--- kind: "range" citation: "12 U.S.C. §§ 1421–1449" title: "12" from: "1421" to: "1449" count: 46 release: "119-102" url: "https://uscodex.org/usc/12/1421..1449" --- # §1421. Short title This chapter may be cited as the “Federal Home Loan Bank Act.” # §1422. Definitions As used in this chapter— - (1) - (A) **Bank.—** The term “Federal Home Loan Bank” or “Bank” means a bank established under the authority of this chapter. - (B) **Bank system.—** The term “Federal Home Loan Bank System” means the [Federal Home Loan Banks](#1-A) under the supervision of the [Director](#11). - (2) **State.—** The term “State”, in addition to the States of the United States, [includes](/usc/12/25b.md?p=a-3) the District of Columbia, Guam, Puerto Rico, the United States Virgin Islands, American Samoa, and the Commonwealth of the Northern Mariana Islands. - (3) The term “member” means any institution which has subscribed for the stock of a [Federal Home Loan Bank](#1-A). - (4) The term “home mortgage loan” means a loan made by a [member](#3) upon the security of a [home mortgage](#5). - (5) The term “home mortgage” means a [mortgage](/usc/12/1707.md?p=a) upon [real estate](/usc/12/1715z–20.md?p=b-2), in fee simple, or on a leasehold (1) under a lease for not less than ninety-nine years which is renewable or (2) under a lease having a period of not less than fifty years to run from the date the [mortgage](/usc/12/1707.md?p=a) was executed, upon which is located, or which comprises or [includes](/usc/12/25b.md?p=a-3), one or more homes or other dwelling units, all of which may be defined by the [Director](#11) and shall include, in addition to [first mortgages](/usc/12/1707.md?p=a), such classes of first liens as are commonly given to secure advances on [real estate](/usc/12/1715z–20.md?p=b-2) by institutions authorized under this chapter to become [members](#3), under the laws of the [State](#2) in which the [real estate](/usc/12/1715z–20.md?p=b-2) is located, together with the [credit](/usc/12/5481.md?p=7) instruments, if any, secured thereby. - (6) The term “unpaid principal,” when used in respect of a loan secured by a [home mortgage](#5) means the principal thereof less the sum of (1) payments made on such principal, and (2) in cases where shares or stock are pledged as security for the loan, the payments made on such shares or stock plus earnings or dividends apportioned or credited thereon. - (7) An “amortized” or “installment” [home mortgage loan](#4) shall, for the purposes of this chapter, be a [home mortgage loan](#4) to be repaid or liquidated in not less than eight years by means of regular weekly, monthly, or quarterly payments made directly in reduction of the debt or upon stock or shares pledged as collateral for the repayment of such loan. - (8) **Savings association.—** The term “savings association” has the meaning given to such term in section 3 of the Federal [Deposit](/usc/12/5301.md?p=18-A) Insurance Act [[12 U.S.C. 1813](/usc/12/1813.md)]. - (9) **Insured depository institution.—** The term “insured depository institution” means— - (A) an [insured depository institution](#9) (as defined in section 3 of the Federal [Deposit](/usc/12/5301.md?p=18-A) Insurance Act [[12 U.S.C. 1813](/usc/12/1813.md)]), and - (B) except as used in [sections 1441a](/usc/12/1441a.md)[^1] and 1441b of this title, an [insured credit union](/usc/12/1829c.md?p=a-6) (as defined in [section 1752 of this title](/usc/12/1752.md)). - (10) **Community financial institution.—** - (A) **In general.—** The term “community financial institution” means a [member](#3)— - (i) the [deposits](/usc/12/5301.md?p=18-A) of which are insured under the Federal [Deposit](/usc/12/5301.md?p=18-A) Insurance Act [[12 U.S.C. 1811](/usc/12/1811.md) et seq.]; and - (ii) that has, as of the date of the transaction at issue, less than $1,000,000,000 in average total assets, based on an average of total assets over the 3 years preceding that date. - (B) **Adjustments.—** The $1,000,000,000 limit referred to in [subparagraph (A)(ii)](#10-A-ii) shall be adjusted annually by the [Director](#11), based on the annual percentage increase, if any, in the [Consumer](/usc/12/5481.md?p=4) Price Index for all urban [consumers](/usc/12/5481.md?p=4), as published by the Department of Labor. - (11) **Director.—** The term “Director” means the Director of the Federal Housing Finance [Agency](#12). - (12) **Agency.—** The term “Agency” means the Federal Housing Finance Agency, established under [section 4511 of this title](/usc/12/4511.md). # [§1422a. Repealed. Pub. L. 110–289, div. A, title II, § 1204(1), July 30, 2008, 122 Stat. 2785 — repealed] # [§1422b. Repealed. Pub. L. 110–289, div. A, title II, § 1204(1), July 30, 2008, 122 Stat. 2785 — repealed] # §1423. Federal Home Loan Bank districts; number and boundaries; establishment of Federal Home Loan Banks; names - (a) **In general—** As soon as practicable the [Director](/usc/12/1422.md?p=11) shall divide the continental United States, Puerto Rico, the Virgin Islands, Guam, and the Territories of Alaska and Hawaii into not less than eight nor more than twelve [districts](/usc/12/221a.md?p=a). Such [districts](/usc/12/221a.md?p=a) shall be apportioned with due regard to the convenience and customary course of business of the institutions eligible to and likely to subscribe for stock of a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) to be formed under this chapter, but no such [district](/usc/12/221a.md?p=a) shall contain a fractional part of any [State](/usc/12/1422.md?p=2). The [districts](/usc/12/221a.md?p=a) thus created may be readjusted and new [districts](/usc/12/221a.md?p=a) may from time to time be created by the [Director](/usc/12/1422.md?p=11), not to exceed twelve in all. Such [districts](/usc/12/221a.md?p=a) shall be known as [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) [districts](/usc/12/221a.md?p=a) and may be designated by number. As soon as practicable the [Director](/usc/12/1422.md?p=11) shall establish, in each [district](/usc/12/221a.md?p=a), a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) at such city as may be designated by the [Director](/usc/12/1422.md?p=11). Its title shall include the name of the city at which it is established. - (b) **Authority to reduce districts—** Notwithstanding [subsection (a)](#a), the number of [districts](/usc/12/221a.md?p=a) may be reduced to a number less than 8— - (1) pursuant to a voluntary merger between [Banks](/usc/12/221a.md?p=a), as approved pursuant to [section 1446(b) of this title](/usc/12/1446.md?p=b); or - (2) pursuant to a decision by the [Director](/usc/12/1422.md?p=11) to liquidate a [Bank](/usc/12/1422.md?p=1-A) pursuant to [section 4617 of this title](/usc/12/4617.md). # §1424. Eligibility for membership - (a) **Criteria for eligibility—** - (1) **In general—** Any building and loan [association](/usc/12/1828.md?p=s-4-E-i), savings and loan [association](/usc/12/1828.md?p=s-4-E-i), cooperative [bank](/usc/12/1422.md?p=1-A), homestead [association](/usc/12/1828.md?p=s-4-E-i), [insurance company](/usc/12/1841.md?p=q), savings [bank](/usc/12/1422.md?p=1-A), [community development financial institution](/usc/12/1834a.md?p=j-4), or any [insured depository institution](/usc/12/1422.md?p=9) (as defined in [section 1422 of this title](/usc/12/1422.md)), shall be eligible to become a [member](/usc/12/1422.md?p=3) of a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) if such institution— - (A) is duly organized under the laws of any [State](/usc/12/1422.md?p=2) or of the United States; - (B) is subject to inspection and regulation under the banking laws, or under similar laws, of the [State](/usc/12/1422.md?p=2) or of the United States or, in the case of a [community development financial institution](/usc/12/1834a.md?p=j-4), is certified as a [community development financial institution](/usc/12/1834a.md?p=j-4) under the Community Development Banking and Financial Institutions Act of 1994 [[12 U.S.C. 4701](/usc/12/4701.md) et seq.].;[^1] and - (C) makes such [home mortgage loans](/usc/12/1422.md?p=4) as, in the judgment of the [Director](/usc/12/1422.md?p=11), are long-term loans (except that in the case of a savings [bank](/usc/12/1422.md?p=1-A), this subparagraph applies only if, in the judgment of the [Director](/usc/12/1422.md?p=11), its time [deposits](/usc/12/5301.md?p=18-A), as defined in [section 461 of this title](/usc/12/461.md), warrant its making such loans). - (2) **Qualified thrift lender—** An [insured depository institution](/usc/12/1422.md?p=9) that is not a [member](/usc/12/1422.md?p=3) on January 1, 1989, may become a [member](/usc/12/1422.md?p=3) of a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) only if— - (A) the [insured depository institution](/usc/12/1422.md?p=9) (other than a [community financial institution](/usc/12/1422.md?p=10-A)) has at least 10 percent of its total assets in [residential mortgage](/usc/12/1717.md?p=b-7-A-ii) loans; - (B) the [insured depository institution](/usc/12/1422.md?p=9)’s financial condition is such that advances may be safely made to such institution; and - (C) the character of its management and its home-financing policy are consistent with sound and economical home financing. - (3) **Certain institutions—** An [insured depository institution](/usc/12/1422.md?p=9) commencing its initial business operations after January 1, 1989, may become a [member](/usc/12/1422.md?p=3) of a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) if it complies with regulations and orders prescribed by the [Director](/usc/12/1422.md?p=11) for the 10 percent asset requirement (described in the[^2] [paragraph (2)](#a-2)) within one year after the commencement of its operations. - (4) **Limited exemption for community financial institutions—** A [community financial institution](/usc/12/1422.md?p=10-A) that otherwise meets the requirements of [paragraph (2)](#a-2) may become a [member](/usc/12/1422.md?p=3) without regard to the percentage of its total assets that is represented by [residential mortgage](/usc/12/1717.md?p=b-7-A-ii) loans, as described in [subparagraph (A)](#a-2-A) of paragraph (2). - (5) **Certain privately insured credit unions—** - (A) **In general—** Subject to the requirements of [subparagraph (B)](#a-5-B), a [credit union](/usc/12/3423.md?p=a-1-E) shall be treated as an [insured depository institution](/usc/12/1422.md?p=9) for purposes of determining the eligibility of such [credit union](/usc/12/3423.md?p=a-1-E) for membership in a [Federal home loan bank](/usc/12/1422.md?p=1-A) under paragraphs [(1)](#a-1), [(2)](#a-2), and [(3)](#a-3). - (B) **Certification by appropriate supervisor—** - (i) **In general—** For purposes of this paragraph and subject to [clause (ii)](#a-5-B-ii), a [credit union](/usc/12/3423.md?p=a-1-E) which lacks Federal [deposit](/usc/12/5301.md?p=18-A) insurance and which has applied for membership in a [Federal home loan bank](/usc/12/1422.md?p=1-A) may be treated as meeting all the eligibility requirements for Federal [deposit](/usc/12/5301.md?p=18-A) insurance only if the appropriate supervisor of the [State](/usc/12/1422.md?p=2) in which the [credit union](/usc/12/3423.md?p=a-1-E) is chartered has determined that the [credit union](/usc/12/3423.md?p=a-1-E) meets all the eligibility requirements for Federal [deposit](/usc/12/5301.md?p=18-A) insurance as of the date of the application for membership. - (ii) **Certification deemed valid—** If, in the case of any [credit union](/usc/12/3423.md?p=a-1-E) to which [clause (i)](#a-5-B-i) applies, the appropriate supervisor of the [State](/usc/12/1422.md?p=2) in which such [credit union](/usc/12/3423.md?p=a-1-E) is chartered fails to make a determination pursuant to such clause by the end of the 6-month period beginning on the date of the application, the [credit union](/usc/12/3423.md?p=a-1-E) shall be deemed to have met the requirements of [clause (i)](#a-5-B-i). - (C) **Security interests of Federal home loan bank not avoidable—** Notwithstanding any provision of [State](/usc/12/1422.md?p=2) law authorizing a conservator or liquidating agent of a [credit union](/usc/12/3423.md?p=a-1-E) to repudiate contracts, no such provision shall apply with respect to— - (i) any [extension of credit](/usc/12/1843.md?p=c-14-F-iv) from any [Federal home loan bank](/usc/12/1422.md?p=1-A) to any [credit union](/usc/12/3423.md?p=a-1-E) which is a [member](/usc/12/1422.md?p=3) of any such [bank](/usc/12/1422.md?p=1-A) pursuant to this paragraph; or - (ii) any security interest in the assets of such [credit union](/usc/12/3423.md?p=a-1-E) securing any such [extension of credit](/usc/12/1843.md?p=c-14-F-iv). - (D) **Protection for certain Federal home loan bank advances—** Notwithstanding any [State](/usc/12/1422.md?p=2) law to the contrary, if a [Bank](/usc/12/1422.md?p=1-A) makes an advance under [section 1430 of this title](/usc/12/1430.md) to a [State](/usc/12/1422.md?p=2)-chartered [credit union](/usc/12/3423.md?p=a-1-E) that is not federally insured— - (i) the [Bank](/usc/12/1422.md?p=1-A)’s interest in any collateral securing such advance has the same priority and is afforded the same standing and rights that the security interest would have had if the advance had been made to a federally [insured credit union](/usc/12/1829c.md?p=a-6); and - (ii) the [Bank](/usc/12/1422.md?p=1-A) has the same right to access such collateral that the [Bank](/usc/12/1422.md?p=1-A) would have had if the advance had been made to a federally [insured credit union](/usc/12/1829c.md?p=a-6). - (b) **Location requirement—** An institution eligible to become a [member](/usc/12/1422.md?p=3) under this section may become a [member](/usc/12/1422.md?p=3) only of, or secure advances from, the [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of the [district](/usc/12/221a.md?p=a) in which is located the institution’s principal place of business, or of the [bank](/usc/12/1422.md?p=1-A) of a [district](/usc/12/221a.md?p=a) adjoining such [district](/usc/12/221a.md?p=a), if demanded by convenience and then only with the approval of the [Director](/usc/12/1422.md?p=11). - (c) **Inspection and regulation requirements—** Notwithstanding the provisions of [clause (2)](#a-2) of subsection (a) of this section requiring inspection and regulation under law as a condition with respect to eligibility for membership, any building and loan [association](/usc/12/1828.md?p=s-4-E-i) which would be eligible to become a [member](/usc/12/1422.md?p=3) of a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) except for the fact that it is not subject to inspection and regulation under the banking laws or similar laws of the [State](/usc/12/1422.md?p=2) in which such [association](/usc/12/1828.md?p=s-4-E-i) is organized shall, upon subjecting itself to such inspection and regulation as the [Director](/usc/12/1422.md?p=11) shall prescribe, be eligible to become a [member](/usc/12/1422.md?p=3). # [§§1425 to 1425b. Repealed. Pub. L. 101–73, title VII, §§ 705, 716, 720, Aug. 9, 1989, 103 Stat. 416, 421, 423 — repealed] # §1426. Capital structure of Federal home loan banks - (a) **Regulations—** - (1) **Capital standards—** Not later than 18 months after November 12, 1999, the [Director](/usc/12/1422.md?p=11) shall issue regulations prescribing uniform [capital standards](/usc/12/1835.md?p=i-3) applicable to each [Federal home loan bank](/usc/12/1422.md?p=1-A), which shall require each such [bank](/usc/12/1422.md?p=1-A) to meet— - (A) the leverage requirement specified in [paragraph (2)](#a-2); and - (B) the risk-based [capital](/usc/12/51c.md) requirements, in accordance with [paragraph (3)](#a-3). - (2) **Leverage requirement—** - (A) **In general—** The leverage requirement shall require each [Federal home loan bank](/usc/12/1422.md?p=1-A) to maintain a minimum amount of total [capital](/usc/12/51c.md) based on the total assets of the [bank](/usc/12/1422.md?p=1-A) and shall be 5 percent. - (B) **Treatment of stock and retained earnings—** In determining compliance with the minimum leverage ratio established under [subparagraph (A)](#a-2-A), the paid-in value of the outstanding Class B stock and the amount of retained earnings shall be multiplied by 1.5, and such higher amounts shall be deemed to be [capital](/usc/12/51c.md) for purposes of meeting the 5 percent minimum leverage ratio, except that a [Federal home loan bank](/usc/12/1422.md?p=1-A)’s total [capital](/usc/12/51c.md) (determined without taking into account any such multiplier) shall not be less than 4 percent of the total assets of the [bank](/usc/12/1422.md?p=1-A). - (3) **Risk-based capital standards—** - (A) **Risk-based capital standards—** The [Director](/usc/12/1422.md?p=11) shall, by regulation, establish risk-based [capital standards](/usc/12/1835.md?p=i-3) for the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) to ensure that the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) operate in a safe and sound manner, with sufficient permanent [capital](/usc/12/51c.md) and reserves to support the risks that arise in the operations and management of the Federal Home Loans [Banks](/usc/12/221a.md?p=a). - (B) **Consideration of other risk-based standards—** In establishing the risk-based standard under [subparagraph (A)](#a-3-A), the [Director](/usc/12/1422.md?p=11) shall take due consideration of any risk-based [capital](/usc/12/51c.md) test established pursuant to section 1361 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 ([12 U.S.C. 4611](/usc/12/4611.md)) for the enterprises (as defined in that Act [[12 U.S.C. 4501](/usc/12/4501.md) et seq.]), with such modifications as the [Director](/usc/12/1422.md?p=11) determines to be appropriate to reflect differences in operations between the [Federal home loan banks](/usc/12/1422.md?p=1-A) and those enterprises. - (4) **Other regulatory requirements—** The regulations issued by the [Director](/usc/12/1422.md?p=11) under [paragraph (1)](#a-1) shall— - (A) permit each [Federal home loan bank](/usc/12/1422.md?p=1-A) to issue, with such rights, terms, and preferences, not inconsistent with this chapter and the regulations issued hereunder, as the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) of that [bank](/usc/12/1422.md?p=1-A) may approve, any 1 or more of— - (i) Class A stock, which shall be redeemable in cash and at par 6 months following submission by a [member](/usc/12/1422.md?p=3) of a written notice of its intent to redeem such shares; and - (ii) Class B stock, which shall be redeemable in cash and at par 5 years following submission by a [member](/usc/12/1422.md?p=3) of a written notice of its intent to redeem such shares; - (B) provide that the stock of a [Federal home loan bank](/usc/12/1422.md?p=1-A) may be issued to and held by only [members](/usc/12/1422.md?p=3) of the [bank](/usc/12/1422.md?p=1-A), and that a [bank](/usc/12/1422.md?p=1-A) may not issue any stock other than as provided in this section; - (C) prescribe the manner in which stock of a [Federal home loan bank](/usc/12/1422.md?p=1-A) may be sold, transferred, redeemed, or repurchased; and - (D) provide the manner of disposition of outstanding stock held by, and the liquidation of any claims of the [Federal home loan bank](/usc/12/1422.md?p=1-A) against, an institution that ceases to be a [member](/usc/12/1422.md?p=3) of the [bank](/usc/12/1422.md?p=1-A), through merger or otherwise, or that provides notice of intention to withdraw from membership in the [bank](/usc/12/1422.md?p=1-A). - (5) **Definitions of capital—** For purposes of determining compliance with the [capital standards](/usc/12/1835.md?p=i-3) established under this subsection— - (A) permanent [capital](/usc/12/51c.md) of a [Federal home loan bank](/usc/12/1422.md?p=1-A) shall include— - (i) the amounts paid for the Class B stock; and - (ii) the retained earnings of the [bank](/usc/12/1422.md?p=1-A) (as determined in accordance with generally accepted accounting principles); and - (B) total [capital](/usc/12/51c.md) of a [Federal home loan bank](/usc/12/1422.md?p=1-A) shall include— - (i) permanent [capital](/usc/12/51c.md); - (ii) the amounts paid for the Class A stock; - (iii) consistent with generally accepted accounting principles, and subject to the regulation of the [Director](/usc/12/1422.md?p=11), a general allowance for losses, which may not include any reserves or allowances made or held against specific assets; and - (iv) any other amounts from sources available to absorb losses incurred by the [bank](/usc/12/1422.md?p=1-A) that the [Director](/usc/12/1422.md?p=11) determines by regulation to be appropriate to include in determining total [capital](/usc/12/51c.md). - (6) **Transition period—** Notwithstanding any other provision of this chapter, the requirements relating to purchase and retention of [capital stock](/usc/12/51c.md) of a [Federal home loan bank](/usc/12/1422.md?p=1-A) by any [member](/usc/12/1422.md?p=3) thereof in effect on the day before November 12, 1999, shall continue in effect with respect to each [Federal home loan bank](/usc/12/1422.md?p=1-A) until the regulations required by this subsection have taken effect and the [capital](/usc/12/51c.md) structure plan required by [subsection (b)](#b) has been approved by the [Director](/usc/12/1422.md?p=11) and implemented by such [bank](/usc/12/1422.md?p=1-A). - (b) **Capital structure plan—** - (1) **Approval of plans—** Not later than 270 days after the date of publication by the [Director](/usc/12/1422.md?p=11) of final regulations in accordance with [subsection (a)](#a), the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) of each [Federal home loan bank](/usc/12/1422.md?p=1-A) shall submit for approval by the [Director](/usc/12/1422.md?p=11) a plan establishing and implementing a [capital](/usc/12/51c.md) structure for such [bank](/usc/12/1422.md?p=1-A) that— - (A) the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) determines is best suited for the condition and operation of the [bank](/usc/12/1422.md?p=1-A) and the interests of the [members](/usc/12/1422.md?p=3) of the [bank](/usc/12/1422.md?p=1-A); - (B) meets the requirements of [subsection (c)](#c); and - (C) meets the minimum [capital standards](/usc/12/1835.md?p=i-3) and requirements established under [subsection (a)](#a) and other regulations prescribed by the [Director](/usc/12/1422.md?p=11). - (2) **Approval of modifications—** The [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) of a [Federal home loan bank](/usc/12/1422.md?p=1-A) shall submit to the [Director](/usc/12/1422.md?p=11) for approval any modifications that the [bank](/usc/12/1422.md?p=1-A) proposes to make to an approved [capital](/usc/12/51c.md) structure plan. - (c) **Contents of plan—** The [capital](/usc/12/51c.md) structure plan of each [Federal home loan bank](/usc/12/1422.md?p=1-A) shall contain provisions addressing each of the following: - (1) **Minimum investment—** - (A) **In general—** Each [capital](/usc/12/51c.md) structure plan of a [Federal home loan bank](/usc/12/1422.md?p=1-A) shall require each [member](/usc/12/1422.md?p=3) of the [bank](/usc/12/1422.md?p=1-A) to maintain a minimum investment in the stock of the [bank](/usc/12/1422.md?p=1-A), the amount of which shall be determined in a manner to be prescribed by the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) of each [bank](/usc/12/1422.md?p=1-A) and to be included as part of the plan. - (B) **Investment alternatives—** - (i) **In general—** In establishing the minimum investment required for each [member](/usc/12/1422.md?p=3) under [subparagraph (A)](#c-1-A), a [Federal home loan bank](/usc/12/1422.md?p=1-A) may, in its discretion, include any 1 or more of the requirements referred to in [clause (ii)](#c-1-B-ii), or any other provisions approved by the [Director](/usc/12/1422.md?p=11). - (ii) **Authorized requirements—** A requirement is referred to in this clause if it is a requirement for— - (I) a stock purchase based on a percentage of the total assets of a [member](/usc/12/1422.md?p=3); or - (II) a stock purchase based on a percentage of the outstanding advances from the [bank](/usc/12/1422.md?p=1-A) to the [member](/usc/12/1422.md?p=3). - (C) **Minimum amount—** Each [capital](/usc/12/51c.md) structure plan of a [Federal home loan bank](/usc/12/1422.md?p=1-A) shall require that the minimum stock investment established for [members](/usc/12/1422.md?p=3) shall be set at a level that is sufficient for the [bank](/usc/12/1422.md?p=1-A) to meet the minimum [capital](/usc/12/51c.md) requirements established by the [Director](/usc/12/1422.md?p=11) under [subsection (a)](#a). - (D) **Adjustments to minimum required investment—** The [capital](/usc/12/51c.md) structure plan of each [Federal home loan bank](/usc/12/1422.md?p=1-A) shall impose a continuing obligation on the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) of the [bank](/usc/12/1422.md?p=1-A) to review and adjust the minimum investment required of each [member](/usc/12/1422.md?p=3) of that [bank](/usc/12/1422.md?p=1-A), as necessary to ensure that the [bank](/usc/12/1422.md?p=1-A) remains in compliance with applicable minimum [capital](/usc/12/51c.md) levels established by the [Director](/usc/12/1422.md?p=11), and shall require each [member](/usc/12/1422.md?p=3) to comply promptly with any adjustments to the required minimum investment. - (2) **Transition rule—** - (A) **In general—** The [capital](/usc/12/51c.md) structure plan of each [Federal home loan bank](/usc/12/1422.md?p=1-A) shall specify the date on which it shall take effect, and may provide for a transition period of not longer than 3 years to allow the [bank](/usc/12/1422.md?p=1-A) to come into compliance with the [capital](/usc/12/51c.md) requirements prescribed under [subsection (a)](#a), and to allow any institution that was a [member](/usc/12/1422.md?p=3) of the [bank](/usc/12/1422.md?p=1-A) on November 12, 1999, to come into compliance with the minimum investment required pursuant to the plan. - (B) **Interim purchase requirements—** The [capital](/usc/12/51c.md) structure plan of a [Federal home loan bank](/usc/12/1422.md?p=1-A) may allow any [member](/usc/12/1422.md?p=3) referred to in [subparagraph (A)](#c-2-A) that would be required by the terms of the [capital](/usc/12/51c.md) structure plan to increase its investment in the stock of the [bank](/usc/12/1422.md?p=1-A) to do so in periodic installments during the transition period. - (3) **Disposition of shares—** The [capital](/usc/12/51c.md) structure plan of a [Federal home loan bank](/usc/12/1422.md?p=1-A) shall provide for the manner of disposition of any stock held by a [member](/usc/12/1422.md?p=3) of that [bank](/usc/12/1422.md?p=1-A) that terminates its membership or that provides notice of its intention to withdraw from membership in that [bank](/usc/12/1422.md?p=1-A). - (4) **Classes of stock—** - (A) **In general—** The [capital](/usc/12/51c.md) structure plan of a [Federal home loan bank](/usc/12/1422.md?p=1-A) shall afford each [member](/usc/12/1422.md?p=3) of that [bank](/usc/12/1422.md?p=1-A) the option of maintaining its required investment in the [bank](/usc/12/1422.md?p=1-A) through the purchase of any combination of classes of stock authorized by the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) of the [bank](/usc/12/1422.md?p=1-A) and approved by the [Director](/usc/12/1422.md?p=11) in accordance with its regulations. - (B) **Rights requirement—** A [Federal home loan bank](/usc/12/1422.md?p=1-A) shall include in its [capital](/usc/12/51c.md) structure plan provisions establishing terms, rights, and preferences, [including](/usc/12/25b.md?p=a-3) minimum investment, dividends, voting, and liquidation preferences of each class of stock issued by the [bank](/usc/12/1422.md?p=1-A), consistent with regulations of the [Director](/usc/12/1422.md?p=11) and market requirements. - (C) **Reduced minimum investment—** The [capital](/usc/12/51c.md) structure plan of a [Federal home loan bank](/usc/12/1422.md?p=1-A) may provide for a reduced minimum stock investment for any [member](/usc/12/1422.md?p=3) of that [bank](/usc/12/1422.md?p=1-A) that elects to purchase Class B[^1] in a manner that is consistent with meeting the minimum [capital](/usc/12/51c.md) requirements of the [bank](/usc/12/1422.md?p=1-A), as established by the [Director](/usc/12/1422.md?p=11). - (D) **Liquidation of claims—** The [capital](/usc/12/51c.md) structure plan of a [Federal home loan bank](/usc/12/1422.md?p=1-A) shall provide for the liquidation in an orderly manner, as determined by the [bank](/usc/12/1422.md?p=1-A), of any claim of that [bank](/usc/12/1422.md?p=1-A) against a [member](/usc/12/1422.md?p=3), [including](/usc/12/25b.md?p=a-3) claims for any applicable prepayment fees or penalties resulting from prepayment of advances prior to stated maturity. - (5) **Limited transferability of stock—** The [capital](/usc/12/51c.md) structure plan of a [Federal home loan bank](/usc/12/1422.md?p=1-A) shall— - (A) provide that any stock issued by that [bank](/usc/12/1422.md?p=1-A) shall be available only to and held only by [members](/usc/12/1422.md?p=3) of that [bank](/usc/12/1422.md?p=1-A) and tradable only between that [bank](/usc/12/1422.md?p=1-A) and its [members](/usc/12/1422.md?p=3); and - (B) establish standards, criteria, and requirements for the issuance, purchase, transfer, retirement, and redemption of stock issued by that [bank](/usc/12/1422.md?p=1-A). - (6) **Bank review of plan—** Before filing a [capital](/usc/12/51c.md) structure plan with the [Director](/usc/12/1422.md?p=11), each [Federal home loan bank](/usc/12/1422.md?p=1-A) shall conduct a review of the plan by— - (A) an independent certified public accountant, to ensure, to the extent possible, that implementation of the plan would not result in any write-down of the redeemable [bank](/usc/12/1422.md?p=1-A) stock investment of its [members](/usc/12/1422.md?p=3); and - (B) at least one major [credit](/usc/12/5481.md?p=7) rating [agency](/usc/12/1422.md?p=12), to determine, to the extent possible, whether implementation of the plan would have any material effect on the [credit](/usc/12/5481.md?p=7) ratings of the [bank](/usc/12/1422.md?p=1-A). - (d) **Termination of membership—** - (1) **Voluntary withdrawal—** Any [member](/usc/12/1422.md?p=3) may withdraw from a [Federal home loan bank](/usc/12/1422.md?p=1-A) if the [member](/usc/12/1422.md?p=3) provides written notice to the [bank](/usc/12/1422.md?p=1-A) of its intent to do so and if, on the date of withdrawal, there is in effect a certification by the [Director](/usc/12/1422.md?p=11) that the withdrawal will not cause the [Federal Home Loan Bank System](/usc/12/1422.md?p=1-B) to fail to meet its obligation under [section 1441b(f)(2)(C) of this title](/usc/12/1441b.md?p=f-2-C) to contribute to the debt service for the obligations issued by the Resolution Funding [Corporation](/usc/12/2277a.md?p=2). The applicable stock redemption notice periods shall commence upon receipt of the notice by the [bank](/usc/12/1422.md?p=1-A). Upon the expiration of the applicable notice period for each class of redeemable stock, the [member](/usc/12/1422.md?p=3) may surrender such stock to the [bank](/usc/12/1422.md?p=1-A), and shall be entitled to receive in cash the par value of the stock. During the applicable notice periods, the [member](/usc/12/1422.md?p=3) shall be entitled to dividends and other membership rights commensurate with continuing stock ownership. - (2) **Involuntary withdrawal—** - (A) **In general—** The [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) of a [Federal home loan bank](/usc/12/1422.md?p=1-A) may terminate the membership of any institution if, subject to regulations of the [Director](/usc/12/1422.md?p=11), it determines that— - (i) the [member](/usc/12/1422.md?p=3) has failed to comply with a provision of this chapter or any regulation prescribed under this chapter; or - (ii) the [member](/usc/12/1422.md?p=3) has been determined to be insolvent, or otherwise subject to the appointment of a conservator, receiver, or other legal custodian, by a Federal or [State](/usc/12/1422.md?p=2) authority with regulatory and supervisory responsibility for the [member](/usc/12/1422.md?p=3). - (B) **Stock disposition—** An institution, the membership of which is terminated in accordance with [subparagraph (A)](#d-2-A)— - (i) shall surrender redeemable stock to the [Federal home loan bank](/usc/12/1422.md?p=1-A), and shall receive in cash the par value of the stock, upon the expiration of the applicable notice period under [subsection (a)(4)(A)](#a-4-A); - (ii) shall receive any dividends declared on its redeemable stock, during the applicable notice period under [subsection (a)(4)(A)](#a-4-A); and - (iii) shall not be entitled to any other rights or privileges accorded to [members](/usc/12/1422.md?p=3) after the date of the termination. - (C) **Commencement of notice period—** With respect to an institution, the membership of which is terminated in accordance with [subparagraph (A)](#d-2-A), the applicable notice period under [subsection (a)(4)](#a-4) for each class of redeemable stock shall commence on the earlier of— - (i) the date of such termination; or - (ii) the date on which the [member](/usc/12/1422.md?p=3) has provided notice of its intent to redeem such stock. - (3) **Liquidation of indebtedness—** Upon the termination of the membership of an institution for any reason, the outstanding indebtedness of the [member](/usc/12/1422.md?p=3) to the [bank](/usc/12/1422.md?p=1-A) shall be liquidated in an orderly manner, as determined by the [bank](/usc/12/1422.md?p=1-A) and, upon the extinguishment of all such indebtedness, the [bank](/usc/12/1422.md?p=1-A) shall return to the [member](/usc/12/1422.md?p=3) all collateral pledged to secure the indebtedness. - (e) **Redemption of excess stock—** - (1) **In general—** A [Federal home loan bank](/usc/12/1422.md?p=1-A), in its sole discretion, may redeem or repurchase, as appropriate, any shares of Class A or Class B stock issued by the [bank](/usc/12/1422.md?p=1-A) and held by a [member](/usc/12/1422.md?p=3) that are in excess of the minimum stock investment required of that [member](/usc/12/1422.md?p=3). - (2) **Excess stock—** Shares of stock held by a [member](/usc/12/1422.md?p=3) shall not be deemed to be “excess stock” for purposes of this subsection by virtue of a [member](/usc/12/1422.md?p=3)’s submission of a notice of intent to withdraw from membership or termination of its membership in any other manner. - (3) **Priority—** A [Federal home loan bank](/usc/12/1422.md?p=1-A) may not redeem any excess Class B stock prior to the end of the 5-year notice period, unless the [member](/usc/12/1422.md?p=3) has no Class A stock outstanding that could be redeemed as excess. - (f) **Impairment of capital—** If the [Director](/usc/12/1422.md?p=11) or the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) of a [Federal home loan bank](/usc/12/1422.md?p=1-A) determines that the [bank](/usc/12/1422.md?p=1-A) has incurred or is likely to incur losses that result in or are expected to result in charges against the [capital](/usc/12/51c.md) of the [bank](/usc/12/1422.md?p=1-A), the [bank](/usc/12/1422.md?p=1-A) shall not redeem or repurchase any stock of the [bank](/usc/12/1422.md?p=1-A) without the prior approval of the [Director](/usc/12/1422.md?p=11) while such charges are continuing or are expected to continue. In no case may a [bank](/usc/12/1422.md?p=1-A) redeem or repurchase any applicable [capital stock](/usc/12/51c.md) if, following the redemption, the [bank](/usc/12/1422.md?p=1-A) would fail to satisfy any minimum [capital](/usc/12/51c.md) requirement. - (g) **Rejoining after divestiture of all shares—** - (1) **In general—** Except as provided in [paragraph (2)](#g-2), and notwithstanding any other provision of this chapter, an institution that divests all shares of stock in a [Federal home loan bank](/usc/12/1422.md?p=1-A) may not, after such divestiture, [acquire](/usc/12/1467a.md?p=a-1-J) shares of any [Federal home loan bank](/usc/12/1422.md?p=1-A) before the end of the 5-year period beginning on the date of the completion of such divestiture, unless the divestiture is a consequence of a transfer of membership on an uninterrupted basis between [banks](/usc/12/221a.md?p=a). - (2) **Exception for withdrawals from membership before 1998—** Any institution that withdrew from membership in any [Federal home loan bank](/usc/12/1422.md?p=1-A) before December 31, 1997, may [acquire](/usc/12/1467a.md?p=a-1-J) shares of a [Federal home loan bank](/usc/12/1422.md?p=1-A) at any time after that date, subject to the approval of the [Director](/usc/12/1422.md?p=11) and the requirements of this chapter. - (h) **Treatment of retained earnings—** - (1) **In general—** The holders of the Class B stock of a [Federal home loan bank](/usc/12/1422.md?p=1-A) shall own the retained earnings, surplus, undivided profits, and equity reserves, if any, of the [bank](/usc/12/1422.md?p=1-A). - (2) **Exception—** Except as specifically provided in this section or through the declaration of a dividend or a [capital](/usc/12/51c.md) distribution by a [Federal home loan bank](/usc/12/1422.md?p=1-A), or in the event of liquidation of the [bank](/usc/12/1422.md?p=1-A), a [member](/usc/12/1422.md?p=3) shall have no right to withdraw or otherwise receive distribution of any portion of the retained earnings of the [bank](/usc/12/1422.md?p=1-A). - (3) **Limitation—** A [Federal home loan bank](/usc/12/1422.md?p=1-A) may not make any distribution of its retained earnings unless, following such distribution, the [bank](/usc/12/1422.md?p=1-A) would continue to meet all applicable [capital](/usc/12/51c.md) requirements. # §1426a. Exclusion from certain requirements - (a) **In general—** The [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) shall be exempt from compliance with— - (1) sections [78m(e)](/usc/15/78m.md?p=e), [78n(a)](/usc/15/78n.md?p=a), and [78n(c)](/usc/15/78n.md?p=c) of title 15, and related [Commission](#g-2) regulations; - (2) [section 78o](/usc/15/78o.md) of title 15, and related [Commission](#g-2) regulations, with respect to transactions in the [capital stock](/usc/12/51c.md) of a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A); - (3) [section 78q–1 of title 15](/usc/15/78q–1.md), and related [Commission](#g-2) regulations, with respect to the transfer of the securities of a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A); and - (4) the Trust Indenture Act of 1939 [[15 U.S.C. 77aaa](/usc/15/77aaa.md) et seq.]. - (b) **Member exemption—** The [members](/usc/12/1422.md?p=3) of the [Federal Home Loan Bank System](/usc/12/1422.md?p=1-B) shall be exempt from compliance with sections [78m(d)](/usc/15/78m.md?p=d), [78m(f)](/usc/15/78m.md?p=f), [78m(g)](/usc/15/78m.md?p=g), [78n(d)](/usc/15/78n.md?p=d), and [78p](/usc/15/78p.md) of title 15, and related [Commission](#g-2) regulations, with respect to ownership of or transactions in the [capital stock](/usc/12/51c.md) of the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) by such [members](/usc/12/1422.md?p=3). - (c) **Exempted and Government securities—** - (1) **Capital stock—** The [capital stock](/usc/12/51c.md) issued by each of the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) under [section 1426 of this title](/usc/12/1426.md) are— - (A) exempted securities, within the meaning of [section 77c(a)(2) of title 15](/usc/15/77c.md?p=a-2); and - (B) exempted securities, within the meaning of [section 78c(a)(12)(A) of title 15](/usc/15/78c.md?p=a-12-A), except to the extent provided in [section 78oo](/usc/15/78oo.md) of title 15. - (2) **Other obligations—** The debentures, bonds, and other obligations issued under [section 1431 of this title](/usc/12/1431.md) are— - (A) exempted securities, within the meaning of [section 77c(a)(2) of title 15](/usc/15/77c.md?p=a-2); - (B) government securities, within the meaning of [section 78c(a)(42) of title 15](/usc/15/78c.md?p=a-42); and - (C) government securities, within the meaning of [section 80a–2(a)(16) of title 15](/usc/15/80a–2.md?p=a-16). - (3) **Brokers and dealers—** A [person](/usc/12/5481.md?p=19) (other than a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) effecting transactions for [members](/usc/12/1422.md?p=3) of the [Federal Home Loan Bank System](/usc/12/1422.md?p=1-B)) that effects transactions in the [capital stock](/usc/12/51c.md) or other obligations of a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A), for the account of others or for that [person](/usc/12/5481.md?p=19)’s own account, as applicable, is a broker or dealer, as those terms are defined in paragraphs (4) and (5), respectively, of [section 78c(a) of title 15](/usc/15/78c.md?p=a), but is excluded from the definition of— - (A) the term “government securities broker” under [section 78c(a)(43) of title 15](/usc/15/78c.md?p=a-43); and - (B) the term “government securities dealer” under [section 78c(a)(44) of title 15](/usc/15/78c.md?p=a-44). - (d) **Exemption from reporting requirements—** The [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) shall be exempt from periodic reporting requirements under the [securities laws](#g-3) pertaining to the disclosure of— - (1) related party transactions that occur in the ordinary course of the business of the [Banks](/usc/12/221a.md?p=a) with [members](/usc/12/1422.md?p=3); and - (2) the unregistered sales of equity securities. - (e) **Tender offers—** [Commission](#g-2) rules relating to tender offers shall not apply in connection with transactions in the [capital stock](/usc/12/51c.md) of the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A). - (f) **Regulations—** - (1) **In general—** The [Commission](#g-2) shall promulgate such rules and regulations as may be necessary or appropriate in the public interest or in furtherance of this section and the exemptions provided in this section. - (2) **Considerations—** In issuing regulations under this section, the [Commission](#g-2) shall consider the distinctive characteristics of the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) when evaluating— - (A) the accounting treatment with respect to the payment to the Resolution Funding [Corporation](/usc/12/2277a.md?p=2); - (B) the role of the combined financial statements of the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A); - (C) the accounting classification of redeemable [capital stock](/usc/12/51c.md); and - (D) the accounting treatment related to the joint and several nature of the obligations of the [Banks](/usc/12/221a.md?p=a). - (g) **Definitions—** As used in this section— - (1) the terms “[Bank](/usc/12/1422.md?p=1-A)”, “[Federal Home Loan Bank](/usc/12/1422.md?p=1-A)”, “[member](/usc/12/1422.md?p=3)”, and “[Federal Home Loan Bank System](/usc/12/1422.md?p=1-B)” have the same meanings as in [section 1422 of this title](/usc/12/1422.md); - (2) the term “Commission” means the Securities and Exchange Commission; and - (3) the term “securities laws” has the same meaning as in [section 78c(a)(47) of title 15](/usc/15/78c.md?p=a-47). # §1427. Directors - (a) **Number; election; qualifications; conflicts of interest—** - (1) **In general—** Subject to [paragraphs (2) through (4)](#a-2..a-4), the management of each [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) shall be vested in a [board](/usc/12/221a.md?p=a) of 13 [directors](/usc/12/1422.md?p=11), or such other number as the [Director](/usc/12/1422.md?p=11) determines appropriate. - (2) **Board makeup—** The [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) of each [Bank](/usc/12/1422.md?p=1-A) shall be comprised of— - (A) [member directors](#a-4-B), who shall comprise at least the majority of the members of the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11); and - (B) [independent directors](#a-4-A), who shall comprise not fewer than ⅖ of the members of the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11). - (3) **Selection criteria—** - (A) **In general—** Each [member](/usc/12/1422.md?p=3) of the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) shall be— - (i) elected by plurality vote of the members, in accordance with procedures established under this section; and - (ii) a citizen of the United States. - (B) **Independent director criteria—** - (i) **In general—** Each [independent director](#a-4-A) that is not a public interest [director](/usc/12/1422.md?p=11) under [clause (ii)](#a-3-B-ii) shall have demonstrated knowledge of, or experience in, financial management, auditing and accounting, risk management practices, derivatives, project development, or organizational management, or such other knowledge or expertise as the [Director](/usc/12/1422.md?p=11) may provide by regulation. - (ii) **Public interest—** Not fewer than 2 of the [independent directors](#a-4-A) shall have more than 4 years of experience in representing [consumer](/usc/12/5481.md?p=4) or community interests on banking services, [credit](/usc/12/5481.md?p=7) needs, housing, or financial [consumer](/usc/12/5481.md?p=4) protections. - (iii) **Conflicts of interest—** No [independent director](#a-4-A) may, during the term of service on the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11), serve as an officer of any [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) or as a [director](/usc/12/1422.md?p=11), officer, or employee of any [member](/usc/12/1422.md?p=3) of a [Bank](/usc/12/1422.md?p=1-A), or of [any person](/usc/12/1715z–4a.md?p=a-2) that receives advances from a [Bank](/usc/12/1422.md?p=1-A). - (4) **Definitions—** For purposes of this section, the following definitions shall apply: - (A) **Independent director—** The terms “independent director” and “independent directorship” mean a [member](/usc/12/1422.md?p=3) of the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) of a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) who is a bona fide resident of the [district](/usc/12/221a.md?p=a) in which the [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) is located, or the directorship held by such a [person](/usc/12/5481.md?p=19), respectively. - (B) **Member director—** The terms “member director” and “member directorship” mean a [member](/usc/12/1422.md?p=3) of the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) of a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) who is an officer or [director](/usc/12/1422.md?p=11) of a [member](/usc/12/1422.md?p=3) institution that is located in the [district](/usc/12/221a.md?p=a) in which the [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) is located, or the directorship held by such a [person](/usc/12/5481.md?p=19), respectively. - (b) **Directorships—** - (1) **Member directorships—** Each [member directorship](#a-4-B) shall be designated by the [Director](/usc/12/1422.md?p=11) as representing the members located in a particular [State](#e), and shall be filled by a [person](/usc/12/5481.md?p=19) who is an officer or [director](/usc/12/1422.md?p=11) of a [member](/usc/12/1422.md?p=3) located in that [State](#e), each of which members shall be entitled to nominate an eligible [person](/usc/12/5481.md?p=19) for such directorship, and such [office](/usc/12/2279bb.md?p=4) shall be filled from such nominees by a plurality of the votes which such members may cast in an election held for the purpose of filling such [office](/usc/12/2279bb.md?p=4), in which election each such [member](/usc/12/1422.md?p=3) may cast for such [office](/usc/12/2279bb.md?p=4) a number of votes equal to the number of shares of stock in such [bank](/usc/12/1422.md?p=1-A) required by this chapter to be held by such [member](/usc/12/1422.md?p=3) at the end of the calendar year next preceding the election, as determined pursuant to regulation of the [Director](/usc/12/1422.md?p=11), but not in excess of the average number of shares of stock in such [bank](/usc/12/1422.md?p=1-A) required by this chapter to be held at the end of such calendar year by the respective members of such [bank](/usc/12/1422.md?p=1-A) located in such [State](#e), as so determined. No [person](/usc/12/5481.md?p=19) who is an officer or [director](/usc/12/1422.md?p=11) of a [member](/usc/12/1422.md?p=3) that fails to meet any applicable [capital](/usc/12/51c.md) requirement is eligible to hold the [office](/usc/12/2279bb.md?p=4) of [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) [director](/usc/12/1422.md?p=11). As used in this subsection and in [subsection (c)](#c) of this section, the term “[member](/usc/12/1422.md?p=3)” means a [member](/usc/12/1422.md?p=3) of a [Federal home loan bank](/usc/12/1422.md?p=1-A) which was a [member](/usc/12/1422.md?p=3) of such [bank](/usc/12/1422.md?p=1-A) at the end of such calendar year. - (2) **Independent directorships—** - (A) **Elections—** Each [independent director](#a-4-A)— - (i) shall be elected by the members entitled to vote, from among eligible [persons](/usc/12/5481.md?p=19) nominated, after consultation with the Advisory Council of the [Bank](/usc/12/1422.md?p=1-A), by the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) of the [Bank](/usc/12/1422.md?p=1-A); and - (ii) shall be elected by a plurality of the votes of the members of the [Bank](/usc/12/1422.md?p=1-A) at large, with each [member](/usc/12/1422.md?p=3) having the number of votes for each such directorship as it has under [paragraph (1)](#b-1) in an election to fill [member directorships](#a-4-B). - (B) **Criteria—** Nominees shall meet all applicable requirements prescribed in this section. - (C) **Nomination and election procedures—** Procedures for nomination and election of [independent directors](#a-4-A) shall be prescribed by the bylaws of each [Federal Home Loan Bank](/usc/12/1422.md?p=1-A), in a manner consistent with the rules and regulations of the [Agency](/usc/12/1422.md?p=12). - (c) **Apportionment among States in bank district; designation of State location—** The number of [member directorships](#a-4-B) designated as representing the members located in each separate [State](#e) in a [bank](/usc/12/1422.md?p=1-A) [district](/usc/12/221a.md?p=a) shall be determined by the [Director](/usc/12/1422.md?p=11) in the approximate ratio of the percentage of the required stock, as determined pursuant to regulation of the [Director](/usc/12/1422.md?p=11), of the members located in that [State](#e) at the end of the calendar year next preceding the date of the election to the total required stock, as so determined, of all members of such [bank](/usc/12/1422.md?p=1-A) at the end of such year, except that in the case of each [State](#e) such number shall not be less than one and shall not be more than six. Notwithstanding any other provision of this section, (A) except as provided in clause (B) of this sentence, if at any time the number of [member directorships](#a-4-B) so designated as representing the members located in any [State](#e) would not be at least equal to the total number of elective directorships which, on December 31, 1960, were filled by officers or [directors](/usc/12/1422.md?p=11) of members whose principal places of business were located in such [State](#e), the [Director](/usc/12/1422.md?p=11) shall add to the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) of the [bank](/usc/12/1422.md?p=1-A) of the [district](/usc/12/221a.md?p=a) in which such [State](#e) is located such number of [member directorships](#a-4-B), and shall so designate the directorship or directorships thus added, that the number of [member directorships](#a-4-B) designated as representing the members located in such [State](#e) will equal said total number, and (B) clause (A) of this sentence shall not apply to the directorships of any [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) resulting from the merger of any 2 or more such [Banks](/usc/12/221a.md?p=a). Any [member directorship](#a-4-B) so added shall exist only until the expiration of its first term. The [Director](/usc/12/1422.md?p=11) shall, with respect to each [member](#b-1) of a [Federal home loan bank](/usc/12/1422.md?p=1-A), designate the [State](#e) in the [district](/usc/12/221a.md?p=a) of such [bank](/usc/12/1422.md?p=1-A) in which such [member](#b-1) shall, for the purposes of this subsection and [subsection (b)](#b) of this section, be deemed to be located, and may from time to time change any such designation, but if the principal place of business of any such [member](#b-1) is located in a [State](#e) of such [district](/usc/12/221a.md?p=a) it shall be the duty of the [Director](/usc/12/1422.md?p=11) to designate such [State](#e) as the [State](#e) in which such [member](#b-1) shall, for said purposes, be deemed to be located. As used in the second sentence of this subsection, the term “total number of elective directorships” means the total number of elective directorships on the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) of the [bank](/usc/12/1422.md?p=1-A) of the [district](/usc/12/221a.md?p=a) in which such [State](#e) was located on December 31, 1960, and the term “members” where used for the second time in such sentence means members of such [bank](/usc/12/1422.md?p=1-A). - (d) **Terms; rules and regulations governing nominations and elections—** The term of each [director](/usc/12/1422.md?p=11) shall be 4 years. The [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) of each [Federal home loan bank](/usc/12/1422.md?p=1-A) and the [Director](/usc/12/1422.md?p=11) shall adjust the terms of members first elected after July 30, 2008, to ensure that the terms of the members of the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) are staggered with approximately ¼ of the terms expiring each year. If [any person](/usc/12/1715z–4a.md?p=a-2), before or after, or partly before and partly after, September 8, 1961, has been elected to each of three consecutive full terms as a [director](/usc/12/1422.md?p=11) of a [Federal home loan bank](/usc/12/1422.md?p=1-A) and has served for all or part of each of said terms, such [person](/usc/12/5481.md?p=19) shall not be eligible for election to a directorship of such [bank](/usc/12/1422.md?p=1-A) for a term which begins earlier than two years after the expiration of the last expiring of said three terms. The [Director](/usc/12/1422.md?p=11) is authorized to prescribe such rules and regulations as it may deem necessary or appropriate for the nomination and election of [directors](/usc/12/1422.md?p=11) of [Federal home loan banks](/usc/12/1422.md?p=1-A), [including](/usc/12/25b.md?p=a-3), without limitation on the generality of the foregoing, rules and regulations with respect to the breaking of ties and with respect to the inclusion of more than one directorship on a single ballot and the methods of voting and of determining the results of voting in such cases. - (e) **Continuation of existing terms; directorship for the Commonwealth of Puerto Rico—** Each term, outstanding on the effective date of the amendment to this section abolishing the division of elective [directors](/usc/12/1422.md?p=11) into classes, of an elective or appointive directorship then existing shall continue until its original date of expiration, and any elective or appointive directorship in existence on said date shall continue to exist to the same extent as if it had been established by or under this section on or after said date. The [Director](/usc/12/1422.md?p=11) in its[^1] discretion may shorten the next succeeding term of any such elective directorship to one year, and may fill such term by appointment. The term “States” or “State” as used in this section shall mean the States of the Union, the District of Columbia, and the Commonwealth of Puerto Rico. The [Director](/usc/12/1422.md?p=11), by regulation or otherwise, may add an additional elective directorship to the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) of the [bank](/usc/12/1422.md?p=1-A) of any [district](/usc/12/221a.md?p=a) in which the Commonwealth of Puerto Rico is included at the time such directorship is added and which does not then include five or more States, may fix the commencement and the duration, which shall not exceed two years, of the initial term of any directorship so added, and may fill any such initial term by appointment: Provided, That (1) any directorship added pursuant to the foregoing provisions of this sentence shall be designated by the [Director](/usc/12/1422.md?p=11), pursuant to [subsection (b)](#b) of this section, as representing the members located in the Commonwealth of Puerto Rico, (2) such designation of such directorship shall not be changed, and (3) such directorship shall automatically cease to exist if and when the Commonwealth of Puerto Rico ceases to be included in such [district](/usc/12/221a.md?p=a). - (f) **Vacancies—** - (1) **In general—** A [Bank](/usc/12/1422.md?p=1-A) [director](/usc/12/1422.md?p=11) elected to fill a vacancy shall be elected for the unexpired term of his or her predecessor in [office](/usc/12/2279bb.md?p=4). - (2) **Election process—** In the event of a vacancy in any [Bank](/usc/12/1422.md?p=1-A) directorship, such vacancy shall be filled by an affirmative vote of a majority of the remaining [Bank](/usc/12/1422.md?p=1-A) [directors](/usc/12/1422.md?p=11), regardless of whether such remaining [Bank](/usc/12/1422.md?p=1-A) [directors](/usc/12/1422.md?p=11) constitute a quorum of the [Bank](/usc/12/1422.md?p=1-A)’s [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11). A [Bank](/usc/12/1422.md?p=1-A) [director](/usc/12/1422.md?p=11) so elected shall satisfy the requirements for eligibility which were applicable to his predecessor. If any [Bank](/usc/12/1422.md?p=1-A) [director](/usc/12/1422.md?p=11) shall cease to have any qualification set forth in this section, the [office](/usc/12/2279bb.md?p=4) held by such [person](/usc/12/5481.md?p=19) shall immediately become vacant, and such [person](/usc/12/5481.md?p=19) shall not continue to act as a [Bank](/usc/12/1422.md?p=1-A) [director](/usc/12/1422.md?p=11). - (g) **Chairperson and Vice Chairperson—** - (1) **Election—** The Chairperson and Vice Chairperson of the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) of each [Federal home loan bank](/usc/12/1422.md?p=1-A) shall be elected by a majority of all the [directors](/usc/12/1422.md?p=11) of such [bank](/usc/12/1422.md?p=1-A) from among the [directors](/usc/12/1422.md?p=11) of the [bank](/usc/12/1422.md?p=1-A). - (2) **Terms—** The term of [office](/usc/12/2279bb.md?p=4) of the Chairperson and the Vice Chairperson of the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) of a [Federal home loan bank](/usc/12/1422.md?p=1-A) shall be 2 years. - (3) **Acting Chairperson—** In the event of a vacancy in the position of Chairperson of the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) or during the absence or disability of the Chairperson, the Vice Chairperson shall act as Chairperson. - (4) **Procedures—** The [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) of each [Federal home loan bank](/usc/12/1422.md?p=1-A) shall establish procedures, in the bylaws of such [board](/usc/12/221a.md?p=a), for designating an acting chairperson for any period during which the Chairperson and the Vice Chairperson are not available to carry out the requirements of that position for any reason and removing [any person](/usc/12/1715z–4a.md?p=a-2) from any such position for good cause. - (h) **Appointment where members hold less than $1,000,000 of capital stock—** If at any time when nominations are required members shall hold less than $1,000,000 of the [capital stock](/usc/12/51c.md) of the [Federal home loan bank](/usc/12/1422.md?p=1-A), the [Director](/usc/12/1422.md?p=11) shall appoint a [director](/usc/12/1422.md?p=11) or [directors](/usc/12/1422.md?p=11) to fill the place or places for which such nominations are required, and the [Director](/usc/12/1422.md?p=11) may, prior to the filing of the certificate mentioned in [section 1432 of this title](/usc/12/1432.md), appoint [directors](/usc/12/1422.md?p=11) who shall be respectively designated by it as appointive [directors](/usc/12/1422.md?p=11) and as [member directors](#a-4-B), in accordance with the provisions of this section. - (i) **Directors’ compensation—** - (1) **In general—** Each [bank](/usc/12/1422.md?p=1-A) may pay its [directors](/usc/12/1422.md?p=11) reasonable compensation for the time required of them, and their necessary expenses, in the performance of their duties, in accordance with the resolutions adopted by such [directors](/usc/12/1422.md?p=11), subject to the approval of the [board](/usc/12/221a.md?p=a). - (2) **Annual report—** The [Director](/usc/12/1422.md?p=11) shall include, in the annual report submitted to the Congress pursuant to [section 4521 of this title](/usc/12/4521.md), information regarding the compensation and expenses paid by the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) to the [directors](/usc/12/1422.md?p=11) on the [boards](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) of the [Banks](/usc/12/221a.md?p=a). - (j) **Duties of directors—** Such [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) shall administer the affairs of the [bank](/usc/12/1422.md?p=1-A) fairly and impartially and without discrimination in favor of or against any [member](/usc/12/1422.md?p=3), and shall, subject to the provisions hereof, extend to each institution authorized to secure advances such advances as may be made safely and reasonably with due regard for the claims and demands of other institutions, and with due regard to the maintenance of adequate [credit](/usc/12/5481.md?p=7) standing for the [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) and its obligations. - (k) **Indemnification of directors, officers, and employees—** The [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) of each [Bank](/usc/12/1422.md?p=1-A) shall determine the terms and conditions under which such [Bank](/usc/12/1422.md?p=1-A) may indemnify its [directors](/usc/12/1422.md?p=11), officers, employees or agents. - (l) **[^2] Withholding of compensation—** Notwithstanding any other provision of this section, a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) shall not transfer, disburse, or pay compensation to any [executive officer](/usc/12/1831o.md?p=b-2-H), or enter into an agreement with such [executive officer](/usc/12/1831o.md?p=b-2-H), without the approval of the [Director](/usc/12/1422.md?p=11), for matters being reviewed under [section 4518 of this title](/usc/12/4518.md). - (l) **[^2] Transition rule—** Any [member](/usc/12/1422.md?p=3) of the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) of a [Bank](/usc/12/1422.md?p=1-A) elected or appointed in accordance with this section prior to July 30, 2008, may continue to serve as a [member](/usc/12/1422.md?p=3) of that [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) for the remainder of the existing term of service. # §1428. Examination of State laws, regulations, and procedures; studies of values, etc. The [Director](/usc/12/1422.md?p=11) shall cause to be made from time to time examinations of the laws of the various [States](/usc/12/1422.md?p=2) of the United States and the regulations and procedure thereunder governing conditions under which institutions of the kinds which may become [members](/usc/12/1422.md?p=3) or nonmember borrowers under this chapter are permitted to be formed or to do business, or relating to the conveying or recording of land titles, or to homestead and other rights, or to the enforcement of the rights of holders of [mortgages](/usc/12/1707.md?p=a) on lands securing loans, or otherwise. If any such examination shall indicate, in the opinion of the [Director](/usc/12/1422.md?p=11), that under the laws of any such [State](/usc/12/1422.md?p=2) or the regulations or procedure thereunder there would be inadequate protection to a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) in making or collecting advances under this chapter, the [Director](/usc/12/1422.md?p=11) may withhold or limit the operation of any [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) in such [State](/usc/12/1422.md?p=2) until satisfactory conditions of law, regulation, or procedure shall be established. In any [State](/usc/12/1422.md?p=2) where [State](/usc/12/1422.md?p=2) examination of [members](/usc/12/1422.md?p=3) or nonmember borrowers is deemed inadequate for the purposes of the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A), the [Director](/usc/12/1422.md?p=11) shall establish such examination, all or part of the cost of which may be considered as part of the cost of making advances in such [State](/usc/12/1422.md?p=2). The [banks](/usc/12/221a.md?p=a) and/or the [Director](/usc/12/1422.md?p=11) may make studies of trends of home and other property values, methods of appraisals, and other subjects such as they may deem useful for the general guidance of their policies and operations and those of institutions authorized to secure advances. # [§1428a. Repealed. Pub. L. 101–73, title VII, § 718, Aug. 9, 1989, 103 Stat. 422 — repealed] # §1429. Eligibility to secure advances Any [member](/usc/12/1422.md?p=3) of a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) shall be entitled to apply in writing for advances. Such application shall be in such form as shall be required by the [Federal Home Loan Bank](/usc/12/1422.md?p=1-A). Such [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) may at its discretion deny any such application, or may grant it on such conditions as the [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) may prescribe. # §1430. Advances to members - (a) **In general—** - (1) **All advances—** Each [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) is authorized to make secured advances to its [members](/usc/12/1422.md?p=3) upon collateral sufficient, in the judgment of the [Bank](/usc/12/1422.md?p=1-A), to fully secure advances obtained from the [Bank](/usc/12/1422.md?p=1-A) under this section or [section 1431(g) of this title](/usc/12/1431.md?p=g). - (2) **Purposes of advances—** A long-term advance may only be made for the purposes of— - (A) providing [funds](/usc/12/4702.md?p=10) to any [member](/usc/12/1422.md?p=3) for residential housing finance; and - (B) providing [funds](/usc/12/4702.md?p=10) to any [community financial institution](/usc/12/1422.md?p=10-A) for [small businesses](#a-6), [small farms](#a-6), [small agri-businesses](#a-6), and [community development activities](#a-6). - (3) **Collateral—** A [Bank](/usc/12/1422.md?p=1-A), at the time of origination or renewal of a loan or advance, shall obtain and maintain a security interest in collateral eligible pursuant to one or more of the following categories: - (A) Fully disbursed, whole [first mortgages](/usc/12/1707.md?p=a) on improved residential property (not more than 90 days delinquent), or securities representing a whole interest in such [mortgages](/usc/12/1707.md?p=a). - (B) Securities issued, insured, or guaranteed by the United States Government or any [agency](/usc/12/1422.md?p=12) thereof ([including](/usc/12/25b.md?p=a-3) without limitation, [mortgage](/usc/12/1707.md?p=a)-backed securities issued or guaranteed by the Federal Home Loan [Mortgage](/usc/12/1707.md?p=a) [Corporation](/usc/12/2277a.md?p=2), the Federal National [Mortgage](/usc/12/1707.md?p=a) [Corporation](/usc/12/2277a.md?p=2), and the Government National [Mortgage](/usc/12/1707.md?p=a) [Association](/usc/12/1828.md?p=s-4-E-i)). - (C) Cash or [deposits](/usc/12/5301.md?p=18-A) of a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A). - (D) Other [real estate](/usc/12/1715z–20.md?p=b-2) related collateral acceptable to the [Bank](/usc/12/1422.md?p=1-A) if such collateral has a readily ascertainable value and the [Bank](/usc/12/1422.md?p=1-A) can perfect its interest in the collateral. - (E) Secured loans for [small business](#a-6), [agriculture](#a-6), or [community development activities](#a-6) or securities representing a whole interest in such secured loans, in the case of any [community financial institution](/usc/12/1422.md?p=10-A). - (4) **Additional bank authority—** [Subparagraphs (A) through (E)](#a-3-A..a-3-E) of paragraph (3) shall not affect the ability of any [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) to take such steps as it deems necessary to protect its security position with respect to outstanding advances, [including](/usc/12/25b.md?p=a-3) requiring [deposits](/usc/12/5301.md?p=18-A) of additional collateral security, whether or not such additional security would be eligible to originate an advance. If an advance existing on August 9, 1989, matures and the [member](/usc/12/1422.md?p=3) does not have sufficient eligible collateral to fully secure a renewal of such advance, a [Bank](/usc/12/1422.md?p=1-A) may renew such advance secured by such collateral as the [Bank](/usc/12/1422.md?p=1-A) determines is appropriate. A [member](/usc/12/1422.md?p=3) that has an advance secured by such insufficient eligible collateral must reduce its level of outstanding advances promptly and prudently in accordance with a schedule determined by the [Federal home loan bank](/usc/12/1422.md?p=1-A). - (5) **Review of certain collateral standards—** The [Director](/usc/12/1422.md?p=11) may review the collateral standards applicable to each [Federal home loan bank](/usc/12/1422.md?p=1-A) for the classes of collateral described in subparagraphs [(D)](#a-3-D) and [(E)](#a-3-E) of paragraph (3), and may, if necessary for safety and soundness purposes, require an increase in the collateral standards for any or all of those classes of collateral. - (6) **Definitions—** For purposes of this subsection, the terms “small business”, “agriculture”, “small farm”, “small agri-business”, and “community development activities” shall have the meanings given those terms by regulation of the [Director](/usc/12/1422.md?p=11). - (b) **Appraisals and other investigations; acceptance of home mortgages as collateral security only by approval of Director—** For the purposes of this section, each Home Loan [Bank](/usc/12/1422.md?p=1-A) shall have power to make, or to cause or require to be made, such appraisals and other investigations as it may deem necessary. No [home mortgage](/usc/12/1422.md?p=5) otherwise eligible to be accepted as collateral security for an advance by a Home Loan [Bank](/usc/12/1422.md?p=1-A) shall be accepted if any [director](/usc/12/1422.md?p=11), officer, employee, attorney or agent of the Home Loan [Bank](/usc/12/1422.md?p=1-A) or of the borrowing institution is personally liable thereon, unless the [Director](/usc/12/1422.md?p=11) has specifically approved such acceptance. - (c) **Notes of borrowing members; interest rate; lien on stock—** Such advances shall be made upon the note or obligation of the [member](/usc/12/1422.md?p=3) secured as provided in this section, bearing such rate of interest as the [Federal home loan bank](/usc/12/1422.md?p=1-A) may approve or determine, and the [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) shall have a lien upon and shall hold the stock of such [member](/usc/12/1422.md?p=3) as further collateral security for all indebtedness of the [member](/usc/12/1422.md?p=3) to the [Federal Home Loan Bank](/usc/12/1422.md?p=1-A). - (d) **Obligation to repay; additional security; sale of advances to other banks—** The institution applying for an advance shall enter into a primary and unconditional obligation to pay off all advances, together with interest and any unpaid costs and expenses in connection therewith according to the terms under which they were made, in such form as shall meet the requirements of the [bank](/usc/12/1422.md?p=1-A). The [bank](/usc/12/1422.md?p=1-A) shall reserve the right to require at any time, when deemed necessary for its protection, [deposits](/usc/12/5301.md?p=18-A) of additional collateral security or substitutions of security by the borrowing institution, and each borrowing institution shall assign additional or substituted security when and as so required. Any [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) shall have power to sell to any other [Federal Home Loan Bank](/usc/12/1422.md?p=1-A), with or without recourse, any advance made under the provisions of this chapter, or to allow to such [bank](/usc/12/1422.md?p=1-A) a [participation](/usc/12/2206a.md?p=a-1) therein, and any other [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) shall have power to purchase such advance or to accept a [participation](/usc/12/2206a.md?p=a-1) therein, together with an appropriate assignment of security therefor. - (e) **Priority of certain secured interests—** Notwithstanding any other provision of law, any security interest granted to a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) by any [member](/usc/12/1422.md?p=3) of any [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) or any [affiliate](/usc/12/24a.md?p=g-1) of any such [member](/usc/12/1422.md?p=3) shall be entitled to priority over the claims and rights of any party ([including](/usc/12/25b.md?p=a-3) any receiver, conservator, trustee, or similar party having rights of a lien creditor) other than claims and rights that— - (1) would be entitled to priority under otherwise applicable law; and - (2) are held by actual bona fide purchasers for value or by actual secured parties that are secured by actual perfected security interests. - (g) **[^1] Community support requirements—** - (1) **In general—** Before the end of the 2-year period beginning on August 9, 1989, the [Director](/usc/12/1422.md?p=11) shall adopt regulations establishing standards of community investment or service for [members](/usc/12/1422.md?p=3) of [Banks](/usc/12/221a.md?p=a) to maintain continued access to long-term advances. - (2) **Factors to be included—** The regulations promulgated pursuant to [paragraph (1)](#g-1) shall take into account factors such as a [member](/usc/12/1422.md?p=3)’s performance under the Community Reinvestment Act of 1977 [[12 U.S.C. 2901](/usc/12/2901.md) et seq.] and the [member](/usc/12/1422.md?p=3)’s record of lending to first-time homebuyers. - (h) **Special liquidity advances—** - (1) **In general—** Subject to [paragraph (2)](#h-2), the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) may, upon the request of the [Director](/usc/12/1422.md?p=11) of the [Office](/usc/12/2279bb.md?p=4) of Thrift Supervision, make short-term liquidity advances to a [savings association](/usc/12/1422.md?p=8) that— - (A) is solvent but presents a supervisory concern because of such [association](/usc/12/1828.md?p=s-4-E-i)’s poor financial condition; and - (B) has reasonable and demonstrable prospects of returning to a satisfactory financial condition. - (2) **Interest on and security for special liquidity advances—** Any loan by a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) pursuant to [paragraph (1)](#h-1) shall be subject to all applicable collateral requirements, [including](/usc/12/25b.md?p=a-3) the requirements of [subsection (a)](#a), and shall be at an interest rate no less favorable than those made available for similar short-term liquidity advances to [savings associations](/usc/12/1422.md?p=8) that do not present such supervisory concern. - (i) **Community investment program—** - (1) **In general—** Each [Bank](/usc/12/1422.md?p=1-A) shall establish a program to provide funding for [members](/usc/12/1422.md?p=3) to undertake [community-oriented mortgage lending](#i-2). Each [Bank](/usc/12/1422.md?p=1-A) shall designate a community investment officer to implement community lending and affordable housing advance programs of the [Banks](/usc/12/221a.md?p=a) under this subsection and [subsection (j)](#j) and provide technical assistance and outreach to promote such programs. Advances under this program shall be priced at the cost of consolidated [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) obligations of comparable maturities, taking into account reasonable administrative costs. - (2) **Community-oriented mortgage lending—** For purposes of this subsection, the term “community-oriented mortgage lending” means providing loans— - (A) to finance home purchases by [families](/usc/12/1715z–1.md?p=j-2-A) whose income does not exceed 115 percent of the median income for the area, - (B) to finance purchase or rehabilitation of housing for occupancy by [families](/usc/12/1715z–1.md?p=j-2-A) whose income does not exceed 115 percent of median income for the area, - (C) to finance commercial and economic development activities that benefit low- and moderate-income [families](/usc/12/1715z–1.md?p=j-2-A) or activities that are located in low- and moderate-income neighborhoods, and - (D) to finance projects that further a combination of the purposes described in [subparagraphs (A) through (C)](#i-2-A..i-2-C). - (j) **Affordable housing program—** - (1) **In general—** Pursuant to regulations promulgated by the [Director](/usc/12/1422.md?p=11), each [Bank](/usc/12/1422.md?p=1-A) shall establish an Affordable Housing Program to subsidize the interest rate on advances to [members](/usc/12/1422.md?p=3) engaged in lending for long term, low- and moderate-income, [owner](/usc/12/4146.md?p=2)-occupied and affordable rental housing at subsidized interest rates. - (2) **Standards—** The [Board](/usc/12/221a.md?p=a)’s[^2] regulations shall permit [Bank](/usc/12/1422.md?p=1-A) [members](/usc/12/1422.md?p=3) to use subsidized advances received from the [Banks](/usc/12/221a.md?p=a) to— - (A) finance homeownership by [families](/usc/12/1715z–1.md?p=j-2-A) with incomes at or below 80 percent of the median income for the area; - (B) finance the purchase, construction, or rehabilitation of rental housing, at least 20 percent of the units of which will be occupied by and affordable for [very low-income households](#j-13-B) for the [remaining useful life](/usc/12/4112.md?p=c-1) of such housing or the [mortgage](/usc/12/1707.md?p=a) term; or - (C) during the 2-year period beginning on July 30, 2008, use such percentage as the [Director](/usc/12/1422.md?p=11) may by regulation establish of any subsidized advances set aside to finance homeownership under [subparagraph (A)](#j-2-A) to refinance loans that are secured by a [first mortgage](/usc/12/1707.md?p=a) on a primary residence of any [family](/usc/12/1715z–1.md?p=j-2-A) having an income at or below 80 percent of the median income for the area. - (3) **Priorities for making advances—** In using advances authorized under [paragraph (1)](#j-1), each [Bank](/usc/12/1422.md?p=1-A) [member](/usc/12/1422.md?p=3) shall give priority to qualified projects such as the following: - (A) purchase of homes by [families](/usc/12/1715z–1.md?p=j-2-A) whose income is 80 percent or less of the median income for the area, - (B) purchase or rehabilitation of housing owned or held by the United States Government or any [agency](/usc/12/1422.md?p=12) or instrumentality of the United States; and - (C) purchase or rehabilitation of housing sponsored by any [nonprofit organization](/usc/12/1821.md?p=w-2-B), any [State](/usc/12/1422.md?p=2) or political subdivision of any [State](/usc/12/1422.md?p=2), any local housing authority or [State](/usc/12/1422.md?p=2) housing finance [agency](/usc/12/1422.md?p=12). - (4) **Report—** Each [member](/usc/12/1422.md?p=3) receiving advances under this program shall report annually to the [Bank](/usc/12/1422.md?p=1-A) making such advances concerning the [member](/usc/12/1422.md?p=3)’s use of advances received under this program. - (5) **Contribution to program—** Each [Bank](/usc/12/1422.md?p=1-A) shall annually contribute the percentage of its annual [net earnings](/usc/12/1441.md?p=k-2) prescribed in the following subparagraphs to support subsidized advances through the Affordable Housing Program: - (A) In 1990, 1991, 1992, and 1993, 5 percent of the preceding year’s [net income](/usc/12/1441a–1.md?p=4), or such prorated sums as may be required to assure that the aggregate contribution of all the [Banks](/usc/12/221a.md?p=a) shall not be less than $50,000,000 for each such year. - (B) In 1994, 6 percent of the preceding year’s [net income](/usc/12/1441a–1.md?p=4), or such prorated sum as may be required to assure that the aggregate contribution of the [Banks](/usc/12/221a.md?p=a) shall not be less than $75,000,000 for such year. - (C) In 1995, and subsequent years, 10 percent of the preceding year’s [net income](/usc/12/1441a–1.md?p=4), or such prorated sums as may be required to assure that the aggregate contribution of the [Banks](/usc/12/221a.md?p=a) shall not be less than $100,000,000 for each such year. - (6) **Grounds for suspending contributions—** - (A) **In general—** If a [Bank](/usc/12/1422.md?p=1-A) finds that the payments required under this paragraph are contributing to the financial instability of such [Bank](/usc/12/1422.md?p=1-A), it may apply to the [Director](/usc/12/1422.md?p=11) for a temporary suspension of such payments. - (B) **Financial instability—** In determining the financial instability of a [Bank](/usc/12/1422.md?p=1-A), the [Director](/usc/12/1422.md?p=11) shall consider such factors as (i) whether the [Bank](/usc/12/1422.md?p=1-A)’s earnings are severely depressed, (ii) whether there has been a substantial decline in membership [capital](/usc/12/51c.md), and (iii) whether there has been a substantial reduction in advances outstanding. - (C) **Review—** The [Director](/usc/12/1422.md?p=11) shall review the application and any supporting financial data and issue a written decision approving or disapproving such application. The [Board](/usc/12/221a.md?p=a)’s[^2] decision shall be accompanied by specific findings and reasons for its action. - (D) **Monitoring suspension—** If the [Director](/usc/12/1422.md?p=11) grants a suspension, it shall specify the period of time such suspension shall remain in effect and shall continue to monitor the [Bank](/usc/12/1422.md?p=1-A)’s financial condition during such suspension. - (E) **Limitations on grounds for suspension—** The [Director](/usc/12/1422.md?p=11) shall not suspend payments to the Affordable Housing Program if the [Bank](/usc/12/1422.md?p=1-A)’s reduction in earnings is a result of (i) a change in the terms for advances to [members](/usc/12/1422.md?p=3) which is not justified by market conditions, (ii) inordinate operating and administrative expenses, or (iii) mismanagement. - (F) **Congressional notification and action—** The [Director](/usc/12/1422.md?p=11) shall notify the Committee on Banking, Finance and Urban Affairs of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate not less than 60 days before such suspension takes effect. Such suspension shall become effective unless a joint resolution is enacted disapproving such suspension. - (7) **Failure to use amounts for affordable housing—** If any [Bank](/usc/12/1422.md?p=1-A) fails to utilize or commit the full amount provided in this subsection in any year, 90 percent of the amount that has not been utilized or committed in that year shall be deposited by the [Bank](/usc/12/1422.md?p=1-A) in an Affordable Housing Reserve [Fund](/usc/12/4702.md?p=10) administered by the [Director](/usc/12/1422.md?p=11). The 10 percent of the unutilized and uncommitted amount retained by a [Bank](/usc/12/1422.md?p=1-A) should be fully utilized or committed by that [Bank](/usc/12/1422.md?p=1-A) during the following year and any remaining portion must be deposited in the Affordable Housing Reserve [Fund](/usc/12/4702.md?p=10). Under regulations established by the [Director](/usc/12/1422.md?p=11), [funds](/usc/12/4702.md?p=10) from the Affordable Housing Reserve [Fund](/usc/12/4702.md?p=10) may be made available to any [Bank](/usc/12/1422.md?p=1-A) to meet additional affordable housing needs in such [Bank](/usc/12/1422.md?p=1-A)’s [district](/usc/12/221a.md?p=a) pursuant to this section. - (8) **Net earnings—** The [net earnings](/usc/12/1441.md?p=k-2) of any [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) shall be determined for purposes of this paragraph— - (A) after reduction for any payment required under section [1441](/usc/12/1441.md) or [1441b](/usc/12/1441b.md) of this title; and - (B) before declaring any dividend under [section 1436 of this title](/usc/12/1436.md). - (9) **Regulations—** The [Director](/usc/12/1422.md?p=11) shall promulgate regulations to implement this subsection. Such regulations shall, at a minimum— - (A) specify activities eligible to receive subsidized advances from the [Banks](/usc/12/221a.md?p=a) under this program; - (B) specify priorities for the use of such advances; - (C) ensure that advances made under this program will be used only to assist projects for which adequate long-term monitoring is available to guarantee that affordability standards and other requirements of this subsection are satisfied; - (D) ensure that a preponderance of assistance provided under this subsection is ultimately received by low- and moderate-income households; - (E) ensure that subsidies provided by [Banks](/usc/12/221a.md?p=a) to [member](/usc/12/1422.md?p=3) institutions under this program are passed on to the ultimate borrower; - (F) establish uniform standards for subsidized advances under this program and subsidized lending by [member](/usc/12/1422.md?p=3) institutions supported by such advances, [including](/usc/12/25b.md?p=a-3) maximum subsidy and risk limitations for different categories of loans made under this subsection; and - (G) coordinate activities under this subsection with other Federal or federally-subsidized affordable housing activities to the maximum extent possible. - (10) **Other programs—** No provision of this subsection or [subsection (i)](#i) shall preclude any [Bank](/usc/12/1422.md?p=1-A) from establishing additional community investment cash advance programs or contributing additional sums to the Affordable Housing Reserve [Fund](/usc/12/4702.md?p=10). - (11) **Advisory Council—** Each [Bank](/usc/12/1422.md?p=1-A) shall appoint an Advisory Council of 7 to 15 [persons](/usc/12/5481.md?p=19) drawn from community and [nonprofit organizations](/usc/12/1821.md?p=w-2-B) actively involved in providing or promoting low- and moderate-income housing in its [district](/usc/12/221a.md?p=a). The Advisory Council shall meet with representatives of the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) of the [Bank](/usc/12/1422.md?p=1-A) quarterly to advise the [Bank](/usc/12/1422.md?p=1-A) on low- and moderate-income housing programs and needs in the [district](/usc/12/221a.md?p=a) and on the utilization of the advances for these purposes. Each Advisory Council established under this paragraph shall submit to the [Director](/usc/12/1422.md?p=11) at least annually its analysis of the low-income housing activity of the [Bank](/usc/12/1422.md?p=1-A) by which it is appointed. - (12) **Reports to Congress—** - (A) The [Director](/usc/12/1422.md?p=11) shall monitor and report annually to the Congress and the Advisory Council for each [Bank](/usc/12/1422.md?p=1-A) the support of low-income housing and community development by the [Banks](/usc/12/221a.md?p=a) and the utilization of advances for these purposes. - (B) The analyses submitted by the Advisory Councils to the [Director](/usc/12/1422.md?p=11) under [paragraph (11)](#j-11) shall be included as part of the report required by this paragraph. - (C) **Reports.—** The [Director](/usc/12/1422.md?p=11) shall annually report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives on the collateral pledged to the [Banks](/usc/12/221a.md?p=a), [including](/usc/12/25b.md?p=a-3) an analysis of collateral by type and by [Bank](/usc/12/1422.md?p=1-A) [district](/usc/12/221a.md?p=a). - (D) **Submission to congress.—** The [Director](/usc/12/1422.md?p=11) shall submit the reports under subparagraphs [(A)](#j-12-A) and [(C)](#j-12-C) to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives, not later than 180 days after July 30, 2008. - (13) **Definitions—** For purposes of this subsection— - (A) **Low- or moderate-income household—** The term “low- or moderate-income household” means any household which has an income of 80 percent or less of the area median. - (B) **Very low-income household—** The term “very low-income household” means any household that has an income of 50 percent or less of the area median. - (C) **Low- or moderate-income neighborhood—** The term “low- or moderate-income neighborhood” means any neighborhood in which 51 percent or more of the households are [low- or moderate-income households](#j-13-A). - (D) **Affordable for very-low income households—** For purposes of [paragraph (2)(B)](#j-2-B) the term “affordable for very-low income households” means that rents charged to tenants for units made available for occupancy by low-income [families](/usc/12/1715z–1.md?p=j-2-A) shall not exceed 30 percent of the adjusted income of a [family](/usc/12/1715z–1.md?p=j-2-A) whose income equals 50 percent of the income for the area (as determined by the Secretary of Housing and Urban Development) with adjustment for [family](/usc/12/1715z–1.md?p=j-2-A) size. - (k) **Public use database—** - (1) **Data—** Each [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) shall provide to the [Director](/usc/12/1422.md?p=11), in a form determined by the [Director](/usc/12/1422.md?p=11), census tract level data relating to [mortgages](/usc/12/1707.md?p=a) purchased, if any, [including](/usc/12/25b.md?p=a-3)— - (A) data consistent with that reported under [section 4543 of this title](/usc/12/4543.md); - (B) data elements required to be reported under the [Home Mortgage](/usc/12/1422.md?p=5) Disclosure Act of 1975 [[12 U.S.C. 2801](/usc/12/2801.md) et seq.]; and - (C) any other data elements that the [Director](/usc/12/1422.md?p=11) considers appropriate. - (2) **Public use database—** - (A) **In general—** The [Director](/usc/12/1422.md?p=11) shall make available to the public, in a form that is useful to the public ([including](/usc/12/25b.md?p=a-3) forms accessible electronically), and to the extent practicable, the data provided to the [Director](/usc/12/1422.md?p=11) under [paragraph (1)](#k-1). - (B) **Proprietary information—** Not withstanding [subparagraph (A)](#k-2-A), the [Director](/usc/12/1422.md?p=11) may not provide public access to, or disclose to the public, any information required to be submitted under this subsection that the [Director](/usc/12/1422.md?p=11) determines is proprietary or that would provide personally identifiable information and that is not otherwise publicly accessible through other forms, unless the [Director](/usc/12/1422.md?p=11) determines that it is in the public interest to provide such information. # [§1430a. Omitted — omitted] # §1430b. Advances to nonmember mortgagee; terms and conditions - (a) **In general—** Each [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) is authorized to make advances to nonmember [mortgagees](/usc/12/1707.md?p=b) approved under title II of the National Housing Act [[12 U.S.C. 1707](/usc/12/1707.md) et seq.]. Such [mortgagees](/usc/12/1707.md?p=b) must be chartered institutions having succession and subject to the inspection and supervision of some governmental [agency](/usc/12/1422.md?p=12), and whose principal activity in the [mortgage](/usc/12/1707.md?p=a) field must consist of lending their own [funds](/usc/12/4702.md?p=10). Such advances shall not be subject to the other provisions and restrictions of this chapter, but shall be made upon the security of insured [mortgages](/usc/12/1707.md?p=a), insured under title II of the National Housing Act. Advances made under the terms of this section shall be at such rates of interest and upon such terms and conditions as shall be determined by the [Director](/usc/12/1422.md?p=11), but no advance may be for an amount in excess of 90 per centum of the [unpaid principal](/usc/12/1422.md?p=6) of the [mortgage](/usc/12/1707.md?p=a) loan given as security. - (b) **Exception—** An advance made to a [State](/usc/12/1422.md?p=2) housing finance [agency](/usc/12/1422.md?p=12) for the purpose of facilitating [mortgage](/usc/12/1707.md?p=a) lending that benefits individuals and [families](/usc/12/1715z–1.md?p=j-2-A) that meet the income requirements set forth in section [142(d)](/usc/26/142.md?p=d) or [143(f)](/usc/26/143.md?p=f) of title 26, need not be collateralized by a [mortgage](/usc/12/1707.md?p=a) insured under title II of the National Housing Act [[12 U.S.C. 1707](/usc/12/1707.md) et seq.] or otherwise, if— - (1) such advance otherwise meets the requirements of this subsection; and - (2) such advance meets the requirements of [section 1430(a) of this title](/usc/12/1430.md?p=a), and any [real estate](/usc/12/1715z–20.md?p=b-2) collateral for such loan comprises single [family](/usc/12/1715z–1.md?p=j-2-A) or multifamily [residential mortgages](/usc/12/1717.md?p=b-7-A-ii). # §1430c. Housing goals - (a) **In general—** The [Director](/usc/12/1422.md?p=11) shall establish housing goals with respect to the purchase of [mortgages](/usc/12/1707.md?p=a), if any, by the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A). Such goals shall be consistent with the goals established under [sections 4561 through 4564](/usc/12/4561..4564.md) of this title. - (b) **Considerations—** In establishing the goals required by [subsection (a)](#a), the [Director](/usc/12/1422.md?p=11) shall consider the unique mission and ownership structure of the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A). - (c) **Transition period—** To facilitate an orderly transition, the [Director](/usc/12/1422.md?p=11) shall establish interim target goals for purposes of this section for each of the 2 calendar years following July 30, 2008. - (d) **Monitoring and enforcement of goals—** The requirements of [section 4566](/usc/12/4566.md)[^1] of this title, shall apply to this section, in the same manner and to the same extent as that section applies to the Federal housing enterprises. - (e) **Annual report—** The [Director](/usc/12/1422.md?p=11) shall annually report to Congress on the performance of the [Banks](/usc/12/221a.md?p=a) in meeting the goals established under this section. # §1431. Powers and duties of banks - (a) **Borrowing money; issuing bonds and debentures; general powers—** Each [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) shall have power, subject to rules and regulations prescribed by the [Director](/usc/12/1422.md?p=11), to borrow and give security therefor and to pay interest thereon, to issue debentures, bonds, or other obligations upon such terms and conditions as the [Director](/usc/12/1422.md?p=11) may approve, and to do all things necessary for carrying out the provisions of this chapter and all things incident thereto. - (b) **Issuance of consolidated Federal Home Loan Bank debentures; restrictions—** The [Office](/usc/12/2279bb.md?p=4) of Finance, as agent for the [Banks](/usc/12/221a.md?p=a), may issue consolidated [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) debentures which shall be the joint and several obligations of all [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) organized and existing under this chapter, in order to provide [funds](/usc/12/4702.md?p=10) for any such [bank](/usc/12/1422.md?p=1-A) or [banks](/usc/12/221a.md?p=a), and such debentures shall be issued upon such terms and conditions as such [Office](/usc/12/2279bb.md?p=4) may prescribe. No such debentures shall be issued at any time if any of the assets of any [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) are pledged to secure any debts or subject to any lien, and neither the [Office](/usc/12/2279bb.md?p=4) of Finance nor any [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) shall have power to pledge any of the assets of any [Federal Home Loan Bank](/usc/12/1422.md?p=1-A), or voluntarily to permit any lien to attach to the same while any of such debentures so issued are outstanding. The debentures issued under this section and outstanding shall at no time exceed five times the total paid-in [capital](/usc/12/51c.md) of all the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) as of the time of the issue of such debentures. It shall be the duty of the [Office](/usc/12/2279bb.md?p=4) of Finance not to issue debentures under this section in excess of the notes or obligations of [member](/usc/12/1422.md?p=3) institutions held and secured under [section 1430(a) of this title](/usc/12/1430.md?p=a) by all the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A). - (c) **Issuance of Federal Home Loan Bank bonds—** At any time that no debentures are outstanding under this chapter, or in order to refund all outstanding consolidated debentures issued under this section, the [Office](/usc/12/2279bb.md?p=4) of Finance, as agent for the [Banks](/usc/12/221a.md?p=a), may issue consolidated [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) bonds which shall be the joint and several obligations of all the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A), and shall be secured and be issued upon such terms and conditions as such [Office](/usc/12/2279bb.md?p=4) may prescribe. - (d) **Additional or substituted collateral on adjustment of equities—** The [Director](/usc/12/1422.md?p=11) shall have full power to require any [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) to [deposit](/usc/12/5301.md?p=18-A) additional collateral or to make substitutions of collateral or to adjust equities between the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A). - (e) **Acceptance of deposits; restrictions on transaction of banking business; collection and settlement of checks, drafts, etc.; charges; rules and regulations—** - (1) Each [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) shall have power to accept [deposits](/usc/12/5301.md?p=18-A) made by [members](/usc/12/1422.md?p=3) of such [bank](/usc/12/1422.md?p=1-A) or by any other [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) or other instrumentality of the United States, upon such terms and conditions as the [Director](/usc/12/1422.md?p=11) may prescribe, but no [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) shall transact any banking or other business not incidental to activities authorized by this chapter. - (2) - (A) The [Director](/usc/12/1422.md?p=11) may, subject to such rules and regulations, [including](/usc/12/25b.md?p=a-3) definitions of terms used in this paragraph, as the [Director](/usc/12/1422.md?p=11) shall from time to time prescribe, authorize [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) to be drawees of, and to engage in, or be agents or intermediaries for, or otherwise [participate](/usc/12/2206a.md?p=a-1) or assist in, the collection and settlement of ([including](/usc/12/25b.md?p=a-3) presentment, clearing, and payment of, and remitting for), checks, drafts, or any other negotiable or nonnegotiable items or instruments of payment drawn on or issued by [members](/usc/12/1422.md?p=3) of any [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) or by institutions which are eligible to make application to become [members](/usc/12/1422.md?p=3) pursuant to [section 1424 of this title](/usc/12/1424.md), and to have such incidental powers as the [Director](/usc/12/1422.md?p=11) shall find necessary for the exercise of any such authorization. - (B) A [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) shall make charges, to be determined and regulated by the [Director](/usc/12/1422.md?p=11) consistent with the principles set forth in [section 248a(c) of this title](/usc/12/248a.md?p=c), or utilize the services of, or act as agent for, or be a [member](/usc/12/1422.md?p=3) of, a Federal [Reserve bank](/usc/12/221a.md?p=a), clearinghouse, or any other public or private [financial institution](/usc/12/1715k.md?p=h-1-C) or other [agency](/usc/12/1422.md?p=12), in the exercise of any powers or functions pursuant to this paragraph. - (C) The [Director](/usc/12/1422.md?p=11) is authorized, with respect to [participation](/usc/12/2206a.md?p=a-1) in the collection and settlement of any items by [Federal Home Loan Banks](/usc/12/1422.md?p=1-A), and with respect to the collection and settlement ([including](/usc/12/25b.md?p=a-3) payment by the payor institution) of items payable by Federal savings and loan [associations](/usc/12/1828.md?p=s-4-E-i) and Federal mutual savings [banks](/usc/12/221a.md?p=a), to prescribe rules and regulations regarding the rights, powers, responsibilities, duties, and liabilities, [including](/usc/12/25b.md?p=a-3) standards relating thereto, of such [Federal Home Loan Banks](/usc/12/1422.md?p=1-A), [associations](/usc/12/1828.md?p=s-4-E-i), or [banks](/usc/12/221a.md?p=a) and other parties to any such items or their collection and settlement. In prescribing such rules and regulations, the [Director](/usc/12/1422.md?p=11) may adopt or apply, in whole or in part, general banking usage and practices, and, in instances or respects in which they would otherwise not be applicable, Federal Reserve regulations and operating letters, the Uniform Commercial Code, and clearinghouse rules. - (f) **Rediscount of notes held by other banks; purchase of bonds of other banks—** The [Director](/usc/12/1422.md?p=11) is authorized and empowered to permit or to require [Federal Home Loan Banks](/usc/12/1422.md?p=1-A), upon such terms and conditions as the [Director](/usc/12/1422.md?p=11) may prescribe, to rediscount the discounted notes of [members](/usc/12/1422.md?p=3) held by other [Federal Home Loan Banks](/usc/12/1422.md?p=1-A), or to make loans to, or make [deposits](/usc/12/5301.md?p=18-A) with, such other [Federal Home Loan Banks](/usc/12/1422.md?p=1-A), or to purchase any bonds or debentures issued under this section. - (g) **Reserves—** Each [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) shall at all times have at least an amount equal to the current [deposits](/usc/12/5301.md?p=18-A) received from its [members](/usc/12/1422.md?p=3) invested in (1) obligations of the United States, (2) [deposits](/usc/12/5301.md?p=18-A) in [banks](/usc/12/221a.md?p=a) or trust [companies](/usc/12/24a.md?p=g-1), (3) advances with a maturity of not to exceed five years which are made to [members](/usc/12/1422.md?p=3), upon such terms and conditions as the [Director](/usc/12/1422.md?p=11) may prescribe, and (4) advances with a maturity of not to exceed five years which are made to [members](/usc/12/1422.md?p=3) whose creditor liabilities (not [including](/usc/12/25b.md?p=a-3) advances from the [Federal home loan bank](/usc/12/1422.md?p=1-A)) do not exceed 5 per centum of their net assets, and which may be made without the security of [home mortgages](/usc/12/1422.md?p=5) or other security, upon such terms and conditions as the [Director](/usc/12/1422.md?p=11) may prescribe. - (h) **Investment of surplus funds—** Such part of the assets of each [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) (except reserves and amounts provided for in [subsection (g)](#g)) as are not required for advances to [members](/usc/12/1422.md?p=3), may be invested, to such extent as the [bank](/usc/12/1422.md?p=1-A) may deem desirable and subject to such regulations, restrictions, and limitations as may be prescribed by the [Director](/usc/12/1422.md?p=11), in obligations of the United States, in obligations, [participations](/usc/12/2206a.md?p=a-1), or other instruments of or issued by the Federal National [Mortgage](/usc/12/1707.md?p=a) [Association](/usc/12/1828.md?p=s-4-E-i) or the Government National [Mortgage](/usc/12/1707.md?p=a) [Association](/usc/12/1828.md?p=s-4-E-i), in [mortgages](/usc/12/1707.md?p=a), obligations, or other securities which are or ever have been sold by the Federal Home Loan [Mortgage](/usc/12/1707.md?p=a) [Corporation](/usc/12/2277a.md?p=2) pursuant to [section 1454](/usc/12/1454.md) or [section 1455 of this title](/usc/12/1455.md), in the stock of the Federal National [Mortgage](/usc/12/1707.md?p=a) [Association](/usc/12/1828.md?p=s-4-E-i), in stock, obligations, or other securities of any small business investment [company](/usc/12/24a.md?p=g-1) formed pursuant to [section 681 of title 15](/usc/15/681.md), for the purpose of aiding [members](/usc/12/1422.md?p=3) of the [Federal Home Loan Bank System](/usc/12/1422.md?p=1-B), and in such securities as fiduciary and trust [funds](/usc/12/4702.md?p=10) may be invested in under the laws of the [State](/usc/12/1422.md?p=2) in which the [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) is located. - (i) **Treasury purchase of banks’ obligations; exercise of authority—** The Secretary of the Treasury is authorized in his discretion to purchase any obligations issued pursuant to this section, as heretofore, now, or hereafter in force and for such purpose the Secretary of the Treasury is authorized to use as a public-debt transaction the proceeds of the sale of any securities hereafter issued under [chapter 31](/usc/31/chstIII-ch31.md) of title 31, as now or hereafter in force, and the purposes for which securities may be issued under [chapter 31](/usc/31/chstIII-ch31.md) of title 31, as now or hereafter in force, are extended to include such purchases. The Secretary of the Treasury may, at any time, sell, upon such terms and conditions and at such price or prices as he shall determine, any of the obligations acquired by him under this subsection. All redemptions, purchases, and sales by the Secretary of the Treasury of such obligations under this subsection shall be treated as public-debt transactions of the United States. The Secretary of the Treasury shall not at any time purchase any obligations under this paragraph if such purchase would increase the aggregate principal amount of his then outstanding holdings of such obligations under this paragraph to an amount greater than $4,000,000,000. Each purchase of obligations by the Secretary of the Treasury under this subsection shall be upon terms and conditions as shall be determined by the Secretary of the Treasury and shall bear such rate of interest as may be determined by the Secretary of the Treasury taking into consideration the current average market yield for the month preceding the month of such purchase on outstanding marketable obligations of the United States. In addition to obligations authorized to be purchased by the preceding paragraph, the Secretary of the Treasury is authorized to purchase any obligations issued pursuant to this section in amounts not to exceed $2,000,000,000. The authority provided in this paragraph shall expire August 10, 1975. Notwithstanding the foregoing, the authority provided in this subsection may be exercised during any calendar quarter beginning after October 28, 1974, only if the Secretary of the Treasury and the Chairperson of the [Director](/usc/12/1422.md?p=11)[^1] certify to the Congress that (1) alternative means cannot be effectively employed to permit [members](/usc/12/1422.md?p=3) of the [Federal Home Loan Bank System](/usc/12/1422.md?p=1-B) to continue to supply reasonable amounts of [funds](/usc/12/4702.md?p=10) to the [mortgage](/usc/12/1707.md?p=a) market, and (2) the ability to supply such [funds](/usc/12/4702.md?p=10) is substantially impaired because of monetary stringency and a high level of interest rates. Any [funds](/usc/12/4702.md?p=10) borrowed under this subsection shall be repaid by the Home Loan [Banks](/usc/12/221a.md?p=a) at the earliest practicable date. - (j) **Audits—** Notwithstanding the provisions of section 9105(a)(1)(B)[^2] of [title 31](/usc/31.md), audits by the Government Accountability [Office](/usc/12/2279bb.md?p=4) of the financial transactions of a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) shall not be limited to periods during which Government [capital](/usc/12/51c.md) has been invested therein. The provisions of sections [9107(c)(2)](/usc/31/9107.md?p=c-2) and [9108(d)(1)](/usc/31/9108.md?p=d-1) of title 31 shall not apply to any [Federal Home Loan Bank](/usc/12/1422.md?p=1-A). - (k) **Bank loans to the Deposit Insurance Fund—** - (1) **Loans authorized—** Subject to [paragraph (3)](#k-3), the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) may, upon the request of the Federal [Deposit](/usc/12/5301.md?p=18-A) Insurance [Corporation](/usc/12/2277a.md?p=2), make loans to such [Corporation](/usc/12/2277a.md?p=2) for the use of the [Deposit Insurance Fund](/usc/12/1813.md?p=y-1). - (2) **Liability of the Fund—** Any loan by a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) pursuant to [paragraph (1)](#k-1) shall be a direct liability of the [Deposit Insurance Fund](/usc/12/1813.md?p=y-1). - (3) **Interest on and security for such loans—** Any loan by a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) pursuant to [paragraph (1)](#k-1) shall— - (A) bear a rate of interest not less than such [Bank](/usc/12/1422.md?p=1-A)’s current marginal cost of [funds](/usc/12/4702.md?p=10), taking into account the maturities involved; and - (B) be adequately secured. - (l) **Temporary authority of Treasury to purchase obligations; conditions—** - (1) **Authority to purchase—** - (A) **General authority—** In addition to the authority under [subsection (i)](#i) of this section, the Secretary of the Treasury is authorized to purchase any obligations issued by any [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) under any section of this chapter, on such terms and conditions as the Secretary may determine and in such amounts as the Secretary may determine. Nothing in this subsection requires a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) to issue obligations or securities to the Secretary without mutual agreement between the Secretary and the [Federal Home Loan Bank](/usc/12/1422.md?p=1-A). Nothing in this subsection permits or authorizes the Secretary, without the agreement of the [Federal Home Loan Bank](/usc/12/1422.md?p=1-A), to engage in open market purchases of the common securities of any [Federal Home Loan Bank](/usc/12/1422.md?p=1-A). - (B) **Emergency determination required—** In connection with any use of this authority, the Secretary must determine that such actions are necessary to— - (i) provide stability to the financial markets; - (ii) prevent disruptions in the availability of [mortgage](/usc/12/1707.md?p=a) finance; and - (iii) protect the taxpayer. - (C) **Considerations—** To protect the taxpayers, the Secretary of the Treasury shall take into consideration the following in connection with exercising the authority contained in this paragraph: - (i) The need for preferences or priorities regarding payments to the Government. - (ii) Limits on maturity or disposition of obligations or securities to be purchased. - (iii) The [Federal Home Loan Bank](/usc/12/1422.md?p=1-A)’s plan for the orderly resumption of private market funding or [capital](/usc/12/51c.md) market access. - (iv) The probability of the [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) fulfilling the terms of any such obligation or other security, [including](/usc/12/25b.md?p=a-3) repayment. - (v) The need to maintain the [Federal Home Loan Bank](/usc/12/1422.md?p=1-A)’s status as a private shareholder-owned [company](/usc/12/24a.md?p=g-1). - (vi) Restrictions on the use of [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) resources, [including](/usc/12/25b.md?p=a-3) limitations on the payment of dividends and executive compensation and any such other terms and conditions as appropriate for those purposes. - (D) **Reports to Congress—** Upon exercise of this authority, the Secretary shall report to the Committees on the Budget, Financial Services, and Ways and Means of the House of Representatives and the Committees on the Budget, Finance, and Banking, Housing, and Urban Affairs of the Senate as to the necessity for the purchase and the determinations made by the Secretary under [subparagraph (B)](#l-1-B) and with respect to the considerations required under [subparagraph (C)](#l-1-C), and the size, terms, and probability of repayment or fulfillment of other terms of such purchase. - (2) **Rights; sale of obligations and securities—** - (A) **Exercise of rights—** The Secretary of the Treasury may, at any time, exercise any rights received in connection with such purchases. - (B) **Sale of obligations—** The Secretary of the Treasury may, at any time, subject to the terms of the security or otherwise upon terms and conditions and at prices determined by the Secretary, sell any obligation acquired by the Secretary under this subsection. - (C) **Deficit reduction—** The Secretary of the Treasury shall [deposit](/usc/12/5301.md?p=18-A) in the General [Fund](/usc/12/4702.md?p=10) of the Treasury any amounts received by the Secretary from the sale of any obligation acquired by the Secretary under this subsection, where such amounts shall be— - (i) dedicated for the sole purpose of deficit reduction; and - (ii) prohibited from use as an offset for other spending increases or revenue reductions. - (D) **Application of sunset to purchased obligations—** The authority of the Secretary of the Treasury to hold, exercise any rights received in connection with, or sell, any obligations purchased is not subject to the provisions of [paragraph (4)](#l-4). - (3) **Funding—** For the purpose of the authorities granted in this subsection, the Secretary of the Treasury may use the proceeds of the sale of any securities issued under [chapter 31](/usc/31/chstIII-ch31.md) of title 31, and the purposes for which securities may be issued under [chapter 31](/usc/31/chstIII-ch31.md) of title 31 are extended to include such purchases and the exercise of any rights in connection with such purchases. Any [funds](/usc/12/4702.md?p=10) expended for the purchase of, or modifications to, obligations and securities, or the exercise of any rights received in connection with such purchases under this subsection shall be deemed appropriated at the time of such purchase, modification, or exercise. - (4) **Termination of authority—** The authority under this [subsection (l)](#l), with the exception of paragraphs (2) and (3) of this subsection, shall expire December 31, 2009. - (5) **Authority of the Director with respect to executive compensation—** The [Director](/usc/12/1422.md?p=11) shall have the power to approve, disapprove, or modify the executive compensation of the [Federal Home Loan Bank](/usc/12/1422.md?p=1-A), as defined under Regulation S-K, [17 C.F.R. 229](/cfr/17/229.md). # §1432. Incorporation of banks; corporate powers; housing project loans - (a) The [directors](/usc/12/1422.md?p=11) of each [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) shall, in accordance with such rules and regulations as the [Director](/usc/12/1422.md?p=11) may prescribe, make and file with the [Director](/usc/12/1422.md?p=11) at the earliest practicable date after the establishment of such [bank](/usc/12/1422.md?p=1-A), an organization certificate which shall contain such information as the [Director](/usc/12/1422.md?p=11) may require. Upon the making and filing of such organization certificate with the [Director](/usc/12/1422.md?p=11), such [bank](/usc/12/1422.md?p=1-A) shall become, as of the date of the execution of its organization certificate, a body corporate, and as such and in its name as designated by the [Director](/usc/12/1422.md?p=11) it shall have power to adopt, alter, and use a corporate seal; to make contracts; to purchase or lease and hold or dispose of such [real estate](/usc/12/1715z–20.md?p=b-2) as may be necessary or convenient for the transaction of its business; to sue and be sued, to complain and to defend, in any court of competent jurisdiction, [State](/usc/12/1422.md?p=2) or Federal; to select, employ, and fix the compensation of such officers, employees, attorneys, and agents as shall be necessary for the transaction of its business,;[^1] to define their duties, require bonds of them and fix the penalties thereof, and to dismiss at pleasure such officers, employees, attorneys, and agents; and, by the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) of the [bank](/usc/12/1422.md?p=1-A), to prescribe, amend, and repeal by-laws governing the manner in which its affairs may be administered, consistent with applicable laws and regulations, as administered by the [Director](/usc/12/1422.md?p=11). No officer, employee, attorney, or agent of a [Federal home loan bank](/usc/12/1422.md?p=1-A) who receives compensation, may be a [member](/usc/12/1422.md?p=3) of the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11). Each such [bank](/usc/12/1422.md?p=1-A) shall have all such incidental powers, not inconsistent with the provisions of this chapter, as are customary and usual in [corporations](/usc/12/2277a.md?p=2) generally. - (b) Subject to such regulations as may be prescribed by the [Director](/usc/12/1422.md?p=11), one or more [Federal home loan banks](/usc/12/1422.md?p=1-A) may [acquire](/usc/12/1467a.md?p=a-1-J), hold, or dispose of, in whole or in part, or facilitate such acquisition, holding, or disposition by [members](/usc/12/1422.md?p=3) of any such [bank](/usc/12/1422.md?p=1-A) of, housing project loans, or interests therein, having the benefit of any guaranty under [section 2181 of title 22](/usc/22/2181.md), as now or hereafter in effect, or loans, or interests therein, having the benefit of any guaranty under [section 2184 of title 22](/usc/22/2184.md) or any commitment or agreement with respect to such loans, or interests therein, made pursuant to either of such sections. This authority extends to the acquisition, holding, and disposition of loans, or interests therein, having the benefit of any guaranty under section [2181](/usc/22/2181.md) or [2182](/usc/22/2182.md) of title 22 or such sections as hereafter amended or extended, or of any commitment or agreement for any such guaranty. # §1433. Exemption from taxation; obligations acceptable as credit on debt of home owner Any and all notes, debentures, bonds, and other such obligations issued by any [bank](/usc/12/1422.md?p=1-A), and consolidated [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) bonds and debentures, shall be exempt both as to principal and interest from all taxation (except surtaxes, estate, inheritance, and gift taxes) now or hereafter imposed by the United States, by any Territory, dependency, or possession thereof, or by any [State](/usc/12/1422.md?p=2), county, municipality, or local taxing authority. The [bank](/usc/12/1422.md?p=1-A), [including](/usc/12/25b.md?p=a-3) its franchise, its [capital](/usc/12/51c.md), reserves, and surplus, its advances, and its income, shall be exempt from all taxation now or hereafter imposed by the United States, by any Territory, dependency, or possession thereof, or by any [State](/usc/12/1422.md?p=2), county, municipality, or local taxing authority; except that in[^1] any real property of the [bank](/usc/12/1422.md?p=1-A) shall be subject to [State](/usc/12/1422.md?p=2), Territorial, county, municipal, or local taxation to the same extent according to its value as other real property is taxed. The notes, debentures, and bonds issued by any [bank](/usc/12/1422.md?p=1-A), with unearned coupons attached, shall be accepted at par by such [bank](/usc/12/1422.md?p=1-A) in payment of or as a [credit](/usc/12/5481.md?p=7) against the obligation of any home-[owner](/usc/12/4146.md?p=2) debtor of such [bank](/usc/12/1422.md?p=1-A). # §1434. Depositaries of public money; financial agents When designated for that purpose by the Secretary of the Treasury, each [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) shall be a depositary of public money, except receipts from customs, under such regulations as may be prescribed by said Secretary; and it may also be employed as a financial agent of the Government; and it shall perform all such reasonable duties as depositary of public money and financial agent of the Government as may be required of it. # §1435. Obligations as lawful investments; liability of United States for debentures, etc., issued by banks Obligations of the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) issued with the approval of the [Board](/usc/12/221a.md?p=a) or the [Director](/usc/12/1422.md?p=11) under this chapter shall be lawful investments, and may be accepted as security, for all fiduciary, trust, and public [funds](/usc/12/4702.md?p=10) the investment or [deposit](/usc/12/5301.md?p=18-A) of which shall be under the authority or [control](/usc/12/24a.md?p=g-1) of the United States or any officer or officers thereof. The Federal [reserve banks](/usc/12/221a.md?p=a) are authorized to act as depositaries, custodians, and/or fiscal agents for [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) in the general performance of their powers under this chapter. All obligations of [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) shall plainly [state](/usc/12/1422.md?p=2) that such obligations are not obligations of the United States and are not guaranteed by the United States. # §1436. Reserves and dividends; emergency suspensions of requirements - (a) **Accumulation and maintenance of reserves; payment of dividends—** Each [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) may carry to a reserve account from time-to-time such portion of its [net earnings](/usc/12/1441.md?p=k-2) as may be determined by its [board](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11). Each [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) shall establish such additional reserves and/or make such charge-offs on account of depreciation or impairment of its assets as the [Director](/usc/12/1422.md?p=11) shall require from time to time. No dividends shall be paid except out of previously retained earnings or current [net earnings](/usc/12/1441.md?p=k-2) remaining after reductions for all reserves, chargeoffs, purchases of [capital](/usc/12/51c.md) certificates of the Financing [Corporation](/usc/12/2277a.md?p=2), and payments relating to the Funding [Corporation](/usc/12/2277a.md?p=2) required under this chapter have been provided for, other than chargeoffs or expenses incurred by a [Bank](/usc/12/1422.md?p=1-A) in connection with the purchase of [capital stock](/usc/12/51c.md) of the Financing [Corporation](/usc/12/2277a.md?p=2) under [section 1441 of this title](/usc/12/1441.md) or payments relating to the Funding [Corporation](/usc/12/2277a.md?p=2) Principal [Fund](/usc/12/4702.md?p=10) under [section 1441b(e) of this title](/usc/12/1441b.md?p=e). The reserves of each [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) shall be invested, subject to such regulations, restrictions, and limitations as may be prescribed by the [Director](/usc/12/1422.md?p=11), in direct obligations of the United States, in obligations, [participations](/usc/12/2206a.md?p=a-1), or other instruments of or issued by the Federal National [Mortgage](/usc/12/1707.md?p=a) [Association](/usc/12/1828.md?p=s-4-E-i) or the Government National [Mortgage](/usc/12/1707.md?p=a) [Association](/usc/12/1828.md?p=s-4-E-i), in [mortgages](/usc/12/1707.md?p=a), obligations, or other securities which are or ever have been sold by the Federal Home Loan [Mortgage](/usc/12/1707.md?p=a) [Corporation](/usc/12/2277a.md?p=2) pursuant to [section 1454](/usc/12/1454.md) or [section 1455 of this title](/usc/12/1455.md), and in such securities as fiduciary and trust [funds](/usc/12/4702.md?p=10) may be invested in under the laws of the [State](/usc/12/1422.md?p=2) in which the [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) is located. - (b) **Assistance to member institutions in event of severe financial conditions—** Notwithstanding [subsection (a)](#a) or any other provision of this chapter, if the [Director](/usc/12/1422.md?p=11) determines that severe financial conditions exist threatening the stability of [member](/usc/12/1422.md?p=3) institutions, the [Director](/usc/12/1422.md?p=11) may suspend temporarily the requirements of [subsection (a)](#a) that a portion of [net earnings](/usc/12/1441.md?p=k-2) be set aside semiannually by each [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) to a reserve account and permit each [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) to declare and pay dividends out of undivided profits. - (c) **Exception in case of losses in connection with Financing Corporation stock—** - (1) **In general—** Notwithstanding [subsection (a)](#a) of this section, if— - (A) a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) incurs a chargeoff or an expense in connection with such [bank](/usc/12/1422.md?p=1-A)’s investment in the stock of the Financing [Corporation](/usc/12/2277a.md?p=2) under [section 1441 of this title](/usc/12/1441.md); - (B) the [Director](/usc/12/1422.md?p=11) determines there is an extraordinary need for the [member](/usc/12/1422.md?p=3) institutions of the [bank](/usc/12/1422.md?p=1-A) to receive dividends; and - (C) the [bank](/usc/12/1422.md?p=1-A) has reduced all reserves (other than the reserve account required by the first 2 sentences of [subsection (a)](#a)) to zero, the [Director](/usc/12/1422.md?p=11) may authorize such [bank](/usc/12/1422.md?p=1-A) to declare and pay dividends out of undivided profits (as such term is defined in [section 1441(d)(7) of this title](/usc/12/1441.md?p=d-7)) or the reserve account required by the first 2 sentences of [subsection (a)](#a). - (2) **Requirements of section 1441 of this title not affected—** Notwithstanding any payment of dividends by any [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) pursuant to an authorization by the [Director](/usc/12/1422.md?p=11) under [paragraph (1)](#c-1), the applicable provisions of [section 1441 of this title](/usc/12/1441.md) shall continue to apply with respect to such [bank](/usc/12/1422.md?p=1-A), and to such [bank](/usc/12/1422.md?p=1-A)’s investment in the Financing [Corporation](/usc/12/2277a.md?p=2), in the same manner and to the same extent as if such payment had not been made. # [§1437. Repealed. Pub. L. 101–73, title VII, § 703(a), Aug. 9, 1989, 103 Stat. 415 — repealed] # [§1438. Omitted — omitted] # §1438a. Nonadministrative expenses; expenses of studies and investigations On and after July 12, 1960, expenses of the [Board](/usc/12/221a.md?p=a) in making studies or investigations specifically directed by law, or requested by the Congress or either House thereof or by a committee of either House, [including](/usc/12/25b.md?p=a-3) services authorized by [section 3109 of title 5](/usc/5/3109.md), shall be considered as nonadministrative expenses. # [§1439. Repealed. Pub. L. 101–73, title VII, §§ 708, 712, Aug. 9, 1989, 103 Stat. 418, 419 — repealed] # [§1439–1. Repealed. Pub. L. 101–73, title VII, §§ 708, 712, Aug. 9, 1989, 103 Stat. 418, 419 — repealed] # §1439a. Deposits in special fund; availability for all purposes of Federal Home Loan Bank Board and Federal Home Loan Bank Administration All moneys and [funds](/usc/12/4702.md?p=10) heretofore deposited in the Treasury of the United States under the last sentence of [section 1439](/usc/12/1439.md)[^1] of this title ([including](/usc/12/25b.md?p=a-3) unexpended balances of moneys appropriated therefrom for administrative expenses), and hereafter all moneys and [funds](/usc/12/4702.md?p=10) which would, except for this provision, be so depositable thereunder, shall be deposited with the Treasurer of the United States in a special [deposit](/usc/12/5301.md?p=18-A) account and shall be available, retroactively as well as prospectively, for expenditure for all purposes of the [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) [Board](/usc/12/221a.md?p=a) and the [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) Administration, subject to subsections (a) and (b) of [section 712a of title 15](/usc/15/712a.md). # §1440. Examinations and audits The [Director](/usc/12/1422.md?p=11) shall from time to time, at least annually, require examinations and reports of condition of all [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) in such form as the [Director](/usc/12/1422.md?p=11) shall prescribe and shall furnish periodically statements based upon the reports of the [banks](/usc/12/221a.md?p=a) to the [Director](/usc/12/1422.md?p=11). For the purposes of this chapter, examiners appointed by the [Director](/usc/12/1422.md?p=11) shall be subject to the same requirements, responsibilities, and penalties as are applicable to examiners under the National Bank Act [[12 U.S.C. 21](/usc/12/21.md) et seq.] and the Federal Reserve Act [[12 U.S.C. 221](/usc/12/221.md) et seq.], and shall have, in the exercise of functions under this chapter, the same powers and privileges as are vested in such examiners by law. In addition to such examinations, the Comptroller General may audit or examine the [Director](/usc/12/1422.md?p=11) and the [Banks](/usc/12/221a.md?p=a), to determine the extent to which the [Director](/usc/12/1422.md?p=11) and the [Banks](/usc/12/221a.md?p=a) are fairly and effectively fulfilling the purposes of this chapter. # §1440a. Sharing of information among Federal Home Loan Banks - (a) **Information on financial condition—** In order to enable each [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) to evaluate the financial condition of one or more of the other [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) individually and the [Federal Home Loan Bank System](/usc/12/1422.md?p=1-B) ([including](/usc/12/25b.md?p=a-3) any risks associated with the issuance or repayment of consolidated [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) bonds and debentures or other borrowings and the joint and several liabilities of the [Banks](/usc/12/221a.md?p=a) incurred due to such borrowings), as well as to comply with any of its obligations under the Securities Exchange Act of 1934 ([15 U.S.C. 78a](/usc/15/78a.md) et seq.), the [Director](/usc/12/1422.md?p=11) shall make available to the [Banks](/usc/12/221a.md?p=a) such reports, records, or other information as may be available, relating to the condition of any [Federal Home Loan Bank](/usc/12/1422.md?p=1-A). - (b) **Sharing of information—** - (1) **In general—** The [Director](/usc/12/1422.md?p=11) shall promulgate regulations to facilitate the sharing of information made available under [subsection (a)](#a) directly among the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A). - (2) **Limitation—** Notwithstanding [paragraph (1)](#b-1), a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) responding to a request from another [Bank](/usc/12/1422.md?p=1-A) or from the [Director](/usc/12/1422.md?p=11) for information pursuant to this section may request that the [Director](/usc/12/1422.md?p=11) determine that such information is proprietary and that the public interest requires that such information not be shared. - (c) **Limitation—** Nothing in this section shall affect the obligations of any [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) under the Securities Exchange Act of 1934 ([15 U.S.C. 78a](/usc/15/78a.md) et seq.) or the regulations issued by the Securities and Exchange Commission thereunder. - (d) **No waiver of privilege—** The [Director](/usc/12/1422.md?p=11) shall not be deemed to have waived any privilege applicable to any information concerning a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) by transferring, or permitting the transfer of, that information to any other [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) for the purposes set out in [subsection (a)](#a). # §1441. Financing Corporation - (a) **Establishment—** Notwithstanding any other provision of law, the [Director](/usc/12/1422.md?p=11) shall charter a [corporation](/usc/12/2277a.md?p=2) to be known as the Financing [Corporation](/usc/12/2277a.md?p=2). - (b) **Management of Financing Corporation—** - (1) **Directorate—** The Financing [Corporation](/usc/12/2277a.md?p=2) shall be under the management of a [directorate](#k-1) composed of 3 [members](/usc/12/1422.md?p=3) as follows: - (A) The [Director](/usc/12/1422.md?p=11) of the [Office](/usc/12/2279bb.md?p=4) of Finance of the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) (or the head of any successor to such [office](/usc/12/2279bb.md?p=4)). - (B) 2 [members](/usc/12/1422.md?p=3) selected by the [Director](/usc/12/1422.md?p=11) from among the presidents of the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A). - (2) **Terms—** Each [member](/usc/12/1422.md?p=3) appointed under [paragraph (1)(B)](#b-1-B) shall be appointed for a term of 1 year. - (3) **Vacancy—** If any [member](/usc/12/1422.md?p=3) leaves the [office](/usc/12/2279bb.md?p=4) in which such [member](/usc/12/1422.md?p=3) was serving when appointed to the [Directorate](#k-1)— - (A) such [member](/usc/12/1422.md?p=3)’s service on the [Directorate](#k-1) shall terminate on the date such [member](/usc/12/1422.md?p=3) leaves such [office](/usc/12/2279bb.md?p=4); and - (B) the successor to the [office](/usc/12/2279bb.md?p=4) of such [member](/usc/12/1422.md?p=3) shall serve the remainder of such [member](/usc/12/1422.md?p=3)’s term. - (4) **Equal representation of banks—** No president of a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) may be appointed to serve an additional term on the [Directorate](#k-1) until such time as the presidents of each of the other [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) have served as many terms on the [Directorate](#k-1) as the president of such [bank](/usc/12/1422.md?p=1-A) (before the appointment of such president to such additional term). - (5) **Chairperson—** The [Director](/usc/12/1422.md?p=11) shall select the chairperson of the [Directorate](#k-1) from among the 3 [members](/usc/12/1422.md?p=3) of the [Directorate](#k-1). - (6) **Staff—** - (A) **No paid employees—** The Financing [Corporation](/usc/12/2277a.md?p=2) shall have no paid employees. - (B) **Powers—** The [Directorate](#k-1) may, with the approval of the [Director](/usc/12/1422.md?p=11), authorize the officers, employees, or agents of the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) to act for and on behalf of the Financing [Corporation](/usc/12/2277a.md?p=2) in such manner as may be necessary to carry out the functions of the Financing [Corporation](/usc/12/2277a.md?p=2). - (7) **Administrative expenses—** - (A) **In general—** All [administrative expenses](#b-7-C) of the Financing [Corporation](/usc/12/2277a.md?p=2) shall be paid by the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A). - (B) **Pro rata distribution—** The amount each [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) shall pay shall be determined by the [Director](/usc/12/1422.md?p=11) by multiplying the total [administrative expenses](#b-7-C) for any period by the percentage arrived at by dividing— - (i) the aggregate amount the [Director](/usc/12/1422.md?p=11) required such [bank](/usc/12/1422.md?p=1-A) to invest in the Financing [Corporation](/usc/12/2277a.md?p=2) (as of the time of such determination) under paragraphs [(4)](#d-4) and [(5)](#d-5) of subsection (d) (as computed without regard to paragraph [(3)](#b-3) or [(6)](#b-6) of such subsection); by - (ii) the aggregate amount the [Director](/usc/12/1422.md?p=11) required all [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) to invest (as of the time of such determination) under such paragraphs. - (C) **Administrative expenses defined—** For purposes of this paragraph, the term “administrative expenses” does not include— - (i) issuance costs (as such term is defined in [subsection (g)(5)(A)](#g-5-A)); - (ii) any interest on (and any redemption premium with respect to) any obligation of the Financing [Corporation](/usc/12/2277a.md?p=2); or - (iii) custodian fees (as such term is defined in [subsection (g)(5)(B)](#g-5-B)). - (8) **Regulation by Director—** The [Directorate](#k-1) shall be subject to such regulations, orders, and directions as the [Director](/usc/12/1422.md?p=11) may prescribe. - (9) **No compensation from Financing Corporation—** [Members](/usc/12/1422.md?p=3) of the [Directorate](#k-1) shall receive no pay, allowances, or benefits from the Financing [Corporation](/usc/12/2277a.md?p=2) by reason of their service on the [Directorate](#k-1). - (c) **Powers of Financing Corporation—** The Financing [Corporation](/usc/12/2277a.md?p=2) shall have only the following powers, subject to the other provisions of this section and such regulations, orders, and directions as the [Director](/usc/12/1422.md?p=11) may prescribe: - (1) To issue nonvoting [capital stock](/usc/12/51c.md) to the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A). - (2) To invest in any security issued by the Federal Savings and Loan Insurance [Corporation](/usc/12/2277a.md?p=2) under [section 1725(b) of this title](https://uscode.house.gov/view.xhtml?req=(/us/usc/t12/s1725/b)) prior to August 9, 1989, and thereafter to transfer the proceeds of any obligation issued by the Financing [Corporation](/usc/12/2277a.md?p=2) to the FSLIC Resolution [Fund](/usc/12/4702.md?p=10). - (3) To issue debentures, bonds, or other obligations and to borrow, to give security for any amount borrowed, and to pay interest on (and any redemption premium with respect to) any such obligation or amount. - (4) To impose assessments in accordance with [subsection (f)](#f). - (5) To adopt, alter, and use a corporate seal. - (6) To have succession until dissolved. - (7) To enter into contracts. - (8) To sue and be sued in its corporate capacity, and to complain and defend in any action brought by or against the Financing [Corporation](/usc/12/2277a.md?p=2) in any [State](/usc/12/1422.md?p=2) or Federal court of competent jurisdiction. - (9) To exercise such incidental powers not inconsistent with the provisions of this section as are necessary or appropriate to carry out the provisions of this section. - (d) **Capitalization of Financing Corporation—** - (1) **Purchase of capital stock by Federal Home Loan Banks—** - (A) **In general—** Each [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) shall invest in nonvoting [capital stock](/usc/12/51c.md) of the Financing [Corporation](/usc/12/2277a.md?p=2) at such times and in such amounts as the [Director](/usc/12/1422.md?p=11) may prescribe under this subsection. - (B) **Par value; transferability—** Each share of stock issued by the Financing [Corporation](/usc/12/2277a.md?p=2) to a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) shall have par value in an amount determined by the [Director](/usc/12/1422.md?p=11) and shall be transferable only among the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) in the manner and to the extent prescribed by the [Director](/usc/12/1422.md?p=11) at not less than par value. - (2) **Aggregate dollar amount limitation on all investments—** The aggregate amount of [funds](/usc/12/4702.md?p=10) invested by all [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) in nonvoting [capital stock](/usc/12/51c.md) of the Financing [Corporation](/usc/12/2277a.md?p=2) shall not exceed $3,000,000,000. - (3) **Maximum investment amount limitation for each Federal Home Loan Bank—** The cumulative amount of [funds](/usc/12/4702.md?p=10) invested in nonvoting [capital stock](/usc/12/51c.md) of the Financing [Corporation](/usc/12/2277a.md?p=2) by each [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) shall not exceed the aggregate amount of— - (A) the sum of— - (i) the reserves maintained by such [bank](/usc/12/1422.md?p=1-A) on December 31, 1985, pursuant to the requirement contained in the first 2 sentences of [section 1436 of this title](/usc/12/1436.md); and - (ii) the [undivided profits](#d-7) (as defined in [paragraph (7)](#d-7)) of such [bank](/usc/12/1422.md?p=1-A) on such date; and - (B) the sum of— - (i) the amounts added to reserves after December 31, 1985, pursuant to the requirement contained in the first 2 sentences of [section 1436 of this title](/usc/12/1436.md); and - (ii) the [undivided profits](#d-7) of such [bank](/usc/12/1422.md?p=1-A) accruing after such date. - (4) **Pro rata distribution of 1st $1,000,000,000 invested in Financing Corporation by Home Loan Banks—** Of the first $1,000,000,000 in the aggregate which the Thrift Depositor Protection Oversight [Board](/usc/12/221a.md?p=a) pursuant to [section 1441b of this title](/usc/12/1441b.md) or the [Director](/usc/12/1422.md?p=11) under this section (as the case may be) may require the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) collectively to invest in the stock of the Funding [Corporation](/usc/12/2277a.md?p=2) or invest in the [capital stock](/usc/12/51c.md) of the Financing [Corporation](/usc/12/2277a.md?p=2), respectively, the amount which each [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) (or any successor to such [Bank](/usc/12/1422.md?p=1-A)) shall invest shall be determined by the Thrift Depositor Protection Oversight [Board](/usc/12/221a.md?p=a) or the [Director](/usc/12/1422.md?p=11) (as the case may be) by multiplying the aggregate amount of such payment or investment by all [Banks](/usc/12/221a.md?p=a) by the percentage appearing in the following table for each such [Bank](/usc/12/1422.md?p=1-A): | | | | --- | --- | | [Bank](/usc/12/1422.md?p=1-A) | Percentage | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of Boston | 1.8629 | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of New York | 9.1006 | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of Pittsburgh | 4.2702 | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of Atlanta | 14.4007 | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of Cincinnati | 8.2653 | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of Indianapolis | 5.2863 | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of Chicago | 9.6886 | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of Des Moines | 6.9301 | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of Dallas | 8.8181 | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of Topeka | 5.2706 | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of San Francisco | 19.9644 | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of Seattle | 6.1422 | - (5) **Pro rata distribution of amounts required to be invested in excess of $1,000,000,000—** With respect to any amount in excess of the $1,000,000,000 amount referred to in [paragraph (4)](#d-4) which the [Director](/usc/12/1422.md?p=11) may require the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) to invest in [capital stock](/usc/12/51c.md) of the Financing [Corporation](/usc/12/2277a.md?p=2) under this subsection, the amount which each [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) (or any successor to such [bank](/usc/12/1422.md?p=1-A)) shall invest shall be determined by the [Director](/usc/12/1422.md?p=11) by multiplying such excess amount by the percentage arrived at by dividing— - (A) the sum of the total assets (as of the most recent December 31) held by all [Savings Association](/usc/12/1422.md?p=8) Insurance [Fund](/usc/12/4702.md?p=10) [members](/usc/12/1422.md?p=3) which are [members](/usc/12/1422.md?p=3) of such [bank](/usc/12/1422.md?p=1-A); by - (B) the sum of the total assets (as of such date) held by all [Savings Association](/usc/12/1422.md?p=8) Insurance [Fund](/usc/12/4702.md?p=10) [members](/usc/12/1422.md?p=3) which are [members](/usc/12/1422.md?p=3) of any [Federal Home Loan Bank](/usc/12/1422.md?p=1-A). - (6) **Special provisions relating to maximum amount limitations—** - (A) **In general—** If the amount any [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) is required to invest in [capital stock](/usc/12/51c.md) of the Financing [Corporation](/usc/12/2277a.md?p=2) pursuant to a determination by the [Director](/usc/12/1422.md?p=11) under [paragraph (5)](#d-5) (or under subparagraph (B) of this paragraph) exceeds the maximum investment amount applicable with respect to such [bank](/usc/12/1422.md?p=1-A) under [paragraph (3)](#d-3) at the time of such determination (hereinafter in this paragraph referred to as the “excess amount”)— - (i) the [Director](/usc/12/1422.md?p=11) shall require each remaining [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) to invest (in addition to the amount determined under [paragraph (5)](#d-5) for such remaining [bank](/usc/12/1422.md?p=1-A) and subject to the maximum investment amount applicable with respect to such remaining [bank](/usc/12/1422.md?p=1-A) under [paragraph (3)](#d-3) at the time of such determination) in such [capital stock](/usc/12/51c.md) on behalf of the [bank](/usc/12/1422.md?p=1-A) in the amount determined under [subparagraph (B)](#d-6-B); - (ii) the [Director](/usc/12/1422.md?p=11) shall require the [bank](/usc/12/1422.md?p=1-A) to subsequently purchase the excess amount of [capital stock](/usc/12/51c.md) from the remaining [banks](/usc/12/221a.md?p=a) in the manner described in [subparagraph (C)](#d-6-C); and - (iii) the requirements contained in subparagraphs [(D)](#d-6-D) and [(E)](#d-6-E) relating to the use of [net earnings](#k-2) shall apply to such [bank](/usc/12/1422.md?p=1-A) until the [bank](/usc/12/1422.md?p=1-A) has purchased all of the excess amount of [capital stock](/usc/12/51c.md). - (B) **Allocation of excess amount among remaining Home Loan Banks—** The amount each remaining [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) shall be required to invest under [subparagraph (A)(i)](#d-6-A-i) is the amount determined by the [Director](/usc/12/1422.md?p=11) by multiplying the excess amount by the percentage arrived at by dividing— - (i) the amount of [capital stock](/usc/12/51c.md) of the Financing [Corporation](/usc/12/2277a.md?p=2) held by such remaining [bank](/usc/12/1422.md?p=1-A) at the time of such determination; by - (ii) the aggregate amount of such stock held by all remaining [banks](/usc/12/221a.md?p=a) at such time. - (C) **Purchase procedure—** The [bank](/usc/12/1422.md?p=1-A) on whose behalf an investment in [capital stock](/usc/12/51c.md) is made under [subparagraph (A)(i)](#d-6-A-i) shall purchase, annually and at the issuance price, from each remaining [bank](/usc/12/1422.md?p=1-A) an amount of such stock determined by the [Director](/usc/12/1422.md?p=11) by multiplying the amount available for such purchases (at the time of such determination) by the percentage determined under [subparagraph (B)](#d-6-B) with respect to such remaining [bank](/usc/12/1422.md?p=1-A) until the aggregate amount of such [capital stock](/usc/12/51c.md) has been purchased by the [bank](/usc/12/1422.md?p=1-A). - (D) **Limitation on dividends—** The amount of dividends which may be paid for any year by a [bank](/usc/12/1422.md?p=1-A) on whose behalf an investment is made under [subparagraph (A)(i)](#d-6-A-i) shall not exceed an amount equal to ½ of the [net earnings](#k-2) of the [bank](/usc/12/1422.md?p=1-A) for the year. - (E) **Transfer to account for purchase of stock required—** Of the [net earnings](#k-2) for any year of a [bank](/usc/12/1422.md?p=1-A) on whose behalf an investment is made under [subparagraph (A)(i)](#d-6-A-i), such amount as is necessary to make the purchases of stock required under [subparagraph (A)(ii)](#d-6-A-ii) shall be placed in a reserve account (established in such manner as the [Director](/usc/12/1422.md?p=11) shall prescribe by regulations) the balance in which shall be available only for such purchases. - (7) **Undivided profits defined—** For purposes of [paragraph (3)](#d-3), the term “undivided profits” means retained earnings minus the sum of— - (A) that portion required to be added to reserves maintained pursuant to the first two sentences of [section 1436 of this title](/usc/12/1436.md); and - (B) the dollar amounts held by the respective [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) in special dividend stabilization reserves on December 31, 1985, as determined under the following table: | | | | --- | --- | | [Bank](/usc/12/1422.md?p=1-A) | Dollar amount | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of Boston | $3.2 million | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of New York | 7.7 million | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of Pittsburgh | 5.2 million | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of Atlanta | 12.3 million | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of Cincinnati | 5.9 million | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of Indianapolis | 37.4 million | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of Chicago | 6.0 million | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of Des Moines | 32.7 million | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of Dallas | 45.0 million | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of Topeka | 13.7 million | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of San Francisco | 21.9 million | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of Seattle | 33.6 million | - (e) **Obligations of Financing Corporation—** - (1) **Limitation on amount of outstanding obligations—** The aggregate amount of obligations of the Financing [Corporation](/usc/12/2277a.md?p=2) which may be outstanding at any time (as determined by the [Director](/usc/12/1422.md?p=11)) shall not exceed the lesser of— - (A) an amount equal to the greater of— - (i) 5 times the amount of the nonvoting [capital stock](/usc/12/51c.md) of the Financing [Corporation](/usc/12/2277a.md?p=2) which is outstanding at such time; or - (ii) the sum of the face amounts (the amount of principal payable at maturity) of securities described in [subsection (g)(2)](#g-2) which are held at such time in the segregated account established pursuant to such subsection; or - (B) $10,825,000,000. - (2) **Termination of borrowing authority—** No obligation of the Financing [Corporation](/usc/12/2277a.md?p=2) shall be issued after December 12, 1991. - (3) **Limitation on term of obligations—** No obligation of the Financing [Corporation](/usc/12/2277a.md?p=2) may be issued which matures— - (A) more than 30 years after the date of issue; or - (B) after December 31, 2026. - (4) **Investment of United States funds in obligations—** Obligations issued under this section by the Financing [Corporation](/usc/12/2277a.md?p=2) with the approval of the [Director](/usc/12/1422.md?p=11) shall be lawful investments, and may be accepted as security, for all fiduciary, trust, and public [funds](/usc/12/4702.md?p=10) the investment or [deposit](/usc/12/5301.md?p=18-A) of which shall be under the authority or [control](/usc/12/24a.md?p=g-1) of the United States or any officer of the United States. - (5) **Market for obligations—** All [persons](/usc/12/5481.md?p=19) having the power to invest in, sell, underwrite, purchase for their own accounts, accept as security, or otherwise deal in obligations of the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) shall also have the power to do so with respect to obligations of the Financing [Corporation](/usc/12/2277a.md?p=2). - (6) **No full faith and credit of the United States—** Obligations of the Financing [Corporation](/usc/12/2277a.md?p=2) and the interest payable on such obligations shall not be obligations of, or guaranteed as to principal or interest by, the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A), the United States, or the FSLIC Resolution [Fund](/usc/12/4702.md?p=10) and the obligations shall so plainly [state](/usc/12/1422.md?p=2). - (7) **Tax exempt status—** - (A) **In general—** Except as provided in [subparagraph (B)](#e-7-B), obligations of the Financing [Corporation](/usc/12/2277a.md?p=2) shall be exempt from tax both as to principal and interest to the same extent as any obligation of a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) is exempt from tax under [section 1433 of this title](/usc/12/1433.md). - (B) **Exception—** The Financing [Corporation](/usc/12/2277a.md?p=2), like the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A), shall be treated as an [agency](/usc/12/1422.md?p=12) of the United States for purposes of the first sentence of [section 3124(b) of title 31](/usc/31/3124.md?p=b) (relating to determination of tax status of interest on obligations). - (8) **Obligations are exempt securities—** Notwithstanding [paragraph (7)](#e-7),[^1] obligations of the Financing [Corporation](/usc/12/2277a.md?p=2) shall be deemed to be exempt securities (within the meaning of laws administered by the Securities and Exchange Commission) to the same extent as securities which are direct obligations of the United States or are guaranteed as to principal or interest by the United States. - (9) **Minority participation in public offerings—** The Chairperson of the [Director](/usc/12/1422.md?p=11)[^2] and the Directorate shall ensure that minority owned or controlled commercial [banks](/usc/12/221a.md?p=a), investment banking firms, underwriters, and bond counsels throughout the United States have an opportunity to [participate](/usc/12/2206a.md?p=a-1) to a significant degree in any public offering of obligations issued under this section. - (f) **Sources of funds for interest payments; Financing Corporation assessment authority—** The Financing [Corporation](/usc/12/2277a.md?p=2) shall obtain [funds](/usc/12/4702.md?p=10) for anticipated interest payments, issuance costs, and custodial fees on obligations issued hereunder from the following sources: - (1) **Preenactment assessments—** The Financing [Corporation](/usc/12/2277a.md?p=2) assessments which were assessed on insured institutions pursuant to this section as in effect prior to August 9, 1989. - (2) **New assessment authority—** In addition to the amounts obtained pursuant to [paragraph (1)](#f-1), the Financing [Corporation](/usc/12/2277a.md?p=2), with the approval of the [Board](/usc/12/221a.md?p=a)[^3] of [Directors](/usc/12/1422.md?p=11) of the Federal [Deposit](/usc/12/5301.md?p=18-A) Insurance [Corporation](/usc/12/2277a.md?p=2), shall assess against each [insured depository institution](/usc/12/1422.md?p=9) an assessment (in the same manner as assessments are assessed against such institutions by the Federal [Deposit](/usc/12/5301.md?p=18-A) Insurance [Corporation](/usc/12/2277a.md?p=2) under [section 1817 of this title](/usc/12/1817.md)). - (3) **Receivership proceeds—** To the extent the amounts available pursuant to paragraphs [(1)](#f-1) and [(2)](#f-2) are insufficient to cover the amount of interest payments, issuance costs, and custodial fees, and if the [funds](/usc/12/4702.md?p=10) are not required by the Resolution Funding [Corporation](/usc/12/2277a.md?p=2) to provide [funds](/usc/12/4702.md?p=10) for the Funding [Corporation](/usc/12/2277a.md?p=2) Principal [Fund](/usc/12/4702.md?p=10) under [section 1441b of this title](/usc/12/1441b.md), the Federal [Deposit](/usc/12/5301.md?p=18-A) Insurance [Corporation](/usc/12/2277a.md?p=2) shall transfer to the Financing [Corporation](/usc/12/2277a.md?p=2), from the liquidating dividends and payments made on claims received by the FSLIC Resolution [Fund](/usc/12/4702.md?p=10) (established under [section 1821a of this title](/usc/12/1821a.md)) from receiverships, the remaining amount of [funds](/usc/12/4702.md?p=10) necessary for the Financing [Corporation](/usc/12/2277a.md?p=2) to make interest payments. - (g) **Use and disposition of assets of Financing Corporation not invested in FSLIC—** - (1) **In general—** Subject to such regulations, restrictions, and limitations as may be prescribed by the [Director](/usc/12/1422.md?p=11), assets of the Financing [Corporation](/usc/12/2277a.md?p=2), which are not invested in [capital](/usc/12/51c.md) certificates or [capital stock](/usc/12/51c.md) issued by the Federal Savings and Loan Insurance [Corporation](/usc/12/2277a.md?p=2) under [section 1725(b)(1)(A) of this title](https://uscode.house.gov/view.xhtml?req=(/us/usc/t12/s1725/b/1/A)) before August 9, 1989, and after August 9, 1989, in [capital](/usc/12/51c.md) certificates issued by the FSLIC Resolution [Fund](/usc/12/4702.md?p=10), shall be invested in— - (A) direct obligations of the United States; - (B) obligations, [participations](/usc/12/2206a.md?p=a-1), or other instruments of, or issued by, the Federal National [Mortgage](/usc/12/1707.md?p=a) [Association](/usc/12/1828.md?p=s-4-E-i) or the Government National [Mortgage](/usc/12/1707.md?p=a) [Association](/usc/12/1828.md?p=s-4-E-i); - (C) [mortgages](/usc/12/1707.md?p=a), obligations, or other securities for sale by, or which have been disposed of by, the Federal Home Loan [Mortgage](/usc/12/1707.md?p=a) [Corporation](/usc/12/2277a.md?p=2) under section [1454](/usc/12/1454.md) or [1455](/usc/12/1455.md) of this title; or - (D) any other security in which it is lawful for fiduciary and trust [funds](/usc/12/4702.md?p=10) to be invested under the laws of any [State](/usc/12/1422.md?p=2). - (2) **Segregated account for zero coupon instruments held to assure payment of principal—** The Financing [Corporation](/usc/12/2277a.md?p=2) shall invest in, and hold in a segregated account, noninterest bearing instruments— - (A) which are securities described in [paragraph (1)](#g-1); and - (B) the total of the face amounts (the amount of principal payable at maturity) of which is approximately equal to the aggregate amount of principal on the obligations of the Financing [Corporation](/usc/12/2277a.md?p=2), to assure the repayment of principal on obligations of the Financing [Corporation](/usc/12/2277a.md?p=2). For purposes of the foregoing, the Financing [Corporation](/usc/12/2277a.md?p=2) shall be deemed to hold noninterest bearing instruments that it lends temporarily to primary United States Treasury dealers in order to enhance market liquidity and facilitate deliveries, provided that United States Treasury securities of equal or greater value have been delivered as collateral. - (3) **Dollar amount limitation on investment in zero coupon instruments for segregated account—** The aggregate amount invested by the Financing [Corporation](/usc/12/2277a.md?p=2) under [paragraph (2)](#g-2) shall not exceed $2,200,000,000 (as determined on the basis of the purchase price). - (4) **Exception for payment of issuance costs, interest, and custodian fees—** Notwithstanding the requirements of [paragraph (1)](#g-1), the assets of the Financing [Corporation](/usc/12/2277a.md?p=2) referred to in [paragraph (1)](#g-1) which are not invested under [paragraph (2)](#g-2) may be used to pay— - (A) [issuance costs](#g-5-A); - (B) any interest on (and any redemption premium with respect to) any obligation of the Financing [Corporation](/usc/12/2277a.md?p=2); and - (C) [custodian fees](#g-5-B). - (5) **Definitions—** For purposes of this subsection— - (A) **Issuance costs—** The term “issuance costs”— - (i) means issuance fees and commissions incurred by the Financing [Corporation](/usc/12/2277a.md?p=2) in connection with the issuance or [servicing](/usc/12/2605.md?p=i-3) of any obligation of the Financing [Corporation](/usc/12/2277a.md?p=2); and - (ii) [includes](/usc/12/25b.md?p=a-3) legal and accounting expenses, trustee and fiscal and paying agent charges, costs incurred in connection with preparing and printing offering materials, and advertising expenses, to the extent that any such cost or expense is incurred by the Financing [Corporation](/usc/12/2277a.md?p=2) in connection with issuing any obligation. - (B) **Custodian fees—** The term “custodian fee” means— - (i) any fee incurred by the Financing [Corporation](/usc/12/2277a.md?p=2) in connection with the transfer of any security to, or the maintenance of any security in, the segregated account established under [paragraph (2)](#g-2); and - (ii) any other expense incurred by the Financing [Corporation](/usc/12/2277a.md?p=2) in connection with the establishment or maintenance of such account. - (h) **Miscellaneous provisions relating to Financing Corporation—** - (1) **Treatment for certain purposes—** Except as provided in subsection (e)(8)(B), the Financing [Corporation](/usc/12/2277a.md?p=2) shall be treated as a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) for purposes of sections [1433](/usc/12/1433.md) and [1443](/usc/12/1443.md) of this title. - (2) **Federal Reserve banks as depositaries and fiscal agents—** The Federal [Reserve banks](/usc/12/221a.md?p=a) are authorized to act as depositaries for or fiscal agents or custodians of the Financing [Corporation](/usc/12/2277a.md?p=2). - (3) **Applicability of certain provisions relating to Government corporation—** Notwithstanding the fact that no Government [funds](/usc/12/4702.md?p=10) may be invested in the Financing [Corporation](/usc/12/2277a.md?p=2), the Financing [Corporation](/usc/12/2277a.md?p=2) shall be treated, for purposes of sections 9105,[^4] 9107, and 9108 of [title 31](/usc/31.md), as a mixed-ownership Government [corporation](/usc/12/2277a.md?p=2) which has [capital](/usc/12/51c.md) of the Government. - (i) **Termination of Financing Corporation—** - (1) **In general—** The Financing [Corporation](/usc/12/2277a.md?p=2) shall be dissolved, as soon as practicable, after the earlier of— - (A) the maturity and full payment of all obligations issued by the Financing [Corporation](/usc/12/2277a.md?p=2) pursuant to this section; or - (B) December 31, 2026. - (2) **Director authority to conclude the affairs of Financing Corporation—** Effective on the date of the dissolution of the Financing [Corporation](/usc/12/2277a.md?p=2) under [paragraph (1)](#i-1), the [Director](/usc/12/1422.md?p=11) may exercise, on behalf of the Financing [Corporation](/usc/12/2277a.md?p=2), any power of the Financing [Corporation](/usc/12/2277a.md?p=2) which the [Director](/usc/12/1422.md?p=11) determines to be necessary to settle and conclude the affairs of the Financing [Corporation](/usc/12/2277a.md?p=2). - (j) **Regulations—** The [Director](/usc/12/1422.md?p=11) may prescribe such regulations as may be necessary to carry out the provisions of this section, [including](/usc/12/25b.md?p=a-3) regulations defining terms used in this section. - (k) **Definitions—** For purposes of this section, the following definitions shall apply: - (1) **Directorate—** The term “Directorate” means the directorate established in the manner provided in [subsection (b)(1)](#b-1) to manage the Financing [Corporation](/usc/12/2277a.md?p=2). - (2) **Net earnings—** The term “net earnings” means net earnings without reduction for any chargeoffs or expenses incurred by a [Bank](/usc/12/1422.md?p=1-A) in connection with the purchase of [capital stock](/usc/12/51c.md) of the Financing [Corporation](/usc/12/2277a.md?p=2) or the purchase of stock of the Funding [Corporation](/usc/12/2277a.md?p=2) required by the Thrift Depositor Protection Oversight [Board](/usc/12/221a.md?p=a) under subsections (e) and (f) of [section 1441b of this title](/usc/12/1441b.md). - (3) **Insured depository institution—** The term “[insured depository institution](/usc/12/1422.md?p=9)” has the same meaning as in [section 1813 of this title](/usc/12/1813.md)[^5] # [§1441a. Repealed. Pub. L. 111–203, title III, § 364(b), July 21, 2010, 124 Stat. 1555 — repealed] # §1441a–1. Definitions For purposes of [section 1441a–2 of this title](/usc/12/1441a–2.md): - (1) **State housing finance authority—** The term “State housing finance authority” means any [public agency](/usc/12/1821.md?p=w-2-B), authority, or [corporation](/usc/12/2277a.md?p=2) which— - (A) serves as an instrumentality of any [State](/usc/12/1422.md?p=2) or any political subdivision of any [State](/usc/12/1422.md?p=2); and - (B) functions as a source of [residential mortgage](/usc/12/1717.md?p=b-7-A-ii) loan financing in that [State](/usc/12/1422.md?p=2). - (2) **Nonprofit entity—** The term “nonprofit entity” means any not-for-profit [corporation](/usc/12/2277a.md?p=2) chartered under [State](/usc/12/1422.md?p=2) law that is exempt from Federal taxation under [section 501(c) of title 26](/usc/26/501.md?p=c) and no part of the [net earnings](/usc/12/1441.md?p=k-2) of which inures to the benefit of any [member](/usc/12/1422.md?p=3), founder, contributor, or individual ([including](/usc/12/25b.md?p=a-3) any nonprofit entity established by the [corporation](/usc/12/2277a.md?p=2) established under title IX of the Housing and Urban Development Act of 1968 [[42 U.S.C. 3931](/usc/42/3931.md) et seq.]). - (3) **Mortgage-related assets—** The term “mortgage-related assets” means— - (A) [residential mortgage](/usc/12/1717.md?p=b-7-A-ii) loans secured by 1- to 4-[family](/usc/12/1715z–1.md?p=j-2-A) or multifamily dwellings; and - (B) real property improved with 1- to 4-[family](/usc/12/1715z–1.md?p=j-2-A) or multifamily residential dwellings, which are located within the jurisdiction of the applicable [State housing finance authority](#1) or within the geographical area served by the [nonprofit entity](#2). - (4) **Net income—** The term “net income” means income after deduction of all associated expenses calculated in accordance with generally accepted accounting principles. # §1441a–2. Authorization for State housing finance agencies and nonprofit entities to purchase mortgage-related assets - (a) **Authorization—** Notwithstanding any other provision of Federal or [State](/usc/12/1422.md?p=2) law, a [State housing finance authority](/usc/12/1441a–1.md?p=1) or [nonprofit entity](/usc/12/1441a–1.md?p=2) may purchase [mortgage-related assets](/usc/12/1441a–1.md?p=3) from the Resolution Trust [Corporation](/usc/12/2277a.md?p=2) or from [financial institutions](/usc/12/1715k.md?p=h-1-C) with respect to which the Federal [Deposit](/usc/12/5301.md?p=18-A) Insurance [Corporation](/usc/12/2277a.md?p=2) is acting as a conservator or receiver ([including](/usc/12/25b.md?p=a-3) assets associated with any trust business), and any contract for such purchase shall be effective in accordance with its terms without any further approval, assignment, or consent with respect to that contract. - (b) **Investment requirement—** Any [State housing finance authority](/usc/12/1441a–1.md?p=1) or [nonprofit entity](/usc/12/1441a–1.md?p=2) which purchases [mortgage-related assets](/usc/12/1441a–1.md?p=3) pursuant to [subsection (a)](#a) shall invest any [net income](/usc/12/1441a–1.md?p=4) attributable to the ownership of those assets in financing, refinancing, or rehabilitating low- and moderate-income housing within the jurisdiction of the [State housing finance authority](/usc/12/1441a–1.md?p=1) or within the geographical area served by the [nonprofit entity](/usc/12/1441a–1.md?p=2). # §1441a–3. RTC and FDIC properties - (a) **Reports—** - (1) **Submission—** The Resolution Trust [Corporation](/usc/12/2277a.md?p=2) and the Federal [Deposit](/usc/12/5301.md?p=18-A) Insurance [Corporation](/usc/12/2277a.md?p=2) shall each submit to the Congress for each year a report identifying and describing any property that is [covered property](#c-2) of the [corporation concerned](#c-1) as of September 30 of such year. The report shall be submitted on or before March 30 of the following year. - (2) **Consultation—** In preparing the reports required under this subsection, each [corporation concerned](#c-1) may consult with the Secretary of the Interior for purposes of identifying the properties described in [paragraph (1)](#a-1). - (b) **Limitation on transfer—** - (1) **Notice—** The Resolution Trust [Corporation](/usc/12/2277a.md?p=2) and the Federal [Deposit](/usc/12/5301.md?p=18-A) Insurance [Corporation](/usc/12/2277a.md?p=2) may not sell or otherwise transfer any [covered property](#c-2) unless the [corporation concerned](#c-1) causes to be published in the Federal Register a notice of the availability of the property for purchase or other transfer that identifies the property and describes the location, characteristics, and size of the property. - (2) **Expression of serious interest—** During the 90-day period beginning on the date that notice under [paragraph (1)](#b-1) concerning a [covered property](#c-2) is first published, any [governmental agency](#c-3) or qualified organization may submit to the [corporation concerned](#c-1) a written notice of serious interest for the purchase or other transfer of a particular [covered property](#c-2) for which notice has been published. The notice of serious interest shall be in such form and include such information as the [corporation concerned](#c-1) may prescribe. - (3) **Prohibition of transfer—** During the period under [paragraph (2)](#b-2), a [corporation concerned](#c-1) may not sell or otherwise transfer any [covered property](#c-2) for which notice has been published under [paragraph (1)](#b-1). Upon the expiration of such period, the [corporation concerned](#c-1) may sell or otherwise transfer any [covered property](#c-2) for which notice under [paragraph (1)](#b-1) has been published if a notice of serious interest under [paragraph (2)](#b-2) concerning the property has not been timely submitted. - (4) **Offers and permitted transfer—** If a notice of serious interest in a [covered property](#c-2) is timely submitted pursuant to [paragraph (2)](#b-2), the [corporation concerned](#c-1) may not sell or otherwise transfer such [covered property](#c-2) during the 90-day period beginning upon the expiration of the period under [paragraph (2)](#b-2) except to a [governmental agency](#c-3) or qualified organization for use primarily for wildlife refuge, sanctuary, open space, recreational, historical, cultural, or natural resource conservation purposes, unless all notices of serious interest under [paragraph (2)](#b-2) have been withdrawn. - (c) **Definitions—** For purposes of this section: - (1) **Corporation concerned—** The term “corporation concerned” means— - (A) the Federal [Deposit](/usc/12/5301.md?p=18-A) Insurance [Corporation](/usc/12/2277a.md?p=2), with respect to matters relating to the Federal [Deposit](/usc/12/5301.md?p=18-A) Insurance [Corporation](/usc/12/2277a.md?p=2); and - (B) the Resolution Trust [Corporation](/usc/12/2277a.md?p=2), with respect to matters relating to the Resolution Trust [Corporation](/usc/12/2277a.md?p=2). - (2) **Covered property—** The term “covered property” means any property— - (A) to which— - (i) the Resolution Trust [Corporation](/usc/12/2277a.md?p=2) has acquired title in its corporate or receivership capacity; or - (ii) the Federal [Deposit](/usc/12/5301.md?p=18-A) Insurance [Corporation](/usc/12/2277a.md?p=2) has acquired title in its corporate capacity or which was acquired by the former Federal Savings and Loan Insurance [Corporation](/usc/12/2277a.md?p=2) in its corporate capacity; and - (B) that— - (i) is located within the John H. Chafee Coastal Barrier Resources System; or - (ii) is [undeveloped](#c-4), greater than 50 acres in size, and adjacent to or contiguous with any lands managed by a [governmental agency](#c-3) primarily for wildlife refuge, sanctuary, open space, recreational, historical, cultural, or natural resource conservation purposes. - (3) **Governmental agency—** The term “governmental agency” means any [agency](/usc/12/1422.md?p=12) or entity of the Federal Government or a [State](/usc/12/1422.md?p=2) or local government. - (4) **Undeveloped—** The term “undeveloped” means— - (A) containing few manmade structures and having geomorphic and ecological processes that are not significantly impeded by any such structures or human activity; and - (B) having natural, cultural, recreational, or scientific value of special significance. # §1441b. Resolution Funding Corporation established - (a) **Purpose—** The purpose of the Resolution Funding Corporation is to provide [funds](/usc/12/4702.md?p=10) to the Resolution Trust [Corporation](/usc/12/2277a.md?p=2) to enable the Resolution Trust [Corporation](/usc/12/2277a.md?p=2) to carry out the provisions of this chapter. - (b) **Establishment—** There is established a [corporation](/usc/12/2277a.md?p=2) to be known as the Resolution [Funding Corporation](#k-3). - (c) **Management of Funding Corporation—** - (1) **Directorate—** The Funding Corporation shall be under the management of a Directorate composed of 3 [members](/usc/12/1422.md?p=3) as follows: - (A) The [director](/usc/12/1422.md?p=11) of the [Office](/usc/12/2279bb.md?p=4) of Finance of the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) (or the head of any successor [office](/usc/12/2279bb.md?p=4)). - (B) 2 [members](/usc/12/1422.md?p=3) selected by the [Thrift Depositor Protection Oversight Board](#k-7) from among the presidents of the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A). - (2) **Terms—** Of the 2 [members](/usc/12/1422.md?p=3) appointed under [paragraph (1)(B)](#c-1-B), 1 shall be appointed for an initial term of 2 years and 1 shall be appointed for an initial term of 3 years. Thereafter, such [members](/usc/12/1422.md?p=3) shall be appointed for a term of 3 years. - (3) **Vacancy—** If any [member](/usc/12/1422.md?p=3) leaves the [office](/usc/12/2279bb.md?p=4) in which such [member](/usc/12/1422.md?p=3) was serving when appointed to the Directorate— - (A) such [member](/usc/12/1422.md?p=3)’s service on the Directorate shall terminate on the date such [member](/usc/12/1422.md?p=3) leaves such [office](/usc/12/2279bb.md?p=4); and - (B) the successor to the [office](/usc/12/2279bb.md?p=4) of such [member](/usc/12/1422.md?p=3) shall serve the remainder of such [member](/usc/12/1422.md?p=3)’s term. - (4) **Equal representation of banks—** No president of a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) may be appointed to serve an additional term on the Directorate until such time as the presidents of each of the other [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) have served as many terms as the president of such [bank](/usc/12/1422.md?p=1-A). - (5) **Chairperson—** The [Thrift Depositor Protection Oversight Board](#k-7) shall select the chairperson of the Directorate from among the 3 [members](/usc/12/1422.md?p=3) of the Directorate. - (6) **Staff—** - (A) **No paid employees—** The Funding Corporation shall have no paid employees. - (B) **Powers—** The Directorate may, with the approval of the [Director](/usc/12/1422.md?p=11) authorize the officers, employees, or agents of the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) to act for and on behalf of the Funding Corporation in such manner as may be necessary to carry out the functions of the Funding Corporation. - (7) **Administrative expenses—** - (A) **In general—** All [administrative expenses](#k-1) of the Funding Corporation, [including](/usc/12/25b.md?p=a-3) [custodian fees](#k-2), shall be paid by the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A). - (B) **Pro rata distribution—** The amount each [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) shall pay under [subparagraph (A)](#c-7-A) shall be determined by the [Thrift Depositor Protection Oversight Board](#k-7) by multiplying the total [administrative expenses](#k-1) for any period by the percentage arrived at by dividing— - (i) the aggregate amount the [Thrift Depositor Protection Oversight Board](#k-7) required such [bank](/usc/12/1422.md?p=1-A) to invest in the Funding Corporation (as of the time of such determination) under paragraphs [(4)](#e-4) and [(5)](#e-5) of subsection (e) (computed without regard to paragraphs [(3)](#c-3) or [(6)](#c-6) of such subsection); by - (ii) the aggregate amount the [Thrift Depositor Protection Oversight Board](#k-7) required all [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) to invest (as of the time of such determination) under such paragraphs. - (8) **Regulation by Thrift Depositor Protection Oversight Board—** The Directorate of the Funding Corporation shall be subject to such regulations, orders, and directions as the [Thrift Depositor Protection Oversight Board](#k-7) may prescribe. - (9) **No compensation from Funding Corporation—** [Members](/usc/12/1422.md?p=3) of the Directorate of the Funding Corporation shall receive no pay, allowance, or benefit from the Funding Corporation for serving on the Directorate. - (d) **Powers of Funding Corporation—** The Funding Corporation shall have only the powers described in [paragraphs (1) through (9)](#d-1..d-9), subject to the other provisions of this section and such regulations, orders, and directions as the [Thrift Depositor Protection Oversight Board](#k-7) may prescribe: - (1) **Issue stock—** To issue nonvoting [capital stock](/usc/12/51c.md) to the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A). - (2) **Purchase capital stock; transfer amounts—** To purchase [capital](/usc/12/51c.md) certificates issued by the Resolution Trust [Corporation](/usc/12/2277a.md?p=2) under [section 1441a of this title](/usc/12/1441a.md), and to transfer amounts to the Resolution Trust [Corporation](/usc/12/2277a.md?p=2) pursuant to subsection (e)(8) of this section. - (3) **Issue obligations—** To issue debentures, bonds, or other obligations, and to borrow, to give security for any amount borrowed, and to pay interest on (and any redemption premium with respect to) any such obligation or amount. - (4) **Impose assessments—** To impose assessments in accordance with subsection (e)(7). - (5) **Corporate seal—** To adopt, alter, and use a corporate seal. - (6) **Succession—** To have succession until dissolved. - (7) **Contracts—** To enter into contracts. - (8) **Authority to sue—** To sue and be sued in its corporate capacity, and to complain and defend in any action brought by or against the Funding Corporation in any [State](/usc/12/1422.md?p=2) or Federal court of competent jurisdiction. - (9) **Incidental powers—** To exercise such incidental powers not inconsistent with the provisions of this section and [section 1441a of this title](/usc/12/1441a.md) as are necessary and appropriate to carry out the provisions of this section. - (e) **Capitalization of Funding Corporation, etc.** - (1) **In general—** - (A) **Amount required—** The [Thrift Depositor Protection Oversight Board](#k-7) shall ensure that the aggregate of the amounts obtained under this subsection shall be sufficient so that— - (i) the Funding Corporation may transfer the amounts required under paragraph (8); and - (ii) the total of the face amounts (the amount of principal payable at maturity) of noninterest bearing instruments in the [Funding Corporation Principal Fund](#k-4) are equal to the aggregate amount of principal on the obligations of the Funding Corporation. - (B) **Purchases of stock by Federal Home Loan Banks—** Each [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) shall purchase stock in the Funding Corporation at times and in amounts prescribed by the [Thrift Depositor Protection Oversight Board](#k-7). - (2) **Par value; transferability—** Each share of stock issued by the Funding Corporation to a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) shall have a par value in an amount determined by the [Thrift Depositor Protection Oversight Board](#k-7) and shall be transferable at not less than par value only among the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) in the manner and to the extent prescribed by the [Thrift Depositor Protection Oversight Board](#k-7). - (3) **Maximum investment amount limitation for each Federal Home Loan Bank—** The cumulative amount of [funds](/usc/12/4702.md?p=10) invested in nonvoting [capital stock](/usc/12/51c.md) of the Funding Corporation by each [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) under [paragraph (1)](#e-1) shall not at any time exceed the sum of the amounts calculated under subparagraphs [(A)](#e-3-A) and [(B)](#e-3-B), as adjusted in [subparagraph (C)](#e-3-C), as follows: - (A) **Reserves and undivided profits on December 31, 1988—** The sum on December 31, 1988, of— - (i) the reserves maintained by such [Bank](/usc/12/1422.md?p=1-A) pursuant to the reserve requirement contained in the first 2 sentences of [section 1436 of this title](/usc/12/1436.md) (as in effect on December 31, 1988); and - (ii) the [undivided profits](#k-9) of such [Bank](/usc/12/1422.md?p=1-A), minus the amounts invested in the [capital stock](/usc/12/51c.md) of the Financing [Corporation](/usc/12/2277a.md?p=2) pursuant to [section 1441 of this title](/usc/12/1441.md). - (B) **Subsequent additions to reserves and un­divided profits—** The amount, calculated until the date on which the [Funding Corporation Principal Fund](#k-4) is fully funded, equal to— - (i) the sum of— - (I) the amounts added to reserves by such [Bank](/usc/12/1422.md?p=1-A) after December 31, 1988, pursuant to the reserve requirement contained in the first 2 sentences of [section 1436 of this title](/usc/12/1436.md) (as in effect on December 31, 1988); and - (II) the quarterly additions to [undivided profits](#k-9) of the [Bank](/usc/12/1422.md?p=1-A) after December 31, 1988; minus - (ii) the amounts invested by such [Bank](/usc/12/1422.md?p=1-A) in the [capital stock](/usc/12/51c.md) of the Financing [Corporation](/usc/12/2277a.md?p=2) after December 31, 1988, pursuant to the requirement contained in [section 1441 of this title](/usc/12/1441.md). - (C) **Annual adjustment—** The amounts in [subparagraph (B)](#e-3-B) shall be adjusted as follows: - (i) **Increase in limit—** If the aggregate amount for all [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) determined under [subparagraph (B)(i)](#e-3-B-i) is less than $300,000,000 per year, the limit for each [Bank](/usc/12/1422.md?p=1-A) shall be increased by an amount determined by the [Thrift Depositor Protection Oversight Board](#k-7) by multiplying the aggregate deficiency by the percentage applicable to such [Bank](/usc/12/1422.md?p=1-A) arrived at in the manner described in [paragraph (5)](#e-5). - (ii) **Decrease in limit—** If the aggregate amount for all [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) determined under [subparagraph (B)(i)](#e-3-B-i) is more than $300,000,000 per year, the limit for each [Bank](/usc/12/1422.md?p=1-A) shall be decreased by an amount determined by the [Thrift Depositor Protection Oversight Board](#k-7) by multiplying the aggregate excess by the percentage applicable to such [Bank](/usc/12/1422.md?p=1-A) arrived at in the manner described in [paragraph (5)](#e-5). - (4) **Pro rata distribution of first $1,000,000,000 invested in Funding Corporation by Federal Home Loan Banks—** Of the first $1,000,000,000 of the aggregate that the [Director](/usc/12/1422.md?p=11) (pursuant to [section 1441 of this title](/usc/12/1441.md)) or the [Thrift Depositor Protection Oversight Board](#k-7) (under this section) may require the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) collectively to invest in the [capital stock](/usc/12/51c.md) of the Financing [Corporation](/usc/12/2277a.md?p=2) or invest in the [capital stock](/usc/12/51c.md) of the Funding Corporation, respectively, the amount which each [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) (or any successor to the [Bank](/usc/12/1422.md?p=1-A)) shall invest shall be determined by the [Director](/usc/12/1422.md?p=11) or the [Thrift Depositor Protection Oversight Board](#k-7) (as the case may be) by multiplying the aggregate amount of such investment by all [Banks](/usc/12/221a.md?p=a) by the percentage appearing in the following table for each such [Bank](/usc/12/1422.md?p=1-A): | [Bank](/usc/12/1422.md?p=1-A) | Percentage | | --- | --- | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of Boston | 1.8629 | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of New York | 9.1006 | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of Pittsburgh | 4.2702 | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of Atlanta | 14.4007 | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of Cincinnati | 8.2653 | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of Indianapolis | 5.2863 | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of Chicago | 9.6886 | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of Des Moines | 6.9301 | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of Dallas | 8.8181 | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of Topeka | 5.2706 | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of San Francisco | 19.9644 | | [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) of Seattle | 6.1422 | - (5) **Pro rata distribution of amounts required to be invested in excess of $1,000,000,000—** Of any amount which the [Thrift Depositor Protection Oversight Board](#k-7) may require the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) to invest in [capital stock](/usc/12/51c.md) of the Funding Corporation under this subsection in excess of the $1,000,000,000 amount referred to in [paragraph (4)](#e-4), the amount which each [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) (or any successor to such [Bank](/usc/12/1422.md?p=1-A)) shall invest shall be determined by the [Thrift Depositor Protection Oversight Board](#k-7) by multiplying the excess amount by the percentage arrived at by dividing— - (A) the sum of the total assets (as of the most recent December 31) held by all [Savings Association](/usc/12/1422.md?p=8) Insurance [Fund](/usc/12/4702.md?p=10) [members](/usc/12/1422.md?p=3) as of the date of funding which are [members](/usc/12/1422.md?p=3) of such [Bank](/usc/12/1422.md?p=1-A); by - (B) the sum of the total assets (as of such date) held by all [Savings Association](/usc/12/1422.md?p=8) Insurance [Fund](/usc/12/4702.md?p=10) [members](/usc/12/1422.md?p=3) as of the date of funding which are [members](/usc/12/1422.md?p=3) of a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A). - (6) **Special provisions relating to maximum amount limitations—** - (A) **In general—** If the amount of any [Federal Home Loan Bank](/usc/12/1422.md?p=1-A)’s allocation under [paragraph (5)](#e-5) exceeds the maximum amount applicable with respect to such [Bank](/usc/12/1422.md?p=1-A) (in this paragraph referred to as a “deficient [Bank](/usc/12/1422.md?p=1-A)”) under [paragraph (3)](#e-3) at the time of such determination (in this paragraph referred to as the “excess amount”)— - (i) the [Thrift Depositor Protection Oversight Board](#k-7) shall require each [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) that is not allocated an amount under [paragraph (5)](#e-5) that exceeds its maximum under [paragraph (3)](#e-3) (in this paragraph referred to as a “remaining [Bank](/usc/12/1422.md?p=1-A)”) to purchase stock in the Funding Corporation (in addition to the amount determined under [paragraph (5)](#e-5) for such remaining [Bank](/usc/12/1422.md?p=1-A) and subject to the maximum amount applicable with respect to such remaining [Bank](/usc/12/1422.md?p=1-A) under [paragraph (3)](#e-3) at the time of such determination) on behalf of the deficient [Bank](/usc/12/1422.md?p=1-A) the amount determined under [subparagraph (B)](#e-6-B); - (ii) the [Thrift Depositor Protection Oversight Board](#k-7) shall require the deficient [Bank](/usc/12/1422.md?p=1-A) to subsequently reimburse the remaining [Banks](/usc/12/221a.md?p=a) out of its [net earnings](#k-6) (or reimbursements received from other [Banks](/usc/12/221a.md?p=a)) in the manner described in subparagraphs [(C)](#e-6-C) and [(D)](#e-6-D); and - (iii) the requirements contained in [subparagraph (D)](#e-6-D) relating to the use of [net earnings](#k-6) shall apply to the deficient [Bank](/usc/12/1422.md?p=1-A) until such [Bank](/usc/12/1422.md?p=1-A) has reimbursed the remaining [Banks](/usc/12/221a.md?p=a) for all of the excess amount. - (B) **Allocation of excess amount among remaining Federal Home Loan Banks—** - (i) **In general—** The amount of stock each remaining [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) shall be required to purchase under [subparagraph (A)(i)](#e-6-A-i) is the amount determined by the [Thrift Depositor Protection Oversight Board](#k-7) by multiplying the excess amount by the percentage arrived at by dividing— - (I) the cumulative amount of stock in the Funding Corporation purchased under this subsection by such remaining [Bank](/usc/12/1422.md?p=1-A) at the time of such determination; by - (II) the aggregate of the cumulative amounts invested under this subsection by all remaining [Banks](/usc/12/221a.md?p=a) at such time. - (ii) **Reallocation—** If the allocation under this subparagraph results in a remaining [Bank](/usc/12/1422.md?p=1-A) exceeding its maximum amount under [paragraph (3)](#e-3), such excess amount shall be reallocated to the other remaining [Bank](/usc/12/1422.md?p=1-A) in accordance with this subparagraph. - (C) **Reimbursement procedure—** - (i) **In general—** A [Bank](/usc/12/1422.md?p=1-A) on whose behalf stock is purchased under [subparagraph (A)(i)](#e-6-A-i) shall make payments annually from amounts, if any, in its reserve account (as described in [subparagraph (D)](#e-6-D)) to each [Bank](/usc/12/1422.md?p=1-A) that made payments on its behalf until a full reimbursement has been completed. A full reimbursement shall require repayment of the excess amounts invested by other [Banks](/usc/12/221a.md?p=a) plus interest which shall accrue at a rate equal to the annual average cost of [funds](/usc/12/4702.md?p=10) in the most recent year to all [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) and which shall begin to accrue 2 years after the investments under [subparagraph (A)(i)](#e-6-A-i) are made. - (ii) **Determination of amounts—** The [Thrift Depositor Protection Oversight Board](#k-7) shall annually determine the dollar amounts of such reimbursements by distributing the amount available for such reimbursements (at the time of such determination) from the reimbursing [Bank](/usc/12/1422.md?p=1-A) to the [Banks](/usc/12/221a.md?p=a) that made purchases on its behalf according to the shares of the reimbursing [Bank](/usc/12/1422.md?p=1-A)’s excess amount that the other [Banks](/usc/12/221a.md?p=a) invested. - (D) **Transfer to account for reimbursements required—** - (i) **In general—** Of the [net earnings](#k-6) for any year of a [Bank](/usc/12/1422.md?p=1-A) on whose behalf a purchase is made under [subparagraph (A)(i)](#e-6-A-i) and any reimbursements received from other [Banks](/usc/12/221a.md?p=a), the amount necessary to make the reimbursements required under [subparagraph (A)(ii)](#e-6-A-ii) shall be placed in a reserve account (established in the manner prescribed by the [Thrift Depositor Protection Oversight Board](#k-7)), which shall be available only for such reimbursements. - (ii) **Limitation—** The total amount placed in such reserve account in any year by any [Bank](/usc/12/1422.md?p=1-A) shall not exceed an amount equal to 20 percent of the [net earnings](#k-6) of such [Bank](/usc/12/1422.md?p=1-A) for such year. - (f) **Obligations of Funding Corporation—** - (1) **Issuance—** The Funding Corporation may issue bonds, notes, debentures, and similar obligations in an aggregate amount not to exceed $30,000,000,000. No obligation may be issued under this paragraph unless, at the time of issuance, the face amounts (the amount of principal payable at maturity) of noninterest bearing instruments in the [Funding Corporation Principal Fund](#k-4) are equal to the aggregate amount of principal on the obligations of the Funding Corporation that will be outstanding following such issuance. - (2) **Interest payments—** The Funding Corporation shall pay the interest due on such obligations from [funds](/usc/12/4702.md?p=10) obtained for such interest payments from the following sources: - (A) **Earnings on certain assets—** Earnings on assets of the Funding Corporation which are not invested in the [Funding Corporation Principal Fund](#k-4) shall be used for interest payments on outstanding debt of the Funding Corporation. - (B) **Proceeds from Resolution Trust Corporation—** To the extent the amounts available pursuant to [subparagraph (A)](#f-2-A) are insufficient to cover the amount of interest payments, the Resolution Trust [Corporation](/usc/12/2277a.md?p=2) shall pay to the Funding Corporation— - (i) the liquidating dividends and payments made on claims received by the Resolution Trust [Corporation](/usc/12/2277a.md?p=2) from receiverships to the extent such proceeds are determined by the [Thrift Depositor Protection Oversight Board](#k-7) to be in excess of [funds](/usc/12/4702.md?p=10) presently necessary for resolution costs; and - (ii) any proceeds from warrants and [participations](/usc/12/2206a.md?p=a-1) acquired by the Resolution Trust [Corporation](/usc/12/2277a.md?p=2). - (C) **Payments by Federal home loan banks—** - (i) **In general—** To the extent that the amounts available pursuant to subparagraphs [(A)](#f-2-A) and [(B)](#f-2-B) are insufficient to cover the amount of interest payments, each [Federal home loan bank](/usc/12/1422.md?p=1-A) shall pay to the Funding Corporation in each calendar year, 20.0 percent of the [net earnings](#k-6) of that [Bank](/usc/12/1422.md?p=1-A) (after deducting expenses relating to [section 1430(j) of this title](/usc/12/1430.md?p=j) and operating expenses). - (ii) **Annual determination—** The [Director](/usc/12/1422.md?p=11) annually shall determine the extent to which the value of the aggregate amounts paid by the [Federal home loan banks](/usc/12/1422.md?p=1-A) exceeds or falls short of the value of an annuity of $300,000,000 per year that commences on the issuance date and ends on the final scheduled [maturity date](/usc/12/1707.md?p=c) of the obligations, and shall select appropriate present value factors for making such determinations, in consultation with the [Secretary](#k-8) of the Treasury. - (iii) **Payment term alterations—** The [Director](/usc/12/1422.md?p=11) shall extend or shorten the term of the payment obligations of a [Federal home loan bank](/usc/12/1422.md?p=1-A) under this subparagraph as necessary to ensure that the value of all payments made by the [Banks](/usc/12/221a.md?p=a) is equivalent to the value of an annuity referred to in [clause (ii)](#f-2-C-ii). - (iv) **Term beyond maturity—** If the [Director](/usc/12/1422.md?p=11) extends the term of payment obligations beyond the final scheduled [maturity date](/usc/12/1707.md?p=c) for the obligations, each [Federal home loan bank](/usc/12/1422.md?p=1-A) shall continue to pay 20.0 percent of its [net earnings](#k-6) (after deducting expenses relating to [section 1430(j) of this title](/usc/12/1430.md?p=j) and operating expenses) to the Treasury of the United States until the value of all such payments by the [Federal home loan banks](/usc/12/1422.md?p=1-A) is equivalent to the value of an annuity referred to in [clause (ii)](#f-2-C-ii). In the final year in which the [Federal home loan banks](/usc/12/1422.md?p=1-A) are required to make any payment to the Treasury under this subparagraph, if the dollar amount represented by 20.0 percent of the [net earnings](#k-6) of the [Federal home loan banks](/usc/12/1422.md?p=1-A) exceeds the remaining obligation of the [Banks](/usc/12/221a.md?p=a) to the Treasury, the [Director](/usc/12/1422.md?p=11) shall reduce the percentage pro rata to a level sufficient to pay the remaining obligation. - (v) **Semiannual reports—** The [Director](/usc/12/1422.md?p=11) shall report semiannually to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives on the projected date for the completion of contributions required by this section. - (D) **Proceeds from sale of assets—** To the extent the amounts available pursuant to subparagraphs [(A)](#f-2-A), [(B)](#f-2-B), and [(C)](#f-2-C) are insufficient to cover the amount of interest payments, the FSLIC Resolution [Fund](/usc/12/4702.md?p=10) shall transfer to the Funding Corporation any net proceeds from the sale of assets received from the Resolution Trust [Corporation](/usc/12/2277a.md?p=2), which shall be used by the Funding Corporation to pay such interest. - (E) **Treasury backup—** - (i) **In general—** To the extent the amounts available pursuant to subparagraphs [(A)](#f-2-A), [(B)](#f-2-B), [(C)](#f-2-C), and [(D)](#f-2-D) are insufficient to cover the amount of interest payments, the [Secretary](#k-8) of the Treasury shall pay to the Funding Corporation the additional amount due, which shall be used by the Funding Corporation to pay such interest. - (ii) **Liability of Funding Corporation—** In each instance where the [Secretary](#k-8) is required to make a payment under this subparagraph to the Funding Corporation, the amount of the payment shall become a liability of the Funding Corporation to be repaid to the [Secretary](#k-8) upon dissolution of the Funding Corporation (to the extent the Funding Corporation may have any remaining assets). - (iii) **Appropriation of funds—** There are hereby appropriated to the [Secretary](#k-8), for fiscal year 1989 and each fiscal year thereafter, such sums as may be necessary to carry out [clause (i)](#f-2-E-i). - (3) **Principal payments—** On maturity of an obligation issued under this subsection, the obligation shall be repaid by the Funding Corporation from the liquidation of noninterest bearing instruments held in the [Funding Corporation Principal Fund](#k-4). - (4) **Proceeds to be transferred to Resolution Trust Corporation—** Subject to terms and conditions approved by the [Thrift Depositor Protection Oversight Board](#k-7), the proceeds (less any discount, plus any premium, net of [issuance costs](#k-5)) of any obligation issued by the Funding Corporation shall be used to— - (A) purchase the [capital](/usc/12/51c.md) certificates issued by the Resolution Trust [Corporation](/usc/12/2277a.md?p=2) under [section 1441a of this title](/usc/12/1441a.md); or - (B) refund any previously issued obligation the proceeds of which were transferred in the manner described in [subparagraph (A)](#f-4-A). - (5) **Investment of United States funds in obligations—** Obligations issued under this section by the Funding Corporation, at the direction of the [Thrift Depositor Protection Oversight Board](#k-7) shall be lawful investments, and may be accepted as security, for all fiduciary, trust, and public [funds](/usc/12/4702.md?p=10) the investment or [deposit](/usc/12/5301.md?p=18-A) of which shall be under the authority or [control](/usc/12/24a.md?p=g-1) of the United States or any officer of the United States. - (6) **Market for obligations—** All [persons](/usc/12/5481.md?p=19) having the power to invest in, sell, underwrite, purchase for their own accounts, accept as security, or otherwise deal in obligations of the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) shall also have the power to do so with respect to obligations of the Funding Corporation. - (7) **Tax exempt status—** - (A) **In general—** Except as provided in [subparagraph (B)](#f-7-B), obligations of the Funding Corporation shall be exempt from tax both as to principal and interest to the same extent as any obligation of a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) is exempt from tax under [section 1433 of this title](/usc/12/1433.md). - (B) **Exception—** The Funding Corporation, like the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A), shall be treated as an [agency](/usc/12/1422.md?p=12) of the United States for purposes of the first sentence of [section 3124(b) of title 31](/usc/31/3124.md?p=b) (relating to determination of tax status of interest on obligations). - (8) **Obligations not exempt securities—** - (A) **In general—** For purposes of the laws administered by the Securities and Exchange Commission, obligations of the Funding Corporation— - (i) shall not be considered to be securities issued or guaranteed by a [person](/usc/12/5481.md?p=19) controlled or supervised by, or acting as an instrumentality of, the Government of the United States; and - (ii) shall not be considered to be “exempted securities” within the meaning of [section 78c(a)(12)(A)(i) of title 15](/usc/15/78c.md?p=a-12-A-i), except that such obligations shall be considered to be exempted securities for purposes of [section 78o](/usc/15/78o.md) of title 15. - (B) **Authority of Commission—** Notwithstanding [subparagraph (A)](#f-8-A), the Securities and Exchange Commission may, by rule or order, consistent with the public interest and the protection of investors, exempt securities issued by the Funding Corporation from the registration requirements of the Securities Act of 1933 [[15 U.S.C. 77a](/usc/15/77a.md) et seq.], subject to such terms and conditions as the Commission may prescribe. - (9) **Minority participation in public or negotiated offerings—** The [Thrift Depositor Protection Oversight Board](#k-7) and the Directorate shall ensure that minority owned or controlled commercial [banks](/usc/12/221a.md?p=a), investment banking firms, underwriters, and bond counsels throughout the United States have an opportunity to [participate](/usc/12/2206a.md?p=a-1) to a significant degree in any public or negotiated offering of obligations issued under this section. - (10) **No full faith and credit of the United States—** Obligations of the Funding Corporation shall not be obligations of, or guaranteed as to principal by, the [Federal Home Loan Bank System](/usc/12/1422.md?p=1-B), the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A), the United States, or the Resolution Trust [Corporation](/usc/12/2277a.md?p=2) and the obligations shall so plainly [state](/usc/12/1422.md?p=2). The [Secretary](#k-8) shall pay interest on such obligations as required pursuant to this subsection. - (g) **Use and disposition of assets of Funding Corporation not transferred to Resolution Trust Corporation—** - (1) **In general—** Subject to regulations, restrictions, and limitations prescribed by the [Thrift Depositor Protection Oversight Board](#k-7), assets of the Funding Corporation which are not required to be invested in [capital](/usc/12/51c.md) certificates issued by the Resolution Trust [Corporation](/usc/12/2277a.md?p=2) under [section 1441a of this title](/usc/12/1441a.md) and are not needed for current interest payments shall be invested in direct obligations of the United States issued by the [Secretary](#k-8). - (2) **Separate account for zero coupon instruments held to ensure payment of principal—** Except as provided in subsection (e)(8), the Funding Corporation shall invest amounts received pursuant to [subsection (e)](#e) in, and hold in a separate account to be known as the [Funding Corporation Principal Fund](#k-4), noninterest bearing instruments— - (A) which are direct obligations of the United States issued by the [Secretary](#k-8); and - (B) the total of the face amounts (the amount of principal payable at maturity) of which is approximately equal to the aggregate amount of principal on the obligations of the Funding Corporation. - (h) **Miscellaneous provisions—** - (1) **Treatment for certain purposes—** Except as provided in [subsection (f)(7)(B)](#f-7-B), the Funding Corporation shall be treated as a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) for purposes of [section 1433 of this title](/usc/12/1433.md) (to the extent such section relates to [State](/usc/12/1422.md?p=2), municipal, and local taxation) and [section 1443 of this title](/usc/12/1443.md). - (2) **Federal Reserve banks as depositaries and fiscal agents—** The Federal [Reserve banks](/usc/12/221a.md?p=a) are authorized to act as depositaries for or fiscal agents or custodians of the Funding Corporation. - (3) **Applicability of certain provisions relating to Government corporations—** The Funding Corporation shall be treated, for purposes of sections 9105,[^1] 9107, and 9108 of [title 31](/usc/31.md), as a mixed-ownership Government [corporation](/usc/12/2277a.md?p=2) which has [capital](/usc/12/51c.md) of the Government. - (4) **Jurisdiction and power to remove—** - (A) **Federal court jurisdiction—** Notwithstanding any other provision of law, any civil action, suit, or proceeding to which the Funding Corporation is a party shall be deemed to arise under the laws of the United States, and the United States [district](/usc/12/221a.md?p=a) courts shall have original jurisdiction over such action, suit, or proceeding. - (B) **Removal—** The Funding Corporation may, without bond or security, remove any such action, suit, or proceeding from a [State](/usc/12/1422.md?p=2) court to the United States [District](/usc/12/221a.md?p=a) Court for the District of Columbia. - (i) **Annual report—** - (1) **In general—** The [Thrift Depositor Protection Oversight Board](#k-7) shall annually submit a full report of the operations, activities, budget, receipts, and expenditures of the Funding Corporation for the preceding 12-month period. - (2) **Contents—** The report required under [paragraph (1)](#i-1) shall include— - (A) audited statements and any information necessary to make known the financial condition and operations of the Funding Corporation in accordance with generally accepted accounting principles; - (B) the financial operating plans and forecasts ([including](/usc/12/25b.md?p=a-3) estimates of actual and future spending, and estimates of actual and future cash obligations) of the Funding Corporation taking into account its financial commitments, guarantees, and other contingent liabilities; and - (C) the results of the annual audit of the financial transactions of the Funding Corporation conducted by the Comptroller General pursuant to [section 9105(a) of title 31](/usc/31/9105.md?p=a). - (3) **Submission to Congress and President—** The [Thrift Depositor Protection Oversight Board](#k-7) shall submit each annual report required under this subsection to the Congress and the President as soon as practicable after the end of the calendar year for which the report is made, but not later than June 30 of the year following such calendar year. - (j) **Termination of Funding Corporation—** - (1) **In general—** The Funding Corporation shall be dissolved, as soon as practicable, after the maturity and full payment of all obligations issued by the Funding Corporation under this section. - (2) **Authority of Thrift Depositor Protection Oversight Board to conclude affairs of Funding Corporation—** Effective on the date of the dissolution of the Funding Corporation under [paragraph (1)](#j-1), the [Thrift Depositor Protection Oversight Board](#k-7) may exercise on behalf of the Funding Corporation any power of the Funding Corporation which the [Thrift Depositor Protection Oversight Board](#k-7) determines to be necessary to settle and conclude the affairs of the Funding Corporation. - (k) **Definitions—** For purposes of this section, the following definitions shall apply: - (1) **Administrative expenses—** The term “administrative expenses” does not include— - (A) any interest on, or any redemption premium with respect to, any obligation of the Funding Corporation; or - (B) [issuance costs](#k-5). - (2) **Custodian fee—** The term “custodian fee” means— - (A) any fee incurred by the Funding Corporation in connection with the transfer of any security to, or the maintenance of any security in, the segregated account established under [subsection (g)](#g); and - (B) any other expense incurred by the Funding Corporation in connection with the establishment or maintenance of such account. - (3) **Funding Corporation—** The term “Funding Corporation” means the Resolution Funding Corporation established in [subsection (b)](#b). - (4) **Funding Corporation Principal Fund—** The term “Funding Corporation Principal Fund” means the separate account established under [subsection (g)(2)](#g-2). - (5) **Issuance costs—** The term “issuance costs”— - (A) means issuance fees and commissions incurred by the Funding Corporation in connection with the issuance or [servicing](/usc/12/2605.md?p=i-3) of any obligation of the Funding Corporation; and - (B) [includes](/usc/12/25b.md?p=a-3) legal and accounting expenses, trustee and fiscal and paying agent charges, costs incurred in connection with preparing and printing offering materials, and advertising expenses, to the extent that any such cost or expense is incurred by the Funding Corporation in connection with issuing any obligation. - (6) **Net earnings—** The term “net earnings” means net earnings without reduction for chargeoffs or expenses incurred by a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) for the purchase of [capital stock](/usc/12/51c.md) of the Financing [Corporation](/usc/12/2277a.md?p=2) or payments relating to the Funding Corporation required by the [Thrift Depositor Protection Oversight Board](#k-7) under subsections [(e)](#e) and [(f)](#f). - (7) **Thrift Depositor Protection Oversight Board—** The term “Thrift Depositor Protection Oversight Board” means— - (A) the [Thrift Depositor Protection Oversight Board](#k-7) of the Resolution Trust [Corporation](/usc/12/2277a.md?p=2) under [section 1441a of this title](/usc/12/1441a.md); and - (B) after the termination of the Resolution Trust [Corporation](/usc/12/2277a.md?p=2)— - (i) the [Secretary](#k-8) of the Treasury; - (ii) the Chairman of the [Board](/usc/12/221a.md?p=a)[^2] of Governors of the Federal Reserve System; and - (iii) the [Secretary](#k-8) of Housing and Urban Development. - (8) **Secretary—** The term “Secretary” means the Secretary of the Treasury. - (9) **Undivided profits—** The term “undivided profits” means earnings retained after dividends have been paid minus the sum of— - (A) that portion required to be added to reserves maintained pursuant to the first 2 sentences of [section 1436 of this title](/usc/12/1436.md); and - (B) the dollar amounts held by the respective [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) in special dividend stabilization reserves on December 31, 1985, as determined by the table set forth in [section 1441(d)(7) of this title](/usc/12/1441.md?p=d-7). - (l) **Regulations—** The [Thrift Depositor Protection Oversight Board](#k-7) may prescribe any regulations necessary to carry out this section. # §1442. Member financial information - (a) **In general—** In order to enable the [Federal Home Loan Banks](/usc/12/1422.md?p=1-A) to carry out the provisions of this chapter, the Secretary of the Treasury, the Comptroller of the Currency, the Chairman of the [Board](/usc/12/221a.md?p=a)[^1] of Governors of the Federal Reserve System, the Chairperson of the Federal [Deposit](/usc/12/5301.md?p=18-A) Insurance [Corporation](/usc/12/2277a.md?p=2), the Chairperson of the National [Credit Union](/usc/12/3423.md?p=a-1-E) Administration, and the [Director](/usc/12/1422.md?p=11) of the [Office](/usc/12/2279bb.md?p=4) of Thrift Supervision, upon request by any [Federal Home Loan Bank](/usc/12/1422.md?p=1-A)— - (1) shall make available in confidence to any [Federal Home Loan Bank](/usc/12/1422.md?p=1-A), such reports, records, or other information as may be available, relating to the condition of any [member](/usc/12/1422.md?p=3) of any [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) or any institution with respect to which any such [Bank](/usc/12/1422.md?p=1-A) has had or contemplates having transactions under this chapter; and - (2) may perform through their examiners or other employees or agents, for the confidential use of the [Federal Home Loan Bank](/usc/12/1422.md?p=1-A), examinations of institutions for which such [agency](/usc/12/1422.md?p=12) is the appropriate Federal banking regulatory [agency](/usc/12/1422.md?p=12). In addition, the Comptroller of the Currency, the Chairman of the [Board](/usc/12/221a.md?p=a)[^1] of Governors of the Federal Reserve System, the Chairperson of the National [Credit Union](/usc/12/3423.md?p=a-1-E) Administration, and the [Director](/usc/12/1422.md?p=11) of the [Office](/usc/12/2279bb.md?p=4) of Thrift Supervision shall make available to the [Director](/usc/12/1422.md?p=11) or any [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) the financial reports filed by [members](/usc/12/1422.md?p=3) of any [Bank](/usc/12/1422.md?p=1-A) to enable the [Director](/usc/12/1422.md?p=11) or a [Bank](/usc/12/1422.md?p=1-A) to compile and publish cost of [funds](/usc/12/4702.md?p=10) indices or other financial or statistical reports. - (b) **Consent by members—** Every [member](/usc/12/1422.md?p=3) of a [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) shall, as a condition precedent thereto, be deemed— - (1) to consent to such examinations as the [Bank](/usc/12/1422.md?p=1-A) or the [Director](/usc/12/1422.md?p=11) may require for the purposes of this chapter; - (2) to agree that reports of examinations by local, [State](/usc/12/1422.md?p=2), or [Federal agencies](/usc/12/3101.md?p=5) or institutions may be furnished by such authorities to the [Bank](/usc/12/1422.md?p=1-A) or the [Director](/usc/12/1422.md?p=11) upon request; and - (3) to agree to give the [Bank](/usc/12/1422.md?p=1-A) or the [Federal agency](/usc/12/3101.md?p=5), upon request, such information as they may need to compile and publish cost of [funds](/usc/12/4702.md?p=10) indices and to publish other reports or statistical summaries pertaining to the activities of [Bank](/usc/12/1422.md?p=1-A) [members](/usc/12/1422.md?p=3). # [§1442a. Repealed. Pub. L. 106–102, title VI, § 606(c), Nov. 12, 1999, 113 Stat. 1454 — repealed] # §1443. Forms of bank stock and obligations Any stock, debentures, bonds, notes, or other obligations issued under the authority of this chapter may be issued in uncertificated form, utilizing a book entry method, or in certificated form under such rules, regulations, or guidelines as the [Director](/usc/12/1422.md?p=11)[^1] may provide. # §1444. Eligibility to membership in banks - (a) Any organization organized under the laws of any [State](/usc/12/1422.md?p=2) and subject to inspection and regulation under the banking or similar laws of such [State](/usc/12/1422.md?p=2) shall be eligible to become a [member](/usc/12/1422.md?p=3) under this chapter if— - (1) it is organized solely for the purpose of supplying [credit](/usc/12/5481.md?p=7) to its [members](/usc/12/1422.md?p=3); - (2) its membership (A) is confined exclusively to building and loan [associations](/usc/12/1828.md?p=s-4-E-i), savings and loan [associations](/usc/12/1828.md?p=s-4-E-i), cooperative [banks](/usc/12/221a.md?p=a), and homestead [associations](/usc/12/1828.md?p=s-4-E-i); or (B) is confined exclusively to savings [banks](/usc/12/221a.md?p=a); and - (3) of the institutions to which its membership is confined which are organized within the [State](/usc/12/1422.md?p=2), its membership [includes](/usc/12/25b.md?p=a-3) a majority of such institutions. - (b) In all respects, but subject to such additional rules and regulations as the [Director](/usc/12/1422.md?p=11) may provide, any such organization shall be a [member](/usc/12/1422.md?p=3) for the purposes of this chapter. # §1445. Succession of Federal Home Loan Banks Each [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) shall have succession until dissolved by the [Director](/usc/12/1422.md?p=11) under this chapter or by further act of Congress. # §1446. Liquidation or reorganization; acquisition of assets by other banks; assumption of liabilities - (a) **In general—** Whenever the [Director](/usc/12/1422.md?p=11) finds that the efficient and economical accomplishment of the purposes of this chapter will be aided by such action, and in accordance with such rules, regulations, and orders as the [Director](/usc/12/1422.md?p=11) may prescribe, any [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) may be liquidated or reorganized, and its stock paid off and retired in whole or in part in connection therewith after paying or making provision for the payment of its liabilities. In the case of any such liquidation or reorganization, any other [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) may, with the approval of the [Director](/usc/12/1422.md?p=11), [acquire](/usc/12/1467a.md?p=a-1-J) assets of any such liquidated or reorganized [bank](/usc/12/1422.md?p=1-A) and assume liabilities thereof, in whole or in part. At least 30 days prior to liquidating or reorganizing any [Bank](/usc/12/1422.md?p=1-A) under this section, the [Director](/usc/12/1422.md?p=11) shall notify the [Bank](/usc/12/1422.md?p=1-A) of its determination and the facts and circumstances upon which such determination is based. The [Bank](/usc/12/1422.md?p=1-A) may contest that determination in a hearing before the [Director](/usc/12/1422.md?p=11), in which all issues shall be determined on the record pursuant to [section 554 of title 5](/usc/5/554.md). - (b) **Voluntary mergers authorized—** - (1) **In general—** Any [Federal Home Loan Bank](/usc/12/1422.md?p=1-A) may, with the approval of the [Director](/usc/12/1422.md?p=11) and of the [boards](/usc/12/221a.md?p=a) of [directors](/usc/12/1422.md?p=11) of the [Banks](/usc/12/221a.md?p=a) involved, merge with another [Bank](/usc/12/1422.md?p=1-A). - (2) **Regulations required—** The [Director](/usc/12/1422.md?p=11) shall promulgate regulations establishing the conditions and procedures for the consideration and approval of any voluntary merger described in [paragraph (1)](#b-1), [including](/usc/12/25b.md?p=a-3) the procedures for [Bank](/usc/12/1422.md?p=1-A) [member](/usc/12/1422.md?p=3) approval. # [§1447. Repealed. Pub. L. 106–102, title VI, § 606(c), Nov. 12, 1999, 113 Stat. 1454 — repealed] # §1448. Effect of partial invalidity of chapter If any provision of this chapter, or the application thereof to [any person](/usc/12/1715z–4a.md?p=a-2) or circumstances, is held invalid, the remainder of the chapter, and the application of such provision to other [persons](/usc/12/5481.md?p=19) or circumstances, shall not be affected thereby. # §1449. Reservation of right to amend or repeal chapter The right to alter, amend, or repeal this chapter is expressly reserved.