"Yeah, sure, any suit filed gets uncontested and awarded to plaintiffs because FHFA using to DOJ to defend them violates HERA?"
You seem to be confusing duties of FHFA and duties of the Conservator. FHFA is, of course, entitled to defend themselves in suit. But Conservatorship is for the benefit of the Conservatee (ie: The Shareholders and GSEs). So, it would be ridiculous to say it is a Conservators duty to protect the Conservatee's from the Conservators violation of Conservatee rights.
"If defending Fannie Mae from litigation is not a duty of conservatorship then what is?"
Here you go!
(b) Powers and Duties of the Agency as Conservator or Receiver.--
``(1) Rulemaking authority of the agency.--
The <<NOTE: Regulations.>> Agency may prescribe such
regulations as the Agency determines to be appropriate regarding
the conduct of conservatorships or receiverships.
``(2) General powers.--
``(A) Successor to regulated entity.--The Agency
shall, as conservator or receiver, and by operation of
law, immediately succeed to--
``(i) all rights, titles, powers, and
privileges of the regulated entity, and of any
stockholder, officer, or director of such
regulated entity with respect to the regulated
entity and the assets of the regulated entity; and
``(ii) title to the books, records, and assets
of any other legal custodian of such regulated
entity.
``(B) Operate the regulated entity.--The Agency may,
as conservator or receiver--
``(i) take over the assets of and operate the
regulated entity with all the powers of the
shareholders, the directors, and the officers of
the regulated entity and conduct all business of
the regulated entity;
``(ii) collect all obligations and money due
the regulated entity;
``(iii) perform all functions of the regulated
entity in the name of the regulated entity which
are consistent with the appointment as conservator
or receiver;
``(iv) preserve and conserve the assets and
property of the regulated entity; and
``(v) provide by contract for assistance in
fulfilling any function, activity, action, or duty
of the Agency as conservator or receiver.
``(C) Functions of officers, directors, and
shareholders of a regulated entity.--The Agency may, by
regulation or order, provide for the exercise of any
function by any stockholder, director, or officer of any
regulated entity for which the Agency has been named
conservator or receiver.
``(D) Powers as conservator.--The Agency may, as
conservator, take such action as may be--
``(i) necessary to put the regulated entity in
a sound and solvent condition; and
``(ii) appropriate to carry on the business of
the regulated entity and preserve and conserve the
assets and property of the regulated entity.
``(E) Additional powers as receiver.--In any case in
which the Agency is acting as receiver, the Agency shall
place the regulated entity in liquidation and proceed to
realize upon the assets of the regulated entity in such
manner as the Agency deems appropriate, including
through the sale of assets, the transfer of assets to a
limited-life regulated entity established under
subsection (i), or the exercise of any other rights or
privileges granted to the Agency under this paragraph.
[[Page 122 STAT. 2738]]
``(F) Organization of new enterprise.--The Agency
may, as receiver for an enterprise, organize a successor
enterprise that will operate pursuant to subsection (i).
``(G) Transfer or sale of assets and liabilities.--
The Agency may, as conservator or receiver, transfer or
sell any asset or liability of the regulated entity in
default, and may do so without any approval, assignment,
or consent with respect to such transfer or sale.
``(H) Payment of valid obligations.--The Agency, as
conservator or receiver, shall, to the extent of
proceeds realized from the performance of contracts or
sale of the assets of a regulated entity, pay all valid
obligations of the regulated entity that are due and
payable at the time of the appointment of the Agency as
conservator or receiver, in accordance with the
prescriptions and limitations of this section.
``(I) Subpoena authority.--
``(i) In general.--
``(I) Agency authority.--The Agency
may, as conservator or receiver, and for
purposes of carrying out any power,
authority, or duty with respect to a
regulated entity (including determining
any claim against the regulated entity
and determining and realizing upon any
asset of any person in the course of
collecting money due the regulated
entity), exercise any power established
under section 1348.
``(II) Applicability of law.--The
provisions of section 1348 shall apply
with respect to the exercise of any
power under this subparagraph, in the
same manner as such provisions apply
under that section.
``(ii) Subpoena.--A subpoena or subpoena duces
tecum may be issued under clause (i) only by, or
with the written approval of, the Director, or the
designee of the Director.
``(iii) Rule of construction.--This subsection
shall not be construed to limit any rights that
the Agency, in any capacity, might otherwise have
under section 1317 or 1379B.
``(J) Incidental powers.--The Agency may, as
conservator or receiver--
``(i) exercise all powers and authorities
specifically granted to conservators or receivers,
respectively, under this section, and such
incidental powers as shall be necessary to carry
out such powers; and
``(ii) take any action authorized by this
section, which the Agency determines is in the
best interests of the regulated entity or the
Agency.
``(K) Other provisions.--
``(i) Shareholders and creditors of failed
regulated entity.--Notwithstanding any other
provision of law, the appointment of the Agency as
receiver for a regulated entity pursuant to
paragraph (2) or (4) of subsection (a) and its
succession, by operation of law, to the rights,
titles, powers, and privileges described in
subsection (b)(2)(A) shall terminate all
[[Page 122 STAT. 2739]]
rights and claims that the stockholders and
creditors of the regulated entity may have against
the assets or charter of the regulated entity or
the Agency arising as a result of their status as
stockholders or creditors, except for their right
to payment, resolution, or other satisfaction of
their claims, as permitted under subsections
(b)(9), (c), and (e).
``(ii) Assets of regulated entity.--
Notwithstanding any other provision of law, for
purposes of this section, the charter of a
regulated entity shall not be considered an asset
of the regulated entity.
``(3) Authority of receiver to determine claims.--
``(A) In general.--The Agency may, as receiver,
determine claims in accordance with the requirements of
this subsection and any regulations prescribed under
paragraph (4).
``(B) Notice requirements.--
The <<NOTE: Publication. Deadline.>> receiver, in any
case involving the liquidation or winding up of the
affairs of a closed regulated entity, shall--
``(i) promptly publish a notice to the
creditors of the regulated entity to present their
claims, together with proof, to the receiver by a
date specified in the notice which shall be not
less than 90 days after the date of publication of
such notice; and
``(ii) republish such notice approximately 1
month and 2 months, respectively, after the date
of publication under clause (i).
``(C) Mailing required.--The <<NOTE: Notice.>>
receiver shall mail a notice similar to the notice
published under subparagraph (B)(i) at the time of such
publication to any creditor shown on the books of the
regulated entity--
``(i) at the last address of the creditor
appearing in such books; or
``(ii) upon <<NOTE: Deadline.>> discovery of
the name and address of a claimant not appearing
on the books of the regulated entity, within 30
days after the discovery of such name and address.
``(4) Rulemaking authority relating to determination of
claims.--Subject to subsection (c), the Director may prescribe
regulations regarding the allowance or disallowance of claims by
the receiver and providing for administrative determination of
claims and review of such determination.
``(5) Procedures for determination of claims.--
``(A) Determination period.--
``(i) In general.--
Before <<NOTE: Deadline. Notification.>> the end
of the 180-day period beginning on the date on
which any claim against a regulated entity is
filed with the Agency as receiver, the Agency
shall determine whether to allow or disallow the
claim and shall notify the claimant of any
determination with respect to such claim.
``(ii) Extension of time.--The period
described in clause (i) may be extended by a
written agreement between the claimant and the
Agency.
``(iii) Mailing of notice sufficient.--The
requirements of clause (i) shall be deemed to be
satisfied if the notice of any determination with
respect to any
[[Page 122 STAT. 2740]]
claim is mailed to the last address of the
claimant which appears--
``(I) on the books of the regulated
entity;
``(II) in the claim filed by the
claimant; or
``(III) in documents submitted in
proof of the claim.
``(iv) Contents of notice of disallowance.--If
any claim filed under clause (i) is disallowed,
the notice to the claimant shall contain--
``(I) a statement of each reason for
the disallowance; and
``(II) the procedures available for
obtaining agency review of the
determination to disallow the claim or
judicial determination of the claim.
``(B) Allowance of proven claim.--The receiver shall
allow any claim received on or before the date specified
in the notice published under paragraph (3)(B)(i) by the
receiver from any claimant which is proved to the
satisfaction of the receiver.
``(C) Disallowance of claims filed after filing
period.--Claims filed after the date specified in the
notice published under paragraph (3)(B)(i), or the date
specified under paragraph (3)(C), shall be disallowed
and such disallowance shall be final.
``(D) Authority to disallow claims.--
``(i) In general.--The receiver may disallow
any portion of any claim by a creditor or claim of
security, preference, or priority which is not
proved to the satisfaction of the receiver.
``(ii) Payments to less than fully secured
creditors.--In the case of a claim of a creditor
against a regulated entity which is secured by any
property or other asset of such regulated entity,
the receiver--
``(I) may treat the portion of such
claim which exceeds an amount equal to
the fair market value of such property
or other asset as an unsecured claim
against the regulated entity; and
``(II) may not make any payment with
respect to such unsecured portion of the
claim, other than in connection with the
disposition of all claims of unsecured
creditors of the regulated entity.
``(iii) Exceptions.--No provision of this
paragraph shall apply with respect to--
``(I) any extension of credit from
any Federal Reserve Bank, Federal Home
Loan Bank, or the United States
Treasury; or
``(II) any security interest in the
assets of the regulated entity securing
any such extension of credit.
``(E) No judicial review of determination pursuant
to subparagraph (d).--No court may review the
determination of the Agency under subparagraph (D) to
disallow a claim.
``(F) Legal effect of filing.--
``(i) Statute of limitation tolled.--For
purposes of any applicable statute of limitations,
the filing of
[[Page 122 STAT. 2741]]
a claim with the receiver shall constitute a
commencement of an action.
``(ii) No prejudice to other actions.--Subject
to paragraph (10), the filing of a claim with the
receiver shall not prejudice any right of the
claimant to continue any action which was filed
before the date of the appointment of the
receiver, subject to the determination of claims
by the receiver.
``(6) Provision for judicial determination of claims.--
``(A) In general.--The <<NOTE: Deadline.>> claimant
may file suit on a claim (or continue an action
commenced before the appointment of the receiver) in the
district or territorial court of the United States for
the district within which the principal place of
business of the regulated entity is located or the
United States District Court for the District of
Columbia (and such court shall have jurisdiction to hear
such claim), before the end of the 60-day period
beginning on the earlier of--
``(i) the end of the period described in
paragraph (5)(A)(i) with respect to any claim
against a regulated entity for which the Agency is
receiver; or
``(ii) the date of any notice of disallowance
of such claim pursuant to paragraph (5)(A)(i).
``(B) Statute of limitations.--A claim shall be
deemed to be disallowed (other than any portion of such
claim which was allowed by the receiver), and such
disallowance shall be final, and the claimant shall have
no further rights or remedies with respect to such
claim, if the claimant fails, before the end of the 60-
day period described under subparagraph (A), to file
suit on such claim (or continue an action commenced
before the appointment of the receiver).
``(7) Review of claims.--
``(A) Other review procedures.--
``(i) In general.--The Agency shall establish
such alternative dispute resolution processes as
may be appropriate for the resolution of claims
filed under paragraph (5)(A)(i).
``(ii) Criteria.--In establishing alternative
dispute resolution processes, the Agency shall
strive for procedures which are expeditious, fair,
independent, and low cost.
``(iii) Voluntary binding or nonbinding
procedures.--The Agency may establish both binding
and nonbinding processes under this subparagraph,
which may be conducted by any government or
private party. All parties, including the claimant
and the Agency, must agree to the use of the
process in a particular case.
``(B) Consideration of incentives.--The Agency shall
seek to develop incentives for claimants to participate
in the alternative dispute resolution process.
``(8) Expedited determination of claims.--
``(A) Establishment required.--
The <<NOTE: Procedures.>> Agency shall establish a
procedure for expedited relief outside of the routine
claims process established under paragraph (5) for
claimants who--
[[Page 122 STAT. 2742]]
``(i) allege the existence of legally valid
and enforceable or perfected security interests in
assets of any regulated entity for which the
Agency has been appointed receiver; and
``(ii) allege that irreparable injury will
occur if the routine claims procedure is followed.
``(B) Determination period.--
Before <<NOTE: Deadline.>> the end of the 90-day period
beginning on the date on which any claim is filed in
accordance with the procedures established under
subparagraph (A), the Director shall--
``(i) determine--
``(I) whether to allow or disallow
such claim; or
``(II) whether such claim should be
determined pursuant to the procedures
established under paragraph (5); and
``(ii) <<NOTE: Notification.>> notify the
claimant of the determination, and if the claim is
disallowed, provide a statement of each reason for
the disallowance and the procedure for obtaining
agency review or judicial determination.
``(C) Period for filing or renewing suit.--Any
claimant who files a request for expedited relief shall
be permitted to file a suit, or to continue a suit filed
before the date of appointment of the receiver, seeking
a determination of the rights of the claimant with
respect to such security interest after the earlier of--
``(i) the end of the 90-day period beginning
on the date of the filing of a request for
expedited relief; or
``(ii) the date on which the Agency denies the
claim.
``(D) Statute of limitations.--
If <<NOTE: Deadline.>> an action described under
subparagraph (C) is not filed, or the motion to renew a
previously filed suit is not made, before the end of the
30-day period beginning on the date on which such action
or motion may be filed under subparagraph (B), the claim
shall be deemed to be disallowed as of the end of such
period (other than any portion of such claim which was
allowed by the receiver), such disallowance shall be
final, and the claimant shall have no further rights or
remedies with respect to such claim.
``(E) Legal effect of filing.--
``(i) Statute of limitation tolled.--For
purposes of any applicable statute of limitations,
the filing of a claim with the receiver shall
constitute a commencement of an action.
``(ii) No prejudice to other actions.--Subject
to paragraph (10), the filing of a claim with the
receiver shall not prejudice any right of the
claimant to continue any action that was filed
before the appointment of the receiver, subject to
the determination of claims by the receiver.
``(9) Payment of claims.--
``(A) In general.--The receiver may, in the
discretion of the receiver, and to the extent that funds
are available from the assets of the regulated entity,
pay creditor claims, in such manner and amounts as are
authorized under this section, which are--
[[Page 122 STAT. 2743]]
``(i) allowed by the receiver;
``(ii) approved by the Agency pursuant to a
final determination pursuant to paragraph (7) or
(8); or
``(iii) determined by the final judgment of
any court of competent jurisdiction.
``(B) Agreements against the interest of the
agency.--No agreement that tends to diminish or defeat
the interest of the Agency in any asset acquired by the
Agency as receiver under this section shall be valid
against the Agency unless such agreement is in writing
and executed by an authorized officer or representative
of the regulated entity.
``(C) Payment of dividends on claims.--The receiver
may, in the sole discretion of the receiver, pay from
the assets of the regulated entity dividends on proved
claims at any time, and no liability shall attach to the
Agency by reason of any such payment, for failure to pay
dividends to a claimant whose claim is not proved at the
time of any such payment.
``(D) Rulemaking authority of the director.--The
Director may prescribe such rules, including definitions
of terms, as the Director deems appropriate to establish
a single uniform interest rate for, or to make payments
of post-insolvency interest to creditors holding proven
claims against the receivership estates of the regulated
entity, following satisfaction by the receiver of the
principal amount of all creditor claims.
``(10) Suspension of legal actions.--
``(A) In general.--After the appointment of a
conservator or receiver for a regulated entity, the
conservator or receiver may, in any judicial action or
proceeding to which such regulated entity is or becomes
a party, request a stay for a period not to exceed--
``(i) 45 days, in the case of any conservator;
and
``(ii) 90 days, in the case of any receiver.
``(B) Grant of stay by all courts required.--Upon
receipt of a request by the conservator or receiver
under subparagraph (A) for a stay of any judicial action
or proceeding in any court with jurisdiction of such
action or proceeding, the court shall grant such stay as
to all parties.
``(11) Additional rights and duties.--
``(A) Prior final adjudication.--The Agency shall
abide by any final unappealable judgment of any court of
competent jurisdiction which was rendered before the
appointment of the Agency as conservator or receiver.
``(B) Rights and remedies of conservator or
receiver.--In the event of any appealable judgment, the
Agency as conservator or receiver--
``(i) shall have all of the rights and
remedies available to the regulated entity (before
the appointment of such conservator or receiver)
and the Agency, including removal to Federal court
and all appellate rights; and
``(ii) shall not be required to post any bond
in order to pursue such remedies.
``(C) No attachment or execution.--No attachment or
execution may issue by any court upon assets in the
[[Page 122 STAT. 2744]]
possession of the receiver, or upon the charter, of a
regulated entity for which the Agency has been appointed
receiver.
``(D) Limitation on judicial review.--Except as
otherwise provided in this subsection, no court shall
have jurisdiction over--
``(i) any claim or action for payment from, or
any action seeking a determination of rights with
respect to, the assets or charter of any regulated
entity for which the Agency has been appointed
receiver; or
``(ii) any claim relating to any act or
omission of such regulated entity or the Agency as
receiver.
``(E) Disposition of assets.--In exercising any
right, power, privilege, or authority as conservator or
receiver in connection with any sale or disposition of
assets of a regulated entity for which the Agency has
been appointed conservator or receiver, the Agency shall
conduct its operations in a manner which--
``(i) maximizes the net present value return
from the sale or disposition of such assets;
``(ii) minimizes the amount of any loss
realized in the resolution of cases; and
``(iii) ensures adequate competition and fair
and consistent treatment of offerors.
``(12) Statute of limitations for actions brought by
conservator or receiver.--
``(A) In general.--Notwithstanding any provision of
any contract, the applicable statute of limitations with
regard to any action brought by the Agency as
conservator or receiver shall be--
``(i) in the case of any contract claim, the
longer of--
``(I) the 6-year period beginning on
the date on which the claim accrues; or
``(II) the period applicable under
State law; and
``(ii) in the case of any tort claim, the
longer of--
``(I) the 3-year period beginning on
the date on which the claim accrues; or
``(II) the period applicable under
State law.
``(B) Determination of the date on which a claim
accrues.--For <<NOTE: Effective date.>> purposes of
subparagraph (A), the date on which the statute of
limitations begins to run on any claim described in such
subparagraph shall be the later of--
``(i) the date of the appointment of the
Agency as conservator or receiver; or
``(ii) the date on which the cause of action
accrues.
``(13) Revival of expired state causes of action.--
``(A) In general.--In the case of any tort claim
described under clause (ii) for which the statute of
limitations applicable under State law with respect to
such claim has expired not more than 5 years before the
appointment of the Agency as conservator or receiver,
the Agency may bring an action as conservator or
receiver on such claim without regard to the expiration
of the statute of limitations applicable under State
law.
[[Page 122 STAT. 2745]]
``(B) Claims described.--A tort claim referred to
under clause (i) is a claim arising from fraud,
intentional misconduct resulting in unjust enrichment,
or intentional misconduct resulting in substantial loss
to the regulated entity.
``(14) Accounting and recordkeeping requirements.--
``(A) In general.--The Agency as conservator or
receiver shall, consistent with the accounting and
reporting practices and procedures established by the
Agency, maintain a full accounting of each
conservatorship and receivership or other disposition of
a regulated entity in default.
``(B) Annual accounting or report.--With respect to
each conservatorship or receivership, the Agency shall
make an annual accounting or report available to the
Board, the Comptroller General of the United States, the
Committee on Banking, Housing, and Urban Affairs of the
Senate, and the Committee on Financial Services of the
House of Representatives.
``(C) Availability of reports.--Any report prepared
under subparagraph (B) shall be made available by the
Agency upon request to any shareholder of a regulated
entity or any member of the public.
``(D) Recordkeeping requirement.--After the end of
the 6-year period beginning on the date on which the
conservatorship or receivership is terminated by the
Director, the Agency may destroy any records of such
regulated entity which the Agency, in the discretion of
the Agency, determines to be unnecessary, unless
directed not to do so by a court of competent
jurisdiction or governmental agency, or prohibited by
law.
``(15) Fraudulent transfers.--
``(A) In general.--The Agency, as conservator or
receiver, may avoid a transfer of any interest of an
entity-affiliated party, or any person determined by the
conservator or receiver to be a debtor of the regulated
entity, in property, or any obligation incurred by such
party or person, that was made within 5 years of the
date on which the Agency was appointed conservator or
receiver, if such party or person voluntarily or
involuntarily made such transfer or incurred such
liability with the intent to hinder, delay, or defraud
the regulated entity, the Agency, the conservator, or
receiver.
``(B) Right of recovery.--To the extent a transfer
is avoided under subparagraph (A), the conservator or
receiver may recover, for the benefit of the regulated
entity, the property transferred, or, if a court so
orders, the value of such property (at the time of such
transfer) from--
``(i) the initial transferee of such transfer
or the entity-affiliated party or person for whose
benefit such transfer was made; or
``(ii) any immediate or mediate transferee of
any such initial transferee.
``(C) Rights of transferee or obligee.--The
conservator or receiver may not recover under
subparagraph (B) from--
``(i) any transferee that takes for value,
including satisfaction or securing of a present or
antecedent debt, in good faith; or
[[Page 122 STAT. 2746]]
``(ii) any immediate or mediate good faith
transferee of such transferee.
``(D) Rights under this paragraph.--The rights under
this paragraph of the conservator or receiver described
under subparagraph (A) shall be superior to any rights
of a trustee or any other party (other than any party
which is a Federal agency) under title 11, United States
Code.
``(16) Attachment of assets and other injunctive relief.--
Subject to paragraph (17), any court of competent jurisdiction
may, at the request of the conservator or receiver, issue an
order in accordance with rule 65 of the Federal Rules of Civil
Procedure, including an order placing the assets of any person
designated by the conservator or receiver under the control of
the court, and appointing a trustee to hold such assets.
``(17) Standards of proof.--Rule <<NOTE: Applicability.>>
65 of the Federal Rules of Civil Procedure shall apply with
respect to any proceeding under paragraph (16) without regard to
the requirement of such rule that the applicant show that the
injury, loss, or damage is irreparable and immediate.
``(18) Treatment of claims arising from breach of contracts
executed by the conservator or receiver.--
``(A) In general.--Notwithstanding any other
provision of this subsection, any final and unappealable
judgment for monetary damages entered against the
conservator or receiver for the breach of an agreement
executed or approved in writing by the conservator or
receiver after the date of its appointment, shall be
paid as an administrative expense of the conservator or
receiver.
``(B) No limitation of power.--Nothing in this
paragraph shall be construed to limit the power of the
conservator or receiver to exercise any rights under
contract or law, including to terminate, breach, cancel,
or otherwise discontinue such agreement.
``(19) General exceptions.--
``(A) Limitations.--The rights of the conservator or
receiver appointed under this section shall be subject
to the limitations on the powers of a receiver under
sections 402 through 407 of the Federal Deposit
Insurance Corporation Improvement Act of 1991 (12 U.S.C.
4402 through 4407).
``(B) Mortgages held in trust.--
``(i) In general.--Any mortgage, pool of
mortgages, or interest in a pool of mortgages held
in trust, custodial, or agency capacity by a
regulated entity for the benefit of any person
other than the regulated entity shall not be
available to satisfy the claims of creditors
generally, except that nothing in this clause
shall be construed to expand or otherwise affect
the authority of any regulated entity.
``(ii) Holding of mortgages.--Any mortgage,
pool of mortgages, or interest in a pool of
mortgages described in clause (i) shall be held by
the conservator or receiver appointed under this
section for the beneficial owners of such
mortgage, pool of mortgages, or interest in
accordance with the terms of the agreement
[[Page 122 STAT. 2747]]
creating such trust, custodial, or other agency
arrangement.
``(iii) Liability of conservator or
receiver.--The liability of the conservator or
receiver appointed under this section for damages
shall, in the case of any contingent or
unliquidated claim relating to the mortgages held
in trust, be estimated in accordance with the
regulations of the Director.
