106 STAT. 3974 PUBLIC LAW 102-550—OCT. 28, 1992

(D) EFFECTIVE DATE.—The provisions of subparagraph
(B) shall become effective 4 years after regulations are
first issued under subsection (e).

(4) OTHER ACTIVITIES.—Losses or gains on other activities,
including interest rate and foreign exchange hedging activities,
shall be determined by the Director, on the basis of available
information, to be consistent with the stress period.

(b) CONSIDERATIONS.—

(1) IN GENERAL.—In establishing the risk-based capital test
under subsection (a), the Director shall take into account appro-
priate distinctions among types of mortgage products, dif-
ferences in seasoning of mortgages, and any other factors the
Director considers appropriate.

(2) CONSISTENCY.—Characteristics of the stress period
other than those specifically set forth in subsection (a), such
as prepayment experience and dividend policies, will be those
determined by the Director, on the basis of available informa-
tion, to be most consistent with the stress period.

(c) RISK-BASED CAPITAL LEVEL.—For purposes of this subtitle,
the risk-based capital level for an enterprise shall be equal to
the sum of the following amounts:

(1) CREDIT AND INTEREST RATE RISK.—The amount of total
capital determined by applying the risk-based capital test under
subsection (a) to the enterprise.

(2) MANAGEMENT AND OPERATIONS RISK.—To provide for
management and operations risk, 30 percent of tne amount
of total capital determined by applying the risk-based capital
test under subsection (a) to the enterprise.

(d) DEFINITIONS.—For purposes of this section:

(1) SEASONING.—The term "seasoning" means the change
over tune in the ratio of the unpaid principal balance of a
mortgage to the value of the property by which such mortgage
loan is secured, determined on an annual basis by region,
in accordance with the Constant Quality Home Price Index
published by the Secretary of Commerce (or any index of similar
quality, authority, and public availability that is regularly used
by the Federal Government).

(2) TYPE OF MORTGAGE PRODUCT.—The term "type of mort-
gage product" means a classification of one or more mortgage
products, as established by the Director, which have similar
characteristics from each set of characteristics under the follow-
ing subparagraphs:

(A) The property securing the mortgage is—

(i) a residential property consisting of 1 to 4 dwell-
ing units; or

(ii) a residential property consisting of more than
4 dwelling units.

(B) The interest rate on the mortgage is—

(i) fixed; or
(ii) adjustable.

(C) The priority of the lien securing the mortgage

(i) first; or

(ii) second or other.

(D) The term of the mortgage is—

(i) 1 to 15 years;
(ii) 16 to 30 years; or