To protect the taxpayers of the United States by limiting the Federal payment of legal fees for current and former officers and affiliated parties of Fannie Mae and Freddie Mac.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``GSE Legal Fee Reduction Act of 2011''.
SEC. 2. LIMITATIONS ON INDEMNIFICATION OF LEGAL FEES.
(a) Limitations.--Section 1318 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4518) is amended by adding at the end the following new subsection: ``(f) Procedures for Advancement and Indemnification of Legal Fees.--The Director shall, by regulation, establish requirements prescribing the procedures and terms for advancement of amounts by an enterprise for qualified indemnification payments for the benefit of any entity-affiliated party, which shall provide as follows: ``(1) Determination of reasonable expenses.-- ``(A) Proposed criteria.--If at any time an enterprise is required, pursuant to law, regulation, order, bylaw, or agreement or contract, to make a qualified indemnification payment for the benefit of an entity-affiliated party, the Director shall require the enterprise to submit to the Director proposed criteria to be used in determining, at the time for the advancement of amounts for such payment, whether the liability or legal expenses for which such payment is to be made is reasonable, which shall include-- ``(i) methods and procedures for making such determinations; ``(ii) a process for review and appeal of...