secretary shall require each enterprise to obtain the approval of the Secretary for any new program of the enterprise before implementing the program.

(b) Standard for approval

(1) Permanent standard

Except as provided in paragraph (2), the Secretary shall approve any new program of an enterprise for purposes of subsection (a) of this section unless-

(A) for a new program of the Federal National Mortgage Association, the Secretary determines that the program is not authorized under paragraph (2), (3), (4), or (5) of section 1717(b) of this title, or under section 1719 of this title;

(B) for a new program of the Federal Home Loan Mortgage Corporation, the Secretary determines that the program is not authorized under section 1454(a)(1), (4), or (5) of this title; or

(C) the Secretary determines that the new program is not in the public interest.

(2) Transition standard

Before the date occurring 12 months after the date of the effectiveness of the regulations under section 4611(e) of this title establishing the risk-based capital test, the Secretary shall approve any new program of an enterprise for purposes of subsection (a) of this section unless-

(A) The ¹ Secretary makes a determination as described in paragraph (1)(A), (B), or (C); or

(B) the Director determines that the new program would risk significant deterioration of the financial condition of the enterprise.

(c) Procedure for approval

(1) Submission of request

To obtain the approval of the Secretary for purposes of subsection (a) of this section, an enterprise shall submit to the Secretary a written request for approval of the new program that describes the program.

(2) Response

The Secretary shall, not later than the expiration of the 45-day period beginning upon the submission of a request for approval, approve the request or submit to the Committee on Banking, Finance and Urban Affairs of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate a report explaining the reasons for not approving the request. The Secretary may extend such period for a single additional 15-day period only if the Secretary requests additional information from the enterprise.

(3) Failure to respond

If the Secretary fails to approve the request or fails to submit a report under paragraph (2) during the period under such paragraph, the request shall be considered to have been approved.

(4) Review of disapproval

(A) Unauthorized new programs

If the Secretary submits a report under paragraph (2) of this subsection disapproving a request for approval on the grounds under subparagraph (A) or (B) of subsection (b)(1) of this section, the Secretary shall provide the enterprise submitting the request with a timely opportunity to review and supplement the administrative record.

(B) New programs not in public interest

If the Secretary submits a report under paragraph (2) of this subsection disapproving a request for approval on the grounds under subsection (b)(1)(C) or (b)(2)(B) of this section, the Secretary shall provide the enterprise submitting the request notice of, and opportunity for, a hearing on the record regarding such disapproval.

( Pub. L. 102–550, title XIII, §1322, Oct. 28, 1992, 106 Stat. 3953 .)

Change of Name

Committee on Banking, Finance and Urban Affairs of House of Representatives treated as referring to Committee on Banking and Financial Services of House of Representatives by section 1(a) of Pub. L. 104–14, set out as a note preceding section 21 of Title 2, The Congress. Committee on Banking and Financial Services of House of Representatives abolished and replaced by Committee on Financial Services of House of Representatives, and jurisdiction over matters relating to securities and exchanges and insurance generally transferred from Committee on Energy and Commerce of House of Representatives by House Resolution No. 5, One Hundred Seventh Congress, Jan. 3, 2001.

¹ So in original. Probably should not be capitalized.