(a) Establishment

(1) In general

There is established the Federal Housing Finance Board, which shall succeed to the authority of the Federal Home Loan Bank Board with respect to the Federal Home Loan Banks.

(2) Status

The Board shall be an independent agency in the executive branch of the Government.

(3) Duties

(A) Safety and soundness

The primary duty of the Board shall be to ensure that the Federal Home Loan Banks operate in a financially safe and sound manner.

(B) Other duties

To the extent consistent with subparagraph (A), the duties of the Board shall also be -

(i)

to supervise the Federal Home Loan Banks;

(ii)

to ensure that the Federal Home Loan Banks carry out their housing finance mission; and

(iii)

to ensure that the Federal Home Loan Banks remain adequately capitalized and able to raise funds in the capital markets.

(b) Management

(1) In general

The management of the Board shall be vested in a Board of Directors consisting of 5 directors as follows:

(A)

The Secretary who shall serve without additional compensation.

(B)

Four citizens of the United States, appointed by the President, by and with the advice and consent of the Senate, each of whom shall hold office for a term of 7 years.

(2) Provisions relating to appointed directors

(A) In general

The directors appointed pursuant to paragraph (1)(B) shall be from among persons with extensive experience or training in housing finance or with a commitment to providing specialized housing credit. An appointed director shall not hold any other appointed office during his or her term as director. Not more than 3 directors shall be members of the same political party. Not more than 1 appointed director shall be from any single district of the Federal Home Loan Bank System. Nominations pursuant to this subparagraph shall be referred in the Senate to the Committee on Banking, Housing, and Urban Affairs.

(B) Consumer representative

At least 1 director shall be chosen from an organization with more than a 2-year history of representing consumer or community interests on banking services, credit needs, housing, or financial consumer protections.

(C) Limitations on conflicts of interest

No director may -

(i)

serve as a director or officer of any Federal Home Loan Bank or any member of any Bank; or

(ii)

hold shares of, or any other financial interest in, any member of any such Bank.

(D) Clarification of status

(i) In general

The directors appointed pursuant to paragraph (1)(B) shall serve on a full-time basis after December 31, 1993.

(ii) Rule of construction

Clause (i) shall not be construed as implying that any other position may be filled or held on a less than full-time basis.

(3) Initial terms

Notwithstanding paragraph (2), of the directors first appointed -

(A)

one shall be appointed for a term of 1 year;

(B)

one shall be appointed for a term of 3 years; and

(C)

one shall be appointed for a term of 5 years.

(c) Chairperson; transitional provisions

(1) In general

The President shall designate 1 of the appointed directors to be the Chairperson of the Board. The Chairperson shall designate another director to serve as Acting Chairperson during the absence or disability of the Chairperson.

(2) Transitional provision

Beginning on August 9, 1989, until such time that at least 2 directors are appointed and confirmed pursuant to subsection (b) of this section, the Secretary shall act for all purposes and with the full powers of the Board of Directors. The Secretary may utilize the services of employees from the Department of Housing and Urban Development to perform services for the Board of Directors during such transition period.

(d) Vacancies

(1) In general

Any vacancy on the Board of Directors shall be filled in the manner in which the original appointment was made. Any director appointed to fill a vacancy occurring before the expiration of the term for which such director's predecessor was appointed shall be appointed only for the remainder of such term. Each director may continue to serve until a successor has been appointed and qualified.

(2) The Secretary

In the event of a vacancy in the office of Secretary or during the absence or disability of the Secretary, the Acting Secretary shall act as a director in place of the Secretary