2003 Committee Charter : FRE

No: FHLMC 200 1-
Date: May 3 , 200
WHEREAS, the Board of Directors (the "Board") of the Federal Home Loan Mortgage Corporation
Freddie Mac ) has previously determined that it is in the best interest of the Board to have certain
committees to perform particular functions and otherwise assist the Board and has created such
committees from time to time;
WHEREAS, pursuant to Resolution FHLMC 92- , the Board created a Finance Committee, and has
amended and restated its charter pursuant to Resolutions FHLMC 95- 12 and FHLMC 97- 11;
WHEREAS, pursuant to Resolution FHLMC 98- , the Board changed the name of the Finance
Committee to the Finance and Technology Committee and amended and restated its charter which was
further amended and restated pursuant to Resolution FHLMC 98-43;
WHEREAS, the Board has determined that it is in the best interests of Freddie Mac to align its oversight
of Freddie Mac s technology initiatives with its oversight of related business processes where appropriate;
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WHEREAS, the Board has detemrined that it is in the best interests of Freddie Mac that certain changes
be made to the charter of the Finance and Technology Committee to include oversight of certain matters
previously delegated to the Securitization and Investment Committees, to rename the Finance and
Technology Committee the "Finance Committee" and to restate its charter for convenience of use; and
WHEREAS, for the purposes of this Resolution
(1) the ten11 "Mortgages" means any residential mortgages (including interests therein) that Freddie Mac
, or becomes, authorized to pUrchase pursuant to the Federal Home Loan Mortgage Corporation
(2) the term "Mortgage-Related Securities" means any securities, whether single-class or multiclass and
whether or not representing evidence of indebtedness, that are secured by, or the payments on which
are either derived from, or determined wholly or in substantial part by reference to payments on
specified Mortgages or other I\10rtgage-Related Securities, which other Mortgage~Related Securities
include, without limitation, single-family and multifamily Mortgage Participation Certificates
(Guaranteed), Giant and other Pass-Through Certificates (Guaranteed), Multiclass Mortgage
Participation Certificates (Guaranteed), Funding Note Pass Through Certificates (Guaranteed),
Collateralized Mortgage Obligations and Mortgage Cash Flow Obligations similar to those
heretofore created, issued, guaranteed, sold, exchanged, retained, purchased, repurchased and/or
resold by Freddie Mac.
(3) the term "New Securities Transaction" means any transaction relating to Mortgage-Related
Securities that involves a significant increase in the credit, interest-rate or operational risks to Freddie
Mac; and
(4) The term "Transaction" means any transaction to hold, deal with, sell or otherwise dispose of
Mortgages and/or create, issue, guarantee, sell and exchange or otherwise deal with Mortgage-
Related S ecuri ti es.
Resolu tion
Finance Committee
Page 2
NOW, THEREFORE, BE IT RESOLVED that the continued ~xistence of the, Finance and Technology
Comn1ittee of the Board, consisting of such members of the Board as shall be designated by the Board, is hereby reaffmned.
BE IT FURTHER RESOLVED that the name of the Conllnittee is hereby changed to L1.e Finance
Committee (the "Committee ) and the Con1111ittee is hereby charged with the following authority:
With respect to Freddie Mac s capital:
(a) to review and make recOlnmendations to the Board regarding changes in Freddie Mac s capital
structure (including, without limitation, issuances of common stock, preferred stock, any other
securities the proceeds of which qualify under applicable law for treatment as regulatory capital
of Freddie Mac, and any securities or other instnlments or transactions convertible into or
exchangeable for such securities; repurchases or redemptions of such stock or other instnlments;
stock splits; and related matters);
(b) to review and make recommendations to the Board regarding Freddie Mac s mmual dividend
policy and the declaration and payment of dividends;
(c) to review the techniques employed by Freddie Mac to manage and allocate its capital
(including, without limitation, internal stress tests and other related management information
and control systen1s);
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(d) to review reports on the establishment of major regulatory capital requirements applicable
Freddie Mac; and
( e) to review the implementation of ~egulatory capital requirements , the results of compliance with
such requirements and the inlplications of such requirements and capital allocations for Freddie
Mac s business activities,
With respect to activities relating to Freddie Mac s debt and Mortgage-Related Securities
(collectively referred to herein as "Funding
(a) to review Freddie Mac s Funding strategies, policies, programs , prodilcts and enhancements
thereto , and related marketing activities;.
(b) to review Funding perfonnance against appropriate benchmarks;
( c) to review Freddie Mac s competitive position in, and the liquidity of, the markets for its debt
and Mortgage-Related Securities; and
(d) to review the profitability of Funding activities.
With respect to Freddie Mac s Mortgage-Related Securities;
(a) to approve any single Transaction involving Mortgage-Related Securities having an aggregate
principal amount greater than $11 billion provided further that no such approval shall be
necessary if the Risk Committee has approved the same Transaction; and provided further that
Finance Committee
Page 3
any Transaction having an aggregate principal amount greater than $5 billion but less than or
equal to $11 billion need not be approved in advanc~ by the Committee but shall be reported to
the Committee at its next regularly scheduled meeting,
(b) to approve any single New Securities Transaction having an aggregate principal amount
greater than $1 billion provided that no such approval shall be necessary if the Risk
Con1IDittee has approved the S3111e Transaction.
To review investor relations activities relating to equity, debt and Mortgage-Related Securities
and their strategic implications.
To review the development and implementation of major new or redesigned business processes
(including management infom1ation and control systems) and related technological initiatives
associated with the business activities overseen by the Committee.
To perform such other duties as may be assigned from time to tin1e to the Committee by the Board
or requested by the ChaiD11an and Chief Executive Officer (the "CEO"
BE IT FURTHER RESOLVED that the approval of any offering of securities issued or guaranteed by
Freddie Mac or any subsidiary or affiliate of Freddie Mac pursuant to the AssetlLiability Management
Policy as set forth in Resolution FHLMC 99-25 as it may be amended from time to time (or any other
slinilar transaction) is not included in this Resolution because it has been delegated exclusively to the
Investment Committee pursuant to Resolution FHLMC 99-25.
BE IT FURTHER RESOLVED that Resolution FHLMC 98-43 is hereby superseded.
BE IT FURTHER RESOLVED that the minutes of the Cornmittee smeetings shall be submitted to the
BE IT FURTHER RESOLVED that the Board hereby ratifies all activities undertaken by the Committee
pursuant to its responsibilities as set forth herein and p~or to the adoption of the Resolution, including the
conduct of a meeting of the Committee held on even date herewith.
BE IT FURTHER RESOLVED that the Committee and the CEO, or any designee, each is authorized in
the name of, and on behalf of, Freddie Mac to take or cause to be taken any and all actions and to expend
such nmds as may be necessary or appropriate to carry out the intent and purposes of this Resolution.
Alan Hausman
Assistant Secretary