CHAPTER 11 - FEDERAL HOME LOAN BANKS

Title 12 > CHAPTER 11

Sections (50)

§ 1421 Short title

This chapter may be cited as the “Federal Home Loan Bank Act.” ( July 22, 1932, ch. 522, § 1 , 47 Stat. 725 .)

§ 1422 Definitions

As used in this chapter— The term “Federal Home Loan Bank” or “Bank” means a bank established under the authority of this chapter. The term “Federal Home Loan Bank System” means the Federal Home Loan Banks under the supervision of the Director. The term “State”, in addition to the States of the United States, includes the District of Columbia, Guam, Puerto Rico, the United States Virgin Islands, American Samoa, and the Commonwealth of the Northern Mariana Islands. The term “member” means any institution which has subscribed for the stock of a Federal Home Loan Bank. The term “home mortgage loan” means a loan made by a member upon the security of a home mortgage. The term “home mortgage” means a mortgage upon real estate, 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 was executed, upon which is located, or which comprises or includes, one or more homes or other dwelling units, all of which may be defined by the Director and shall include, in addition to first mortgages, such classes of first liens as are commonly given to secure advances on real estate by institutions authorized under this chapter to become members, under the laws of the State in which the real estate is located, together with the credit instruments, if any, secured thereby. The term “unpaid principal,” when used in respect of a loan secured by a home mortgage 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. An “amortized” or “installment” home mortgage loan shall, for the purposes of this chapter, be a home mortgage loan 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. The term “savings association” has the meaning given to such term in section 3 of the Federal Deposit Insurance Act [ 12 U.S.C. 1813 ]. The term “insured depository institution” means— an insured depository institution (as defined in section 3 of the Federal Deposit Insurance Act [ 12 U.S.C. 1813 ]), and except as used in sections 1441a 1 and 1441b of this title, an insured credit union (as defined in section 1752 of this title ). The term “community financial institution” means a member— the deposits of which are insured under the Federal Deposit Insurance Act [ 12 U.S.C. 1811 et seq.]; and that has, as of the date of the transaction at issue, less than $1, 000, 000, 000 ina v er a g e t o t a l a sse t s, ba se d o nana v er a g eo f t o t a l a sse t so v er t h e 3 ye a rs p rece d in g t ha t d a t e . T h e$ 1,000,000,000 limit referred to in subparagraph (A)(ii) shall be adjusted annually by the Director, based on the annual percentage increase, if any, in the Consumer Price Index for all urban consumers, as published by the Department of Labor. The term “Director” means the Director of the Federal Housing Finance Agency. The term “Agency” means the Federal Housing Finance Agency, established under section 4511 of this title . ( July 22, 1932, ch. 522, § 2 , 47 Stat. 725 ; June 27, 1934, ch. 847, § 507 , 48 Stat. 1264 ; May 28, 1935, ch. 150, § 1 , 49 Stat. 293 ; July 14, 1952, ch. 723, § 10(c) , 66 Stat. 604 ; Pub. L. 86–70, § 9(a) , June 25, 1959 , 73 Stat. 142 ; Pub. L. 86–624, § 5(a) , July 12, 1960 , 74 Stat. 411 ; Pub. L. 87–779, § 2(a) , Oct. 9, 1962 , 76 Stat. 779 ; Pub. L. 101–73, title VII , §§ 701(a), 710(b)(1), Aug. 9, 1989 , 103 Stat. 411 , 418; Pub. L. 106–102, title VI, § 602 , Nov. 12, 1999 , 113 Stat. 1450 ; Pub. L. 110–289, div. A, title II , §§ 1203, 1204(8), (10), 1211(a), July 30, 2008 , 122 Stat. 2785 , 2786, 2790.)

§§ 1422a, 1422b Repealed. Pub. L. 110–289, div. A, title II, § 1204(1), July 30, 2008, 122 Stat. 2785

§ 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 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. Such districts 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 to be formed under this chapter, but no such district shall contain a fractional part of any State. The districts thus created may be readjusted and new districts may from time to time be created by the Director, not to exceed twelve in all. Such districts shall be known as Federal Home Loan Bank districts and may be designated by number. As soon as practicable the Director shall establish, in each district, a Federal Home Loan Bank at such city as may be designated by the Director. Its title shall include the name of the city at which it is established.

(b) Authority to reduce districts Notwithstanding subsection (a), the number of districts may be reduced to a number less than 8— pursuant to a voluntary merger between Banks, as approved pursuant to section 1446(b) of this title ; or pursuant to a decision by the Director to liquidate a Bank pursuant to section 4617 of this title .

§ 1424 Eligibility for membership

(a) Criteria for eligibility Any building and loan association, savings and loan association, cooperative bank, homestead association, insurance company, savings bank, community development financial institution, or any insured depository institution (as defined in section 1422 of this title ), shall be eligible to become a member of a Federal Home Loan Bank if such institution— is duly organized under the laws of any State or of the United States; is subject to inspection and regulation under the banking laws, or under similar laws, of the State or of the United States or, in the case of a community development financial institution, is certified as a community development financial institution under the Community Development Banking and Financial Institutions Act of 1994 [ 12 U.S.C. 4701 et seq.].; 1 and makes such home mortgage loans as, in the judgment of the Director, are long-term loans (except that in the case of a savings bank, this subparagraph applies only if, in the judgment of the Director, its time deposits, as defined in section 461 of this title , warrant its making such loans). An insured depository institution that is not a member on January 1, 1989 , may become a member of a Federal Home Loan Bank only if— the insured depository institution (other than a community financial institution) has at least 10 percent of its total assets in residential mortgage loans; the insured depository institution’s financial condition is such that advances may be safely made to such institution; and the character of its management and its home-financing policy are consistent with sound and economical home financing. An insured depository institution commencing its initial business operations after January 1, 1989 , may become a member of a Federal Home Loan Bank if it complies with regulations and orders prescribed by the Director for the 10 percent asset requirement (described in the 2 paragraph (2)) within one year after the commencement of its operations. A community financial institution that otherwise meets the requirements of paragraph (2) may become a member without regard to the percentage of its total assets that is represented by residential mortgage loans, as described in subparagraph (A) of paragraph (2). Subject to the requirements of subparagraph (B), a credit union shall be treated as an insured depository institution for purposes of determining the eligibility of such credit union for membership in a Federal home loan bank under paragraphs (1), (2), and (3). For purposes of this paragraph and subject to clause (ii), a credit union which lacks Federal deposit insurance and which has applied for membership in a Federal home loan bank may be treated as meeting all the eligibility requirements for Federal deposit insurance only if the appropriate supervisor of the State in which the credit union is chartered has determined that the credit union meets all the eligibility requirements for Federal deposit insurance as of the date of the application for membership. If, in the case of any credit union to which clause (i) applies, the appropriate supervisor of the State in which such credit union 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 shall be deemed to have met the requirements of clause (i). Notwithstanding any provision of State law authorizing a conservator or liquidating agent of a credit union to repudiate contracts, no such provision shall apply with respect to— any extension of credit from any Federal home loan bank to any credit union which is a member of any such bank pursuant to this paragraph; or any security interest in the assets of such credit union securing any such extension of credit. Notwithstanding any State law to the contrary, if a Bank makes an advance under section 1430 of this title to a State-chartered credit union that is not federally insured— the Bank’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; and the Bank has the same right to access such collateral that the Bank would have had if the advance had been made to a federally insured credit union.

(b) Location requirement An institution eligible to become a member under this section may become a member only of, or secure advances from, the Federal Home Loan Bank of the district in which is located the institution’s principal place of business, or of the bank of a district adjoining such district, if demanded by convenience and then only with the approval of the Director.

(c) Inspection and regulation requirements Notwithstanding the provisions of clause (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 which would be eligible to become a member of a Federal Home Loan Bank except for the fact that it is not subject to inspection and regulation under the banking laws or similar laws of the State in which such association is organized shall, upon subjecting itself to such inspection and regulation as the Director shall prescribe, be eligible to become a member.

§§ 1425 to 1425b Repealed. Pub. L. 101–73, title VII, §§ 705, 716, 720, Aug. 9, 1989, 103 Stat. 416, 421, 423

§ 1426 Capital structure of Federal home loan banks

(a) Regulations Not later than 18 months after November 12, 1999 , the Director shall issue regulations prescribing uniform capital standards applicable to each Federal home loan bank, which shall require each such bank to meet— the leverage requirement specified in paragraph (2); and the risk-based capital requirements, in accordance with paragraph (3). The leverage requirement shall require each Federal home loan bank to maintain a minimum amount of total capital based on the total assets of the bank and shall be 5 percent. In determining compliance with the minimum leverage ratio established under subparagraph (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 for purposes of meeting the 5 percent minimum leverage ratio, except that a Federal home loan bank’s total capital (determined without taking into account any such multiplier) shall not be less than 4 percent of the total assets of the bank. The Director shall, by regulation, establish risk-based capital standards for the Federal Home Loan Banks to ensure that the Federal Home Loan Banks operate in a safe and sound manner, with sufficient permanent capital and reserves to support the risks that arise in the operations and management of the Federal Home Loans Banks. In establishing the risk-based standard under subparagraph (A), the Director shall take due consideration of any risk-based capital test established pursuant to section 1361 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 ( 12 U.S.C. 4611 ) for the enterprises (as defined in that Act [ 12 U.S.C. 4501 et seq.]), with such modifications as the Director determines to be appropriate to reflect differences in operations between the Federal home loan banks and those enterprises. The regulations issued by the Director under paragraph (1) shall— permit each Federal home loan bank to issue, with such rights, terms, and preferences, not inconsistent with this chapter and the regulations issued hereunder, as the board of directors of that bank may approve, any 1 or more of— Class A stock, which shall be redeemable in cash and at par 6 months following submission by a member of a written notice of its intent to redeem such shares; and Class B stock, which shall be redeemable in cash and at par 5 years following submission by a member of a written notice of its intent to redeem such shares; provide that the stock of a Federal home loan bank may be issued to and held by only members of the bank, and that a bank may not issue any stock other than as provided in this section; prescribe the manner in which stock of a Federal home loan bank may be sold, transferred, redeemed, or repurchased; and provide the manner of disposition of outstanding stock held by, and the liquidation of any claims of the Federal home loan bank against, an institution that ceases to be a member of the bank, through merger or otherwise, or that provides notice of intention to withdraw from membership in the bank. For purposes of determining compliance with the capital standards established under this subsection— permanent capital of a Federal home loan bank shall include— the amounts paid for the Class B stock; and the retained earnings of the bank (as determined in accordance with generally accepted accounting principles); and total capital of a Federal home loan bank shall include— permanent capital; the amounts paid for the Class A stock; consistent with generally accepted accounting principles, and subject to the regulation of the Director, a general allowance for losses, which may not include any reserves or allowances made or held against specific assets; and any other amounts from sources available to absorb losses incurred by the bank that the Director determines by regulation to be appropriate to include in determining total capital. Notwithstanding any other provision of this chapter, the requirements relating to purchase and retention of capital stock of a Federal home loan bank by any member thereof in effect on the day before November 12, 1999 , shall continue in effect with respect to each Federal home loan bank until the regulations required by this subsection have taken effect and the capital structure plan required by subsection (b) has been approved by the Director and implemented by such bank.

(b) Capital structure plan Not later than 270 days after the date of publication by the Director of final regulations in accordance with subsection (a), the board of directors of each Federal home loan bank shall submit for approval by the Director a plan establishing and implementing a capital structure for such bank that— the board of directors determines is best suited for the condition and operation of the bank and the interests of the members of the bank; meets the requirements of subsection (c); and meets the minimum capital standards and requirements established under subsection (a) and other regulations prescribed by the Director. The board of directors of a Federal home loan bank shall submit to the Director for approval any modifications that the bank proposes to make to an approved capital structure plan.

(c) Contents of plan The capital structure plan of each Federal home loan bank shall contain provisions addressing each of the following: Each capital structure plan of a Federal home loan bank shall require each member of the bank to maintain a minimum investment in the stock of the bank, the amount of which shall be determined in a manner to be prescribed by the board of directors of each bank and to be included as part of the plan. In establishing the minimum investment required for each member under subparagraph (A), a Federal home loan bank may, in its discretion, include any 1 or more of the requirements referred to in clause (ii), or any other provisions approved by the Director. A requirement is referred to in this clause if it is a requirement for— a stock purchase based on a percentage of the total assets of a member; or a stock purchase based on a percentage of the outstanding advances from the bank to the member. Each capital structure plan of a Federal home loan bank shall require that the minimum stock investment established for members shall be set at a level that is sufficient for the bank to meet the minimum capital requirements established by the Director under subsection (a). The capital structure plan of each Federal home loan bank shall impose a continuing obligation on the board of directors of the bank to review and adjust the minimum investment required of each member of that bank, as necessary to ensure that the bank remains in compliance with applicable minimum capital levels established by the Director, and shall require each member to comply promptly with any adjustments to the required minimum investment. The capital structure plan of each Federal home loan bank 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 to come into compliance with the capital requirements prescribed under subsection (a), and to allow any institution that was a member of the bank on November 12, 1999 , to come into compliance with the minimum investment required pursuant to the plan. The capital structure plan of a Federal home loan bank may allow any member referred to in subparagraph (A) that would be required by the terms of the capital structure plan to increase its investment in the stock of the bank to do so in periodic installments during the transition period. The capital structure plan of a Federal home loan bank shall provide for the manner of disposition of any stock held by a member of that bank that terminates its membership or that provides notice of its intention to withdraw from membership in that bank. The capital structure plan of a Federal home loan bank shall afford each member of that bank the option of maintaining its required investment in the bank through the purchase of any combination of classes of stock authorized by the board of directors of the bank and approved by the Director in accordance with its regulations. A Federal home loan bank shall include in its capital structure plan provisions establishing terms, rights, and preferences, including minimum investment, dividends, voting, and liquidation preferences of each class of stock issued by the bank, consistent with regulations of the Director and market requirements. The capital structure plan of a Federal home loan bank may provide for a reduced minimum stock investment for any member of that bank that elects to purchase Class B 1 in a manner that is consistent with meeting the minimum capital requirements of the bank, as established by the Director. The capital structure plan of a Federal home loan bank shall provide for the liquidation in an orderly manner, as determined by the bank, of any claim of that bank against a member, including claims for any applicable prepayment fees or penalties resulting from prepayment of advances prior to stated maturity. The capital structure plan of a Federal home loan bank shall— provide that any stock issued by that bank shall be available only to and held only by members of that bank and tradable only between that bank and its members; and establish standards, criteria, and requirements for the issuance, purchase, transfer, retirement, and redemption of stock issued by that bank. Before filing a capital structure plan with the Director, each Federal home loan bank shall conduct a review of the plan by— 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 stock investment of its members; and at least one major credit rating agency, to determine, to the extent possible, whether implementation of the plan would have any material effect on the credit ratings of the bank.

(d) Termination of membership Any member may withdraw from a Federal home loan bank if the member provides written notice to the bank of its intent to do so and if, on the date of withdrawal, there is in effect a certification by the Director that the withdrawal will not cause the Federal Home Loan Bank System to fail to meet its obligation under section 1441b(f)(2)(C) of this title to contribute to the debt service for the obligations issued by the Resolution Funding Corporation. The applicable stock redemption notice periods shall commence upon receipt of the notice by the bank. Upon the expiration of the applicable notice period for each class of redeemable stock, the member may surrender such stock to the bank, and shall be entitled to receive in cash the par value of the stock. During the applicable notice periods, the member shall be entitled to dividends and other membership rights commensurate with continuing stock ownership. The board of directors of a Federal home loan bank may terminate the membership of any institution if, subject to regulations of the Director, it determines that— the member has failed to comply with a provision of this chapter or any regulation prescribed under this chapter; or the member 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 authority with regulatory and supervisory responsibility for the member. An institution, the membership of which is terminated in accordance with subparagraph (A)— shall surrender redeemable stock to the Federal home loan bank, and shall receive in cash the par value of the stock, upon the expiration of the applicable notice period under subsection (a)(4)(A); shall receive any dividends declared on its redeemable stock, during the applicable notice period under subsection (a)(4)(A); and shall not be entitled to any other rights or privileges accorded to members after the date of the termination. With respect to an institution, the membership of which is terminated in accordance with subparagraph (A), the applicable notice period under subsection (a)(4) for each class of redeemable stock shall commence on the earlier of— the date of such termination; or the date on which the member has provided notice of its intent to redeem such stock. Upon the termination of the membership of an institution for any reason, the outstanding indebtedness of the member to the bank shall be liquidated in an orderly manner, as determined by the bank and, upon the extinguishment of all such indebtedness, the bank shall return to the member all collateral pledged to secure the indebtedness.

(e) Redemption of excess stock A Federal home loan bank, in its sole discretion, may redeem or repurchase, as appropriate, any shares of Class A or Class B stock issued by the bank and held by a member that are in excess of the minimum stock investment required of that member. Shares of stock held by a member shall not be deemed to be “excess stock” for purposes of this subsection by virtue of a member’s submission of a notice of intent to withdraw from membership or termination of its membership in any other manner. A Federal home loan bank may not redeem any excess Class B stock prior to the end of the 5-year notice period, unless the member has no Class A stock outstanding that could be redeemed as excess.

(f) Impairment of capital If the Director or the board of directors of a Federal home loan bank determines that the bank has incurred or is likely to incur losses that result in or are expected to result in charges against the capital of the bank, the bank shall not redeem or repurchase any stock of the bank without the prior approval of the Director while such charges are continuing or are expected to continue. In no case may a bank redeem or repurchase any applicable capital stock if, following the redemption, the bank would fail to satisfy any minimum capital requirement.

(g) Rejoining after divestiture of all shares Except as provided in paragraph (2), and notwithstanding any other provision of this chapter, an institution that divests all shares of stock in a Federal home loan bank may not, after such divestiture, acquire shares of any Federal home loan bank 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. Any institution that withdrew from membership in any Federal home loan bank before December 31, 1997 , may acquire shares of a Federal home loan bank at any time after that date, subject to the approval of the Director and the requirements of this chapter.

(h) Treatment of retained earnings The holders of the Class B stock of a Federal home loan bank shall own the retained earnings, surplus, undivided profits, and equity reserves, if any, of the bank. Except as specifically provided in this section or through the declaration of a dividend or a capital distribution by a Federal home loan bank, or in the event of liquidation of the bank, a member shall have no right to withdraw or otherwise receive distribution of any portion of the retained earnings of the bank. A Federal home loan bank may not make any distribution of its retained earnings unless, following such distribution, the bank would continue to meet all applicable capital requirements.

§ 1426a Exclusion from certain requirements

(a) In general The Federal Home Loan Banks shall be exempt from compliance with— sections 78m(e), 78n(a), and 78n(c) of title 15, and related Commission regulations; section 78 o of title 15, and related Commission regulations, with respect to transactions in the capital stock of a Federal Home Loan Bank; section 78q–1 of title 15 , and related Commission regulations, with respect to the transfer of the securities of a Federal Home Loan Bank; and the Trust Indenture Act of 1939 [ 15 U.S.C. 77aaa et seq.].

(b) Member exemption The members of the Federal Home Loan Bank System shall be exempt from compliance with sections 78m(d), 78m(f), 78m(g), 78n(d), and 78p of title 15, and related Commission regulations, with respect to ownership of or transactions in the capital stock of the Federal Home Loan Banks by such members.

(c) Exempted and Government securities The capital stock issued by each of the Federal Home Loan Banks under section 1426 of this title are— exempted securities, within the meaning of section 77c(a)(2) of title 15 ; and exempted securities, within the meaning of section 78c(a)(12)(A) of title 15 , except to the extent provided in section 78 oo of title 15. The debentures, bonds, and other obligations issued under section 1431 of this title are— exempted securities, within the meaning of section 77c(a)(2) of title 15 ; government securities, within the meaning of section 78c(a)(42) of title 15 ; and government securities, within the meaning of section 80a–2(a)(16) of title 15 . A person (other than a Federal Home Loan Bank effecting transactions for members of the Federal Home Loan Bank System) that effects transactions in the capital stock or other obligations of a Federal Home Loan Bank, for the account of others or for that person’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 , but is excluded from the definition of— the term “government securities broker” under section 78c(a)(43) of title 15 ; and the term “government securities dealer” under section 78c(a)(44) of title 15 .

(d) Exemption from reporting requirements The Federal Home Loan Banks shall be exempt from periodic reporting requirements under the securities laws pertaining to the disclosure of— related party transactions that occur in the ordinary course of the business of the Banks with members; and the unregistered sales of equity securities.

(e) Tender offers Commission rules relating to tender offers shall not apply in connection with transactions in the capital stock of the Federal Home Loan Banks.

(f) Regulations The Commission 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. In issuing regulations under this section, the Commission shall consider the distinctive characteristics of the Federal Home Loan Banks when evaluating— the accounting treatment with respect to the payment to the Resolution Funding Corporation; the role of the combined financial statements of the Federal Home Loan Banks; the accounting classification of redeemable capital stock; and the accounting treatment related to the joint and several nature of the obligations of the Banks.

(g) Definitions As used in this section— the terms “Bank”, “Federal Home Loan Bank”, “member”, and “Federal Home Loan Bank System” have the same meanings as in section 1422 of this title ; the term “Commission” means the Securities and Exchange Commission; and the term “securities laws” has the same meaning as in section 78c(a)(47) of title 15 .

§ 1427 Directors

(a) Number; election; qualifications; conflicts of interest Subject to paragraphs (2) through (4), the management of each Federal Home Loan Bank shall be vested in a board of 13 directors, or such other number as the Director determines appropriate. The board of directors of each Bank shall be comprised of— member directors, who shall comprise at least the majority of the members of the board of directors; and independent directors, who shall comprise not fewer than ⅖ of the members of the board of directors. Each member of the board of directors shall be— elected by plurality vote of the members, in accordance with procedures established under this section; and a citizen of the United States. Each independent director that is not a public interest director under clause (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 may provide by regulation. Not fewer than 2 of the independent directors shall have more than 4 years of experience in representing consumer or community interests on banking services, credit needs, housing, or financial consumer protections. No independent director may, during the term of service on the board of directors, serve as an officer of any Federal Home Loan Bank or as a director, officer, or employee of any member of a Bank, or of any person that receives advances from a Bank. For purposes of this section, the following definitions shall apply: The terms “independent director” and “independent directorship” mean a member of the board of directors of a Federal Home Loan Bank who is a bona fide resident of the district in which the Federal Home Loan Bank is located, or the directorship held by such a person, respectively. The terms “member director” and “member directorship” mean a member of the board of directors of a Federal Home Loan Bank who is an officer or director of a member institution that is located in the district in which the Federal Home Loan Bank is located, or the directorship held by such a person, respectively.

(b) Directorships Each member directorship shall be designated by the Director as representing the members located in a particular State, and shall be filled by a person who is an officer or director of a member located in that State, each of which members shall be entitled to nominate an eligible person for such directorship, and such office 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, in which election each such member may cast for such office a number of votes equal to the number of shares of stock in such bank required by this chapter to be held by such member at the end of the calendar year next preceding the election, as determined pursuant to regulation of the Director, but not in excess of the average number of shares of stock in such bank required by this chapter to be held at the end of such calendar year by the respective members of such bank located in such State, as so determined. No person who is an officer or director of a member that fails to meet any applicable capital requirement is eligible to hold the office of Federal Home Loan Bank director. As used in this subsection and in subsection (c) of this section, the term “member” means a member of a Federal home loan bank which was a member of such bank at the end of such calendar year. Each independent director— shall be elected by the members entitled to vote, from among eligible persons nominated, after consultation with the Advisory Council of the Bank, by the board of directors of the Bank; and shall be elected by a plurality of the votes of the members of the Bank at large, with each member having the number of votes for each such directorship as it has under paragraph (1) in an election to fill member directorships. Nominees shall meet all applicable requirements prescribed in this section. Procedures for nomination and election of independent directors shall be prescribed by the bylaws of each Federal Home Loan Bank, in a manner consistent with the rules and regulations of the Agency.

(c) Apportionment among States in bank district; designation of State location The number of member directorships designated as representing the members located in each separate State in a bank district shall be determined by the Director in the approximate ratio of the percentage of the required stock, as determined pursuant to regulation of the Director, of the members located in that State 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 at the end of such year, except that in the case of each State 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 so designated as representing the members located in any State would not be at least equal to the total number of elective directorships which, on December 31, 1960 , were filled by officers or directors of members whose principal places of business were located in such State, the Director shall add to the board of directors of the bank of the district in which such State is located such number of member directorships, and shall so designate the directorship or directorships thus added, that the number of member directorships designated as representing the members located in such State will equal said total number, and (B) clause (A) of this sentence shall not apply to the directorships of any Federal Home Loan Bank resulting from the merger of any 2 or more such Banks. Any member directorship so added shall exist only until the expiration of its first term. The Director shall, with respect to each member of a Federal home loan bank, designate the State in the district of such bank in which such member shall, for the purposes of this subsection and subsection (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 is located in a State of such district it shall be the duty of the Director to designate such State as the State in which such member 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 of directors of the bank of the district in which such State was located on December 31, 1960 , and the term “members” where used for the second time in such sentence means members of such bank.

(d) Terms; rules and regulations governing nominations and elections The term of each director shall be 4 years. The board of directors of each Federal home loan bank and the Director shall adjust the terms of members first elected after July 30, 2008 , to ensure that the terms of the members of the board of directors are staggered with approximately ¼ of the terms expiring each year. If any person, 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 of a Federal home loan bank and has served for all or part of each of said terms, such person shall not be eligible for election to a directorship of such bank for a term which begins earlier than two years after the expiration of the last expiring of said three terms. The Director is authorized to prescribe such rules and regulations as it may deem necessary or appropriate for the nomination and election of directors of Federal home loan banks, including, 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 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 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, by regulation or otherwise, may add an additional elective directorship to the board of directors of the bank of any district 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, pursuant to subsection (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.

(f) Vacancies A Bank director elected to fill a vacancy shall be elected for the unexpired term of his or her predecessor in office. In the event of a vacancy in any Bank directorship, such vacancy shall be filled by an affirmative vote of a majority of the remaining Bank directors, regardless of whether such remaining Bank directors constitute a quorum of the Bank’s board of directors. A Bank director so elected shall satisfy the requirements for eligibility which were applicable to his predecessor. If any Bank director shall cease to have any qualification set forth in this section, the office held by such person shall immediately become vacant, and such person shall not continue to act as a Bank director.

(g) Chairperson and Vice Chairperson The Chairperson and Vice Chairperson of the board of directors of each Federal home loan bank shall be elected by a majority of all the directors of such bank from among the directors of the bank. The term of office of the Chairperson and the Vice Chairperson of the board of directors of a Federal home loan bank shall be 2 years. In the event of a vacancy in the position of Chairperson of the board of directors or during the absence or disability of the Chairperson, the Vice Chairperson shall act as Chairperson. The board of directors of each Federal home loan bank shall establish procedures, in the bylaws of such board, 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 from any such position for good cause.

**(h) Appointment where members hold less than $1, 000, 000 o f c a p i t a l s t oc k * * I f a t an y t im e w h e nn o mina t i o n s a rere q u i re d m e mb erss ha ll h o l d l ess t han$ 1,000,000 of the capital stock of the Federal home loan bank, the Director shall appoint a director or directors to fill the place or places for which such nominations are required, and the Director may, prior to the filing of the certificate mentioned in section 1432 of this title , appoint directors who shall be respectively designated by it as appointive directors and as member directors, in accordance with the provisions of this section.

(i) Directors’ compensation Each bank may pay its directors 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, subject to the approval of the board. The Director shall include, in the annual report submitted to the Congress pursuant to section 4521 of this title , information regarding the compensation and expenses paid by the Federal Home Loan Banks to the directors on the boards of directors of the Banks.

(j) Duties of directors Such board of directors shall administer the affairs of the bank fairly and impartially and without discrimination in favor of or against any member, 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 standing for the Federal Home Loan Bank and its obligations.

(k) Indemnification of directors, officers, and employees The board of directors of each Bank shall determine the terms and conditions under which such Bank may indemnify its directors, officers, employees or agents.

(l) 22 So in original. Two subsecs. (l) have been enacted. Withholding of compensation Notwithstanding any other provision of this section, a Federal Home Loan Bank shall not transfer, disburse, or pay compensation to any executive officer, or enter into an agreement with such executive officer, without the approval of the Director, for matters being reviewed under section 4518 of this title .

(l) 2 Transition rule Any member of the board of directors of a Bank elected or appointed in accordance with this section prior to July 30, 2008 , may continue to serve as a member of that board of directors for the remainder of the existing term of service.

§ 1428 Examination of State laws, regulations, and procedures; studies of values, etc.

The Director shall cause to be made from time to time examinations of the laws of the various States of the United States and the regulations and procedure thereunder governing conditions under which institutions of the kinds which may become members 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 on lands securing loans, or otherwise. If any such examination shall indicate, in the opinion of the Director, that under the laws of any such State or the regulations or procedure thereunder there would be inadequate protection to a Federal Home Loan Bank in making or collecting advances under this chapter, the Director may withhold or limit the operation of any Federal Home Loan Bank in such State until satisfactory conditions of law, regulation, or procedure shall be established. In any State where State examination of members or nonmember borrowers is deemed inadequate for the purposes of the Federal Home Loan Banks, the Director 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. The banks and/or the Director 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. ( July 22, 1932, ch. 522, § 8 , 47 Stat. 731 ; Pub. L. 101–73, title VII, § 701(b)(1) , (3)(A), Aug. 9, 1989 , 103 Stat. 412 ; Pub. L. 110–289, div. A, title II, § 1204(8) , (9), July 30, 2008 , 122 Stat. 2786 .)

§ 1428a Repealed. Pub. L. 101–73, title VII, § 718, Aug. 9, 1989, 103 Stat. 422

§ 1429 Eligibility to secure advances

Any member of a Federal Home Loan Bank 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. Such Federal Home Loan Bank may at its discretion deny any such application, or may grant it on such conditions as the Federal Home Loan Bank may prescribe. ( July 22, 1932, ch. 522, § 9 , 47 Stat. 731 ; Pub. L. 101–73, title VII , §§ 701(b)(1), (3)(A), 710(a), Aug. 9, 1989 , 103 Stat. 412 , 418; Pub. L. 106–102, title VI, § 606(f)(1) , Nov. 12, 1999 , 113 Stat. 1455 .)

§ 1430 Advances to members

(a) In general Each Federal Home Loan Bank is authorized to make secured advances to its members upon collateral sufficient, in the judgment of the Bank, to fully secure advances obtained from the Bank under this section or section 1431(g) of this title . A long-term advance may only be made for the purposes of— providing funds to any member for residential housing finance; and providing funds to any community financial institution for small businesses, small farms, small agri-businesses, and community development activities. A Bank, 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: Fully disbursed, whole first mortgages on improved residential property (not more than 90 days delinquent), or securities representing a whole interest in such mortgages. Securities issued, insured, or guaranteed by the United States Government or any agency thereof (including without limitation, mortgage-backed securities issued or guaranteed by the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Corporation, and the Government National Mortgage Association). Cash or deposits of a Federal Home Loan Bank. Other real estate related collateral acceptable to the Bank if such collateral has a readily ascertainable value and the Bank can perfect its interest in the collateral. Secured loans for small business, agriculture, or community development activities or securities representing a whole interest in such secured loans, in the case of any community financial institution. Subparagraphs (A) through (E) of paragraph (3) shall not affect the ability of any Federal Home Loan Bank to take such steps as it deems necessary to protect its security position with respect to outstanding advances, including requiring deposits 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 does not have sufficient eligible collateral to fully secure a renewal of such advance, a Bank may renew such advance secured by such collateral as the Bank determines is appropriate. A member 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. The Director may review the collateral standards applicable to each Federal home loan bank for the classes of collateral described in subparagraphs (D) and (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. 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.

(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 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 otherwise eligible to be accepted as collateral security for an advance by a Home Loan Bank shall be accepted if any director, officer, employee, attorney or agent of the Home Loan Bank or of the borrowing institution is personally liable thereon, unless the Director 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 secured as provided in this section, bearing such rate of interest as the Federal home loan bank may approve or determine, and the Federal Home Loan Bank shall have a lien upon and shall hold the stock of such member as further collateral security for all indebtedness of the member to the Federal Home Loan Bank.

(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. The bank shall reserve the right to require at any time, when deemed necessary for its protection, deposits 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 shall have power to sell to any other Federal Home Loan Bank, with or without recourse, any advance made under the provisions of this chapter, or to allow to such bank a participation therein, and any other Federal Home Loan Bank shall have power to purchase such advance or to accept a participation 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 by any member of any Federal Home Loan Bank or any affiliate of any such member shall be entitled to priority over the claims and rights of any party (including any receiver, conservator, trustee, or similar party having rights of a lien creditor) other than claims and rights that— would be entitled to priority under otherwise applicable law; and are held by actual bona fide purchasers for value or by actual secured parties that are secured by actual perfected security interests.

(g) 11 So in original. No subsec. (f) has been enacted. Community support requirements Before the end of the 2-year period beginning on August 9, 1989 , the Director shall adopt regulations establishing standards of community investment or service for members of Banks to maintain continued access to long-term advances. The regulations promulgated pursuant to paragraph (1) shall take into account factors such as a member’s performance under the Community Reinvestment Act of 1977 [ 12 U.S.C. 2901 et seq.] and the member’s record of lending to first-time homebuyers.

(h) Special liquidity advances Subject to paragraph (2), the Federal Home Loan Banks may, upon the request of the Director of the Office of Thrift Supervision, make short-term liquidity advances to a savings association that— is solvent but presents a supervisory concern because of such association’s poor financial condition; and has reasonable and demonstrable prospects of returning to a satisfactory financial condition. Any loan by a Federal Home Loan Bank pursuant to paragraph (1) shall be subject to all applicable collateral requirements, including the requirements of subsection (a), and shall be at an interest rate no less favorable than those made available for similar short-term liquidity advances to savings associations that do not present such supervisory concern.

(i) Community investment program Each Bank shall establish a program to provide funding for members to undertake community-oriented mortgage lending. Each Bank shall designate a community investment officer to implement community lending and affordable housing advance programs of the Banks under this subsection and subsection (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 obligations of comparable maturities, taking into account reasonable administrative costs. For purposes of this subsection, the term “community-oriented mortgage lending” means providing loans— to finance home purchases by families whose income does not exceed 115 percent of the median income for the area, to finance purchase or rehabilitation of housing for occupancy by families whose income does not exceed 115 percent of median income for the area, to finance commercial and economic development activities that benefit low- and moderate-income families or activities that are located in low- and moderate-income neighborhoods, and to finance projects that further a combination of the purposes described in subparagraphs (A) through (C).

(j) Affordable housing program Pursuant to regulations promulgated by the Director, each Bank shall establish an Affordable Housing Program to subsidize the interest rate on advances to members engaged in lending for long term, low- and moderate-income, owner-occupied and affordable rental housing at subsidized interest rates. The Board’s 2 regulations shall permit Bank members to use subsidized advances received from the Banks to— finance homeownership by families with incomes at or below 80 percent of the median income for the area; 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 for the remaining useful life of such housing or the mortgage term; or during the 2-year period beginning on July 30, 2008 , use such percentage as the Director may by regulation establish of any subsidized advances set aside to finance homeownership under subparagraph (A) to refinance loans that are secured by a first mortgage on a primary residence of any family having an income at or below 80 percent of the median income for the area. In using advances authorized under paragraph (1), each Bank member shall give priority to qualified projects such as the following: purchase of homes by families whose income is 80 percent or less of the median income for the area, purchase or rehabilitation of housing owned or held by the United States Government or any agency or instrumentality of the United States; and purchase or rehabilitation of housing sponsored by any nonprofit organization, any State or political subdivision of any State, any local housing authority or State housing finance agency. Each member receiving advances under this program shall report annually to the Bank making such advances concerning the member’s use of advances received under this program. Each Bank shall annually contribute the percentage of its annual net earnings prescribed in the following subparagraphs to support subsidized advances through the Affordable Housing Program: In 1990, 1991, 1992, and 1993, 5 percent of the preceding year’s net income, or such prorated sums as may be required to assure that the aggregate contribution of all the Banks shall not be less than $50, 000, 000 f ore a c h s u c h ye a r . I n 1994, 6 p erce n t o f t h e p rece d in g ye a r ’ s n e t in co m e, ors u c h p ror a t e d s u ma s ma y b ere q u i re d t o a ss u re t ha tt h e a gg re g a t eco n t r ib u t i o n o f t h e B ank ss ha ll n o t b e l ess t han$ 75,000,000 for such year. In 1995, and subsequent years, 10 percent of the preceding year’s net income, or such prorated sums as may be required to assure that the aggregate contribution of the Banks shall not be less than $100,000,000 for each such year. If a Bank finds that the payments required under this paragraph are contributing to the financial instability of such Bank, it may apply to the Director for a temporary suspension of such payments. In determining the financial instability of a Bank, the Director shall consider such factors as (i) whether the Bank’s earnings are severely depressed, (ii) whether there has been a substantial decline in membership capital, and (iii) whether there has been a substantial reduction in advances outstanding. The Director shall review the application and any supporting financial data and issue a written decision approving or disapproving such application. The Board’s 2 decision shall be accompanied by specific findings and reasons for its action. If the Director grants a suspension, it shall specify the period of time such suspension shall remain in effect and shall continue to monitor the Bank’s financial condition during such suspension. The Director shall not suspend payments to the Affordable Housing Program if the Bank’s reduction in earnings is a result of (i) a change in the terms for advances to members which is not justified by market conditions, (ii) inordinate operating and administrative expenses, or (iii) mismanagement. The Director 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. If any Bank 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 in an Affordable Housing Reserve Fund administered by the Director. The 10 percent of the unutilized and uncommitted amount retained by a Bank should be fully utilized or committed by that Bank during the following year and any remaining portion must be deposited in the Affordable Housing Reserve Fund. Under regulations established by the Director, funds from the Affordable Housing Reserve Fund may be made available to any Bank to meet additional affordable housing needs in such Bank’s district pursuant to this section. The net earnings of any Federal Home Loan Bank shall be determined for purposes of this paragraph— after reduction for any payment required under section 1441 or 1441b of this title; and before declaring any dividend under section 1436 of this title . The Director shall promulgate regulations to implement this subsection. Such regulations shall, at a minimum— specify activities eligible to receive subsidized advances from the Banks under this program; specify priorities for the use of such advances; 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; ensure that a preponderance of assistance provided under this subsection is ultimately received by low- and moderate-income households; ensure that subsidies provided by Banks to member institutions under this program are passed on to the ultimate borrower; establish uniform standards for subsidized advances under this program and subsidized lending by member institutions supported by such advances, including maximum subsidy and risk limitations for different categories of loans made under this subsection; and coordinate activities under this subsection with other Federal or federally-subsidized affordable housing activities to the maximum extent possible. No provision of this subsection or subsection (i) shall preclude any Bank from establishing additional community investment cash advance programs or contributing additional sums to the Affordable Housing Reserve Fund. Each Bank shall appoint an Advisory Council of 7 to 15 persons drawn from community and nonprofit organizations actively involved in providing or promoting low- and moderate-income housing in its district. The Advisory Council shall meet with representatives of the board of directors of the Bank quarterly to advise the Bank on low- and moderate-income housing programs and needs in the district and on the utilization of the advances for these purposes. Each Advisory Council established under this paragraph shall submit to the Director at least annually its analysis of the low-income housing activity of the Bank by which it is appointed. The Director shall monitor and report annually to the Congress and the Advisory Council for each Bank the support of low-income housing and community development by the Banks and the utilization of advances for these purposes. The analyses submitted by the Advisory Councils to the Director under paragraph (11) shall be included as part of the report required by this paragraph. The Director 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, including an analysis of collateral by type and by Bank district. The Director shall submit the reports under subparagraphs (A) and (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 . For purposes of this subsection— The term “low- or moderate-income household” means any household which has an income of 80 percent or less of the area median. The term “very low-income household” means any household that has an income of 50 percent or less of the area median. 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. For purposes of paragraph (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 shall not exceed 30 percent of the adjusted income of a family 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 size.

(k) Public use database Each Federal Home Loan Bank shall provide to the Director, in a form determined by the Director, census tract level data relating to mortgages purchased, if any, including— data consistent with that reported under section 4543 of this title ; data elements required to be reported under the Home Mortgage Disclosure Act of 1975 [ 12 U.S.C. 2801 et seq.]; and any other data elements that the Director considers appropriate. The Director shall make available to the public, in a form that is useful to the public (including forms accessible electronically), and to the extent practicable, the data provided to the Director under paragraph (1). Not withstanding subparagraph (A), the Director may not provide public access to, or disclose to the public, any information required to be submitted under this subsection that the Director determines is proprietary or that would provide personally identifiable information and that is not otherwise publicly accessible through other forms, unless the Director determines that it is in the public interest to provide such information.

§ 1430a Omitted

§ 1430b Advances to nonmember mortgagee; terms and conditions

(a) In general Each Federal Home Loan Bank is authorized to make advances to nonmember mortgagees approved under title II of the National Housing Act [ 12 U.S.C. 1707 et seq.]. Such mortgagees must be chartered institutions having succession and subject to the inspection and supervision of some governmental agency, and whose principal activity in the mortgage field must consist of lending their own funds. 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, 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, but no advance may be for an amount in excess of 90 per centum of the unpaid principal of the mortgage loan given as security.

(b) Exception An advance made to a State housing finance agency for the purpose of facilitating mortgage lending that benefits individuals and families that meet the income requirements set forth in section 142(d) or 143(f) of title 26, need not be collateralized by a mortgage insured under title II of the National Housing Act [ 12 U.S.C. 1707 et seq.] or otherwise, if— such advance otherwise meets the requirements of this subsection; and such advance meets the requirements of section 1430(a) of this title , and any real estate collateral for such loan comprises single family or multifamily residential mortgages.

§ 1430c Housing goals

(a) In general The Director shall establish housing goals with respect to the purchase of mortgages, if any, by the Federal Home Loan Banks. Such goals shall be consistent with the goals established under sections 4561 through 4564 of this title.

(b) Considerations In establishing the goals required by subsection (a), the Director shall consider the unique mission and ownership structure of the Federal Home Loan Banks.

(c) Transition period To facilitate an orderly transition, the Director 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 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 shall annually report to Congress on the performance of the Banks 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 shall have power, subject to rules and regulations prescribed by the Director, 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 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 of Finance, as agent for the Banks, may issue consolidated Federal Home Loan Bank debentures which shall be the joint and several obligations of all Federal Home Loan Banks organized and existing under this chapter, in order to provide funds for any such bank or banks, and such debentures shall be issued upon such terms and conditions as such Office may prescribe. No such debentures shall be issued at any time if any of the assets of any Federal Home Loan Bank are pledged to secure any debts or subject to any lien, and neither the Office of Finance nor any Federal Home Loan Bank shall have power to pledge any of the assets of any Federal Home Loan Bank, 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 of all the Federal Home Loan Banks as of the time of the issue of such debentures. It shall be the duty of the Office of Finance not to issue debentures under this section in excess of the notes or obligations of member institutions held and secured under section 1430(a) of this title by all the Federal Home Loan Banks.

(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 of Finance, as agent for the Banks, may issue consolidated Federal Home Loan Bank bonds which shall be the joint and several obligations of all the Federal Home Loan Banks, and shall be secured and be issued upon such terms and conditions as such Office may prescribe.

(d) Additional or substituted collateral on adjustment of equities The Director shall have full power to require any Federal Home Loan Bank to deposit additional collateral or to make substitutions of collateral or to adjust equities between the Federal Home Loan Banks.

(e) Acceptance of deposits; restrictions on transaction of banking business; collection and settlement of checks, drafts, etc.; charges; rules and regulations Each Federal Home Loan Bank shall have power to accept deposits made by members of such bank or by any other Federal Home Loan Bank or other instrumentality of the United States, upon such terms and conditions as the Director may prescribe, but no Federal Home Loan Bank shall transact any banking or other business not incidental to activities authorized by this chapter. The Director may, subject to such rules and regulations, including definitions of terms used in this paragraph, as the Director shall from time to time prescribe, authorize Federal Home Loan Banks to be drawees of, and to engage in, or be agents or intermediaries for, or otherwise participate or assist in, the collection and settlement of (including 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 of any Federal Home Loan Bank or by institutions which are eligible to make application to become members pursuant to section 1424 of this title , and to have such incidental powers as the Director shall find necessary for the exercise of any such authorization. A Federal Home Loan Bank shall make charges, to be determined and regulated by the Director consistent with the principles set forth in section 248a(c) of this title , or utilize the services of, or act as agent for, or be a member of, a Federal Reserve bank, clearinghouse, or any other public or private financial institution or other agency, in the exercise of any powers or functions pursuant to this paragraph. The Director is authorized, with respect to participation in the collection and settlement of any items by Federal Home Loan Banks, and with respect to the collection and settlement (including payment by the payor institution) of items payable by Federal savings and loan associations and Federal mutual savings banks, to prescribe rules and regulations regarding the rights, powers, responsibilities, duties, and liabilities, including standards relating thereto, of such Federal Home Loan Banks, associations, or banks and other parties to any such items or their collection and settlement. In prescribing such rules and regulations, the Director 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 is authorized and empowered to permit or to require Federal Home Loan Banks, upon such terms and conditions as the Director may prescribe, to rediscount the discounted notes of members held by other Federal Home Loan Banks, or to make loans to, or make deposits with, such other Federal Home Loan Banks, or to purchase any bonds or debentures issued under this section.

(g) Reserves Each Federal Home Loan Bank shall at all times have at least an amount equal to the current deposits received from its members invested in (1) obligations of the United States, (2) deposits in banks or trust companies, (3) advances with a maturity of not to exceed five years which are made to members, upon such terms and conditions as the Director may prescribe, and (4) advances with a maturity of not to exceed five years which are made to members whose creditor liabilities (not including advances from the Federal home loan bank) do not exceed 5 per centum of their net assets, and which may be made without the security of home mortgages or other security, upon such terms and conditions as the Director may prescribe.

(h) Investment of surplus funds Such part of the assets of each Federal Home Loan Bank (except reserves and amounts provided for in subsection (g)) as are not required for advances to members, may be invested, to such extent as the bank may deem desirable and subject to such regulations, restrictions, and limitations as may be prescribed by the Director, in obligations of the United States, in obligations, participations, or other instruments of or issued by the Federal National Mortgage Association or the Government National Mortgage Association, in mortgages, obligations, or other securities which are or ever have been sold by the Federal Home Loan Mortgage Corporation pursuant to section 1454 or section 1455 of this title , in the stock of the Federal National Mortgage Association, in stock, obligations, or other securities of any small business investment company formed pursuant to section 681 of title 15 , for the purpose of aiding members of the Federal Home Loan Bank System, and in such securities as fiduciary and trust funds may be invested in under the laws of the State in which the Federal Home Loan Bank 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 of title 31, as now or hereafter in force, and the purposes for which securities may be issued under chapter 31 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 $4, 000, 000, 000. E a c h p u rc ha seo f o b l i g a t i o n s b y t h e S ecre t a ryo f t h e T re a s u ry u n d er t hi ss u b sec t i o n s ha ll b e u p o n t er m s an d co n d i t i o n s a ss ha ll b e d e t er min e d b y t h e S ecre t a ryo f t h e T re a s u ry an d s ha ll b e a rs u c h r a t eo f in t eres t a s ma y b e d e t er min e d b y t h e S ecre t a ryo f t h e T re a s u ry t akin g in t oco n s i d er a t i o n t h ec u rre n t a v er a g e ma r k e t y i e l df or t h e m o n t h p rece d in g t h e m o n t h o f s u c h p u rc ha seo n o u t s t an d in g ma r k e t ab l eo b l i g a t i o n so f t h e U ni t e d St a t es . I na dd i t i o n t oo b l i g a t i o n s a u t h or i ze d t o b e p u rc ha se d b y t h e p rece d in g p a r a g r a p h, t h e S ecre t a ryo f t h e T re a s u ry i s a u t h or i ze d t o p u rc ha se an yo b l i g a t i o n s i ss u e d p u rs u an tt o t hi ssec t i o ninam o u n t s n o tt oe x cee d$ 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 1 certify to the Congress that (1) alternative means cannot be effectively employed to permit members of the Federal Home Loan Bank System to continue to supply reasonable amounts of funds to the mortgage market, and (2) the ability to supply such funds is substantially impaired because of monetary stringency and a high level of interest rates. Any funds borrowed under this subsection shall be repaid by the Home Loan Banks at the earliest practicable date.

(j) Audits Notwithstanding the provisions of section 9105(a)(1)(B) 2 of title 31, audits by the Government Accountability Office of the financial transactions of a Federal Home Loan Bank shall not be limited to periods during which Government capital has been invested therein. The provisions of sections 9107(c)(2) and 9108(d)(1) of title 31 shall not apply to any Federal Home Loan Bank.

(k) Bank loans to the Deposit Insurance Fund Subject to paragraph (3), the Federal Home Loan Banks may, upon the request of the Federal Deposit Insurance Corporation, make loans to such Corporation for the use of the Deposit Insurance Fund. Any loan by a Federal Home Loan Bank pursuant to paragraph (1) shall be a direct liability of the Deposit Insurance Fund. Any loan by a Federal Home Loan Bank pursuant to paragraph (1) shall— bear a rate of interest not less than such Bank’s current marginal cost of funds, taking into account the maturities involved; and be adequately secured.

(l) Temporary authority of Treasury to purchase obligations; conditions In addition to the authority under subsection (i) of this section, the Secretary of the Treasury is authorized to purchase any obligations issued by any Federal Home Loan Bank 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 to issue obligations or securities to the Secretary without mutual agreement between the Secretary and the Federal Home Loan Bank. Nothing in this subsection permits or authorizes the Secretary, without the agreement of the Federal Home Loan Bank, to engage in open market purchases of the common securities of any Federal Home Loan Bank. In connection with any use of this authority, the Secretary must determine that such actions are necessary to— provide stability to the financial markets; prevent disruptions in the availability of mortgage finance; and protect the taxpayer. 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: The need for preferences or priorities regarding payments to the Government. Limits on maturity or disposition of obligations or securities to be purchased. The Federal Home Loan Bank’s plan for the orderly resumption of private market funding or capital market access. The probability of the Federal Home Loan Bank fulfilling the terms of any such obligation or other security, including repayment. The need to maintain the Federal Home Loan Bank’s status as a private shareholder-owned company. Restrictions on the use of Federal Home Loan Bank resources, including limitations on the payment of dividends and executive compensation and any such other terms and conditions as appropriate for those purposes. 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) and with respect to the considerations required under subparagraph (C), and the size, terms, and probability of repayment or fulfillment of other terms of such purchase. The Secretary of the Treasury may, at any time, exercise any rights received in connection with such purchases. 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. The Secretary of the Treasury shall deposit in the General Fund 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— dedicated for the sole purpose of deficit reduction; and prohibited from use as an offset for other spending increases or revenue reductions. 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). 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 of title 31, and the purposes for which securities may be issued under chapter 31 of title 31 are extended to include such purchases and the exercise of any rights in connection with such purchases. Any funds 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. The authority under this subsection ( l ), with the exception of paragraphs (2) and (3) of this subsection, shall expire December 31, 2009 . The Director shall have the power to approve, disapprove, or modify the executive compensation of the Federal Home Loan Bank, as defined under Regulation S-K, 17 C.F.R. 229.

§ 1432 Incorporation of banks; corporate powers; housing project loans

(a) The directors of each Federal Home Loan Bank shall, in accordance with such rules and regulations as the Director may prescribe, make and file with the Director at the earliest practicable date after the establishment of such bank, an organization certificate which shall contain such information as the Director may require. Upon the making and filing of such organization certificate with the Director, such bank 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 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 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 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 of directors of the bank, 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. No officer, employee, attorney, or agent of a Federal home loan bank who receives compensation, may be a member of the board of directors. Each such bank shall have all such incidental powers, not inconsistent with the provisions of this chapter, as are customary and usual in corporations generally.

(b) Subject to such regulations as may be prescribed by the Director, one or more Federal home loan banks may acquire, hold, or dispose of, in whole or in part, or facilitate such acquisition, holding, or disposition by members of any such bank of, housing project loans, or interests therein, having the benefit of any guaranty under section 2181 of title 22 , as now or hereafter in effect, or loans, or interests therein, having the benefit of any guaranty under section 2184 of title 22 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 or 2182 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, and consolidated Federal Home Loan Bank 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, county, municipality, or local taxing authority. The bank, including its franchise, its capital, 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, county, municipality, or local taxing authority; except that in 1 any real property of the bank shall be subject to State, 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, with unearned coupons attached, shall be accepted at par by such bank in payment of or as a credit against the obligation of any home-owner debtor of such bank. ( July 22, 1932, ch. 522, § 13 , 47 Stat. 735 ; May 28, 1935, ch. 150, § 8 , 49 Stat. 295 .)

§ 1434 Depositaries of public money; financial agents

When designated for that purpose by the Secretary of the Treasury, each Federal Home Loan Bank 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. ( July 22, 1932, ch. 522, § 14 , 47 Stat. 736 .)

§ 1435 Obligations as lawful investments; liability of United States for debentures, etc., issued by banks

Obligations of the Federal Home Loan Banks issued with the approval of the Board or the Director under this chapter shall be lawful investments, and may be accepted as security, for all fiduciary, trust, and public funds the investment or deposit of which shall be under the authority or control of the United States or any officer or officers thereof. The Federal reserve banks are authorized to act as depositaries, custodians, and/or fiscal agents for Federal Home Loan Banks in the general performance of their powers under this chapter. All obligations of Federal Home Loan Banks shall plainly state that such obligations are not obligations of the United States and are not guaranteed by the United States. ( July 22, 1932, ch. 522, § 15 , 47 Stat. 736 ; Pub. L. 101–73, title VII, § 701(b)(1) , (3)(A), Aug. 9, 1989 , 103 Stat. 412 ; Pub. L. 110–289, div. A, title II, § 1204(7) , July 30, 2008 , 122 Stat. 2786 .)

§ 1436 Reserves and dividends; emergency suspensions of requirements

(a) Accumulation and maintenance of reserves; payment of dividends Each Federal Home Loan Bank may carry to a reserve account from time-to-time such portion of its net earnings as may be determined by its board of directors. Each Federal Home Loan Bank shall establish such additional reserves and/or make such charge-offs on account of depreciation or impairment of its assets as the Director shall require from time to time. No dividends shall be paid except out of previously retained earnings or current net earnings remaining after reductions for all reserves, chargeoffs, purchases of capital certificates of the Financing Corporation, and payments relating to the Funding Corporation required under this chapter have been provided for, other than chargeoffs or expenses incurred by a Bank in connection with the purchase of capital stock of the Financing Corporation under section 1441 of this title or payments relating to the Funding Corporation Principal Fund under section 1441b(e) of this title . The reserves of each Federal Home Loan Bank shall be invested, subject to such regulations, restrictions, and limitations as may be prescribed by the Director, in direct obligations of the United States, in obligations, participations, or other instruments of or issued by the Federal National Mortgage Association or the Government National Mortgage Association, in mortgages, obligations, or other securities which are or ever have been sold by the Federal Home Loan Mortgage Corporation pursuant to section 1454 or section 1455 of this title , and in such securities as fiduciary and trust funds may be invested in under the laws of the State in which the Federal Home Loan Bank is located.

(b) Assistance to member institutions in event of severe financial conditions Notwithstanding subsection (a) or any other provision of this chapter, if the Director determines that severe financial conditions exist threatening the stability of member institutions, the Director may suspend temporarily the requirements of subsection (a) that a portion of net earnings be set aside semiannually by each Federal Home Loan Bank to a reserve account and permit each Federal Home Loan Bank to declare and pay dividends out of undivided profits.

(c) Exception in case of losses in connection with Financing Corporation stock Notwithstanding subsection (a) of this section, if— a Federal Home Loan Bank incurs a chargeoff or an expense in connection with such bank’s investment in the stock of the Financing Corporation under section 1441 of this title ; the Director determines there is an extraordinary need for the member institutions of the bank to receive dividends; and the bank has reduced all reserves (other than the reserve account required by the first 2 sentences of subsection (a)) to zero, the Director may authorize such bank to declare and pay dividends out of undivided profits (as such term is defined in section 1441(d)(7) of this title ) or the reserve account required by the first 2 sentences of subsection (a). Notwithstanding any payment of dividends by any Federal Home Loan Bank pursuant to an authorization by the Director under paragraph (1), the applicable provisions of section 1441 of this title shall continue to apply with respect to such bank, and to such bank’s investment in the Financing Corporation, 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

“SEC. 401 FSLIC AND FEDERAL HOME LOAN BANK BOARD ABOLISHED.

(“(a) In general.— Effective on the date of the enactment of this Act [ Aug. 9, 1989 ], the Federal Savings and Loan Insurance Corporation established under section 402 of the National Housing Act [former 12 U.S.C. 1725 ] is abolished. Effective at the end of the 60-day period beginning on the date of the enactment of this Act, the Federal Home Loan Bank Board and the position of Chairman of the Federal Home Loan Bank Board are abolished.

(“(b) Disposition of Affairs.— During the 60-day period beginning on the date of the enactment of this Act [ Aug. 9, 1989 ], the Chairman of the Federal Home Loan Bank Board— shall, solely for the purpose of winding up the affairs of the Federal Savings and Loan Insurance Corporation and the Federal Home Loan Bank Board— manage the employees of the Board and provide for the payment of the compensation and benefits of any such employee which accrue before the effective date of the transfer of such employee pursuant to section 403; and manage any property of the Board and the Corporation until such property is transferred pursuant to section 405; and may take any other action necessary for the purpose of winding up the affairs of the Corporation and the Board. Notwithstanding any provision of section 11A of the Federal Deposit Insurance Act [ 12 U.S.C. 1821a ] (as added by section 215 of this Act), funds in the FSLIC Resolution Fund shall be available to the Chairman of the Federal Home Loan Bank Board to pay any expense incurred in carrying out the requirements of paragraph (1). Upon the request of the Chairman of the Federal Home Loan Bank Board, the Federal Deposit Insurance Corporation shall pay to the Chairman from the FSLIC Resolution Fund the amounts requested for expenses described in subparagraph (A). No funds or other property of the Federal Home Loan Bank Board or the Federal Savings and Loan Insurance Corporation (other than the FSLIC Resolution Fund) may be used by the Chairman of the Federal Home Loan Bank Board to pay any expense incurred in carrying out any provision of this title [see Tables for classification]. Disbursements from the FSLIC Resolution Fund pursuant to subparagraph (A) which are attributable to employees described in paragraph (1)(A)(i) and property described in paragraph (1)(A)(ii) shall be reimbursed by the agency to which any such employee or property is transferred.

(“(c) Authority and Status of Chairman of the Federal Home Loan Bank Board.— Notwithstanding the repeal of section 17 of the Federal Home Loan Bank Act [ 12 U.S.C. 1437 ] by section 703 of this Act, the repeal of section 402(c) of the National Housing Act [ 12 U.S.C. 1725(c) ] by section 407 of this title , the abolishment of the Federal Savings and Loan Insurance Corporation under section 401 of this title , the Chairman of the Federal Home Loan Bank Board shall have any authority vested in the Chairman or the Board before such date of enactment [ Aug. 9, 1989 ] which is necessary for the Chairman to carry out the requirements of this section, paragraphs (1) and (2) of section 403(b), and section 405(a) during the 60-day period beginning on such date. For purposes of paragraph (1), the Chairman of the Federal Home Loan Bank Board shall continue to be— treated as an officer of the United States during the 60-day period referred to in such subparagraph; and entitled to compensation at the annual rate of basic pay payable for level III of the Executive Schedule [ 5 U.S.C. 5314 ]. During the 60-day period beginning on the date of the enactment of this Act [ Aug. 9, 1989 ], the Chairman of the Federal Home Loan Bank Board shall not be entitled to any additional compensation by reason of his appointment as Director of the Office of Thrift Supervision.

(“(d) Status of Employees Before Transfer.— Any employee of the Federal Savings and Loan Insurance Corporation shall be treated as an employee of the Federal Home Loan Bank Board for purposes of subsection (b)(1)(A)(i). The repeal of section 17 of the Federal Home Loan Bank Act [ 12 U.S.C. 1437 ] by section 703 of this Act, the repeal of section 402(c) of the National Housing Act [ 12 U.S.C. 1725(c) ] by section 407 of this title , and the abolishment of the Federal Savings and Loan Insurance Corporation under section 401 of this title , shall not be construed as affecting the status of employees of such Corporation or of the Federal Home Loan Bank Board as employees of an agency of the United States for purposes of any other provision of law before the effective date of the transfer of any such employee pursuant to section 403.

(“(e) Continuation of Services.— The Director of the Office of Thrift Supervision, the Chairperson of the Oversight Board of the Resolution Trust Corporation, the Chairperson of the Federal Deposit Insurance Corporation, and the Chairperson of the Federal Housing Finance Board may use the services of employees and other personnel and the property of the Federal Home Loan Bank Board and the Federal Savings and Loan Insurance Corporation, on a reimbursable basis, to perform functions which have been transferred to such agencies for such time as is reasonable to facilitate the orderly transfer of functions transferred pursuant to any other provision of this Act [see Tables for classification] or any amendment made by this Act to any other provision of law. The reimbursement required under paragraph (1) with respect to employees, personnel, and property described in such paragraph shall be made to the FSLIC Resolution Fund and shall be taken into account in determining the amount of any reimbursement required under subsection (b)(2)(D). Any agency, department, or other instrumentality of the United States (including any Federal home loan bank), and any successor to any such agency, department, or instrumentality, which was providing supporting services to the Federal Home Loan Bank Board or the Federal Savings and Loan Insurance Corporation before the enactment of this Act [ Aug. 9, 1989 ] in connection with functions that are transferred to the Office of Thrift Supervision, the Resolution Trust Corporation, the Federal Deposit Insurance Corporation, or the Federal Housing Finance Board shall— continue to provide such services, on a reimbursable basis, until the transfer of such functions is complete; and consult with any such agency to coordinate and facilitate a prompt and reasonable transition.

(“(f) Savings Provisions Relating to FSLIC.— Subsection (a) shall not affect the validity of any right, duty, or obligation of the United States, the Federal Savings and Loan Insurance Corporation, or any other person, which— arises under or pursuant to any section of title IV of the National Housing Act [former 12 U.S.C. 1724 et seq.]; and existed on the day before the date of the enactment of this Act [ Aug. 9, 1989 ]. No action or other proceeding commenced by or against the Federal Savings and Loan Insurance Corporation, or any Federal home loan bank with respect to any function of the Corporation which was delegated to employees of such bank, shall abate by reason of the enactment of this Act [see Tables for classification], except that the appropriate successor to the interests of such Corporation shall be substituted for the Corporation or the Federal home loan bank as a party to any such action or proceeding.

(“(g) Savings Provisions Relating to FHLBB.— Subsection (a) shall not affect the validity of any right, duty, or obligation of the United States, the Federal Home Loan Bank Board, or any other person, which— arises under or pursuant to the Federal Home Loan Bank Act [ 12 U.S.C. 1421 et seq.], the Home Owners’ Loan Act of 1933 [ 12 U.S.C. 1461 et seq.], or any other provision of law applicable with respect to such Board (other than title IV of the National Housing Act [former 12 U.S.C. 1724 et seq.]); and existed on the day before the date of the enactment of this Act [ Aug. 9, 1989 ]. No action or other proceeding commenced by or against the Federal Home Loan Bank Board, or any Federal home loan bank with respect to any function of the Board which was delegated to employees of such bank, shall abate by reason of the enactment of this Act [see Tables for classification], except that the appropriate successor to the interests of such Board shall be substituted for the Board or the Federal home loan bank as a party to any such action or proceeding.

(“(h) Continuation of Orders, Resolutions, Determinations, and Regulations.— Subject to section 402, all orders, resolutions, determinations, and regulations, which— have been issued, made, prescribed, or allowed to become effective by the Federal Savings and Loan Insurance Corporation or the Federal Home Loan Bank Board (including orders, resolutions, determinations, and regulations which relate to the conduct of conservatorships and receiverships), or by a court of competent jurisdiction, in the performance of functions which are transferred by this Act [see Tables for classification]; and are in effect on the date this Act takes effect [ Aug. 9, 1989 ], shall continue in effect according to the terms of such orders, resolutions, determinations, and regulations and shall be enforceable by or against the Director of the Office of Thrift Supervision, the Federal Deposit Insurance Corporation, the Federal Housing Finance Board, or the Resolution Trust Corporation, as the case may be, until modified, terminated, set aside, or superseded in accordance with applicable law by the Director of the Office of Thrift Supervision, the Federal Deposit Insurance Corporation, the Federal Housing Finance Board, or the Resolution Trust Corporation, as the case may be, by any court of competent jurisdiction, or by operation of law.

(“(i) Identification of Regulations Which Remain in Effect Pursuant to This Section.— Before the end of the 60-day period beginning on the date of the enactment of this Act [ Aug. 9, 1989 ], the Director of the Office of Thrift Supervision and the Chairperson of the Federal Deposit Insurance Corporation shall— identify the regulations and orders which relate to the conduct of conservatorships and receiverships in accordance with the allocation of authority between them under this Act [see Tables for classification] and the amendments made by this Act; and promptly publish notice of such identification in the Federal Register.

“SEC. 402 CONTINUATION AND COORDINATION OF CERTAIN REGULATIONS.

(“(a) Regulations Relating to Insurance Functions.— All regulations and orders of the Federal Savings and Loan Insurance Corporation, or the Federal Home Loan Bank Board (in such Board’s capacity as the board of trustees of such Corporation), which are in effect on the date of the enactment of this Act [ Aug. 9, 1989 ] and relate to— the provision, rates, or cancellation of insurance of accounts; or the administration of the insurance fund of the Federal Savings and Loan Insurance Corporation, shall remain in effect according to the terms of such regulations and orders and shall be enforceable by the Federal Deposit Insurance Corporation unless determined otherwise by such Corporation after consultation with the Comptroller of the Currency and, with respect to regulations and orders relating to the scope of deposit insurance coverage, pursuant to subsection (c).

(“[(b) Repealed. Pub. L. 111–203, title III, § 367(5)(B) , July 21, 2010 , 124 Stat. 1556 .]

(“(c) Procedure for Differences in Deposit Insurance Coverage Between FSLIC and FDIC.— Until the effective date of regulations prescribed under paragraph (3)(B), any determination of the amount of any insured deposit in any depository institution which becomes an insured depository institution as a result of the amendment made to section 4(a) of the Federal Deposit Insurance Act [ 12 U.S.C. 1814(a) ] by section 205(1) of this Act shall be made in accordance with the regulations and interpretations of the Federal Savings and Loan Insurance Corporation for determining the amount of an insured account which were in effect on the day before the date of the enactment of this Act [ Aug. 9, 1989 ]. During the period beginning on the date of the enactment of this Act and ending on the effective date of regulations prescribed under paragraph (3)(B), the amount of any insured account which is required to be treated as an insured deposit pursuant to paragraph (1) shall not exceed the amount of insurance to which such insured account would otherwise have been entitled pursuant to the regulations and interpretations of the Federal Savings and Loan Insurance Corporation which were in effect on the day before the date of the enactment of this Act. The Federal Deposit Insurance Corporation shall— review its regulations, principles, and interpretations for deposit insurance coverage and those established by the Federal Savings and Loan Insurance Corporation; and on or before the end of the 270-day period beginning on the date of the enactment of this Act, prescribe a uniform set of regulations which shall be applicable to all insured deposits in insured depository institutions (except to the extent any provision of this Act, any amendment made by this Act to the Federal Deposit Insurance Act [ 12 U.S.C. 1811 et seq.], or any other provision of law requires or explicitly permits the Federal Deposit Insurance Corporation to treat insured deposits of Savings Association Insurance Fund members differently than insured deposits of Bank Insurance Fund members). In prescribing regulations providing for the uniform treatment of deposit insurance coverage, the Federal Deposit Insurance Corporation shall consider all relevant factors necessary to promote safety and soundness, depositor confidence, and the stability of deposits in insured depository institutions. Regulations prescribed under this subsection shall— provide for effective notice to depositors in insured depository institutions of any change in deposit insurance coverage which would result under such regulations; and take effect on or before the end of the 90-day period beginning on the date such regulations become final. For purposes of this subsection— The term ‘insured account’ has the meaning given to such term in section 401(c) of the National Housing Act [former 42 U.S.C. 1724(c) ] (as in effect before the date of the enactment of this Act [ Aug. 9, 1989 ]). The term ‘insured depository institution’ has the meaning given to such term in section 3(c)(2) of the Federal Deposit Insurance Act [ 12 U.S.C. 1813(c)(2) ].

(“(d) Interim Treatment of Custodial Accounts.— Subject to paragraph (2) and notwithstanding subsection (a) or any limitation contained in the Federal Deposit Insurance Act [ 12 U.S.C. 1811 et seq.] relating to the amount of deposit insurance available to any 1 borrower, amounts held in custodial accounts in insured depository institutions (as defined in section 3(c)(2) of such Act [ 12 U.S.C. 1813(c)(2) ]) for the payment of principal, interest, tax, and insurance payments for mortgage borrowers, shall be insured under the Federal Deposit Insurance Act in the amount of $100,000 per mortgage borrower. After the effective date of the regulations prescribed under subsection (c)— the amount of deposit insurance available for custodial accounts shall be determined in accordance with such regulations; and paragraph (1) shall cease to apply with respect to such accounts.

(“(e) Treatment of References in Adjustable Rate Mortgage Instruments.— For purposes of adjustable rate mortgage instruments that are in effect as of the date of enactment of this Act [ Aug. 9, 1989 ], any reference in the instrument to the Federal Savings and Loan Insurance Corporation, the Federal Home Loan Bank Board, or institutions insured by the Federal Savings and Loan Insurance Corporation before such date shall be treated as a reference to the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, the Comptroller of the Currency, or institutions which are members of the Savings Association Insurance Fund, as appropriate on the basis of the transfer of functions pursuant to this Act [see Tables for classification], unless the context of the reference requires otherwise. If any index used to calculate the applicable interest rate on any adjustable rate mortgage instrument is no longer calculated and made available as a direct or indirect result of the enactment of this Act, any index— made available by the Comptroller of the Currency, the Chairperson of the Federal Deposit Insurance Corporation, or the Chairperson of the Federal Housing Finance Agency pursuant to paragraph (3); or determined by the Comptroller of the Currency, the Chairperson of the Federal Deposit Insurance Corporation, or the Chairperson of the Federal Housing Finance Agency, pursuant to paragraph (4), to be substantially similar to the index which is no longer calculated or made available, may be substituted by the holder of any such adjustable rate mortgage instrument upon notice to the borrower. Promptly after the enactment of this subsection [ Aug. 9, 1989 ], the Comptroller of the Currency, the Chairperson of the Federal Deposit Insurance Corporation, and the Chairperson of the Federal Housing Finance Agency shall take such action as may be necessary to assure that the indexes prepared by the Federal Savings and Loan Insurance Corporation, the Federal Home Loan Bank Board, and the Federal home loan banks immediately prior to the enactment of this subsection and used to calculate the interest rate on adjustable rate mortgage instruments continue to be available. If any agency can no longer make available an index pursuant to paragraph (3), an index that is substantially similar to such index may be substituted for such index for purposes of paragraph (2) if the Comptroller of the Currency, the Chairperson of the Federal Deposit Insurance Corporation, or the Chairperson of the Federal Housing Finance Agency, as the case may be, determines, after notice and opportunity for comment, that— the new index is based upon data substantially similar to that of the original index; and the substitution of the new index will result in an interest rate substantially similar to the rate in effect at the time the original index became unavailable.

“SEC. 403 DETERMINATION OF TRANSFERRED FUNCTIONS AND EMPLOYEES.

(“(a) All FHLBB and FSLIC Employees Shall Be Transferred.— All employees of the Federal Home Loan Bank Board and the Federal Savings and Loan Insurance Corporation shall be identified for transfer under subsection (b) to the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, or the Federal Housing Finance Board.

(“(b) Functions and Employees Transferred.— The Director of the Office of Thrift Supervision, the Chairperson of the Oversight Board of the Resolution Trust Corporation, the Chairperson of the Federal Deposit Insurance Corporation, the Chairperson of the Federal Housing Finance Board, and the Chairman of the Federal Home Loan Bank Board (as of the day before the date of the enactment of this Act [ Aug. 9, 1989 ]) shall jointly determine the functions or activities of the Federal Home Loan Bank Board and the Federal Savings and Loan Insurance Corporation, and the number of employees of such Board and Corporation necessary to perform or support such functions or activities, which are transferred from the Federal Home Loan Bank Board and the Federal Savings and Loan Insurance Corporation to the Office of Thrift Supervision, the Resolution Trust Corporation, the Federal Deposit Insurance Corporation, or the Federal Housing Finance Board, as the case may be. The Director of the Office of Thrift Supervision, the Chairperson of the Oversight Board of the Resolution Trust Corporation, the Chairperson of the Federal Deposit Insurance Corporation, and the Chairperson of the Federal Housing Finance Board shall allocate the employees of the Federal Home Loan Bank Board and the Federal Savings and Loan Insurance Corporation consistent with the number determined pursuant to paragraph (1) in a manner which such Director, Chairman, and Chairpersons, in their sole discretion, deem equitable, except that, within work units, the agency preferences of individual employees shall be accommodated as far as possible.

(“(c) Federal Home Loan Bank Personnel.— Employees of the Federal home loan banks or the joint offices of such banks who, on the day before the date of the enactment of this Act [ Aug. 9, 1989 ], are performing functions or activities on behalf of the Federal Home Loan Bank Board or the Federal Savings and Loan Insurance Corporation shall be treated as employees of the Federal Home Loan Bank Board or the Federal Savings and Loan Insurance Corporation for purposes of determining, pursuant to subsection (b)(1), the number of employees performing or supporting functions or activities of such Board or Corporation to the extent such functions or activities are transferred to the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, the Resolution Trust Corporation, or the Federal Housing Finance Board.

(“(d) FSLIC Employees Engaged in Conservatorship or Receivership Functions.— Individuals who, on the day before the date of the enactment of this Act [ Aug. 9, 1989 ], are employed by the Federal Savings and Loan Insurance Corporation in such Corporation’s capacity as conservator or receiver of any insured depository institution shall be treated as employees of the Federal Savings and Loan Insurance Corporation for purposes of determining, pursuant to subsection (b)(1), the number of employees performing or supporting functions or activities of such Corporation if such conservatorship or receivership is transferred to the Federal Deposit Insurance Corporation or the Resolution Trust Corporation.

“SEC. 404 RIGHTS OF EMPLOYEES OF ABOLISHED AGENCIES.

“All employees identified for transfer under subsection (b) of section 403 (other than individuals described in subsection (c) or (d) of such section) shall be entitled to the following rights: Each employee so identified shall be transferred to the appropriate agency or entity for employment no later than 60 days after the date of the enactment of this Act [ Aug. 9, 1989 ] and such transfer shall be deemed a transfer of function for the purpose of section 3503 of title 5 , United States Code. Each transferred employee shall be guaranteed a position with the same status, tenure, grade, and pay as that held on the day immediately preceding the transfer. Each such employee holding a permanent position shall not be involuntarily separated or reduced in grade or compensation for 1 year after the date of transfer, except for cause or, if the employee is a temporary employee, separated in accordance with the terms of the appointment. In the case of employees occupying positions in the excepted service or the Senior Executive Service, any appointment authority established pursuant to law or regulations of the Office of Personnel Management for filling such positions shall be transferred, subject to subparagraph (B). An agency or entity may decline a transfer of authority under subparagraph (A) (and the employees appointed pursuant thereto) to the extent that such authority relates to positions excepted from the competitive service because of their confidential, policy-making, policy-determining, or policy-advocating character, and noncareer positions in the Senior Executive Service (within the meaning of section 3132(a)(7) of title 5 , United States Code). If any agency or entity to which employees are transferred determines, after the end of the 1-year period beginning on the date the transfer of functions to such agency or entity is completed, that a reorganization of the combined work force is required, that reorganization shall be deemed a ‘major reorganization’ for purposes of affording affected employees retirement under section 8336(d)(2) or 8414(b)(1)(B) of title 5, United States Code. Any employee accepting employment with any agency or entity (other than the Office of Thrift Supervision) as a result of such transfer may retain for 1 year after the date such transfer occurs membership in any employee benefit program of the Federal Home Loan Bank Board, including insurance, to which such employee belongs on the date of the enactment of this Act [ Aug. 9, 1989 ] if— the employee does not elect to give up the benefit or membership in the program; and the benefit or program is continued by the Director of the Office of Thrift Supervision. The difference in the costs between the benefits which would have been provided by such agency or entity and those provided by this section shall be paid by the Director of the Office of Thrift Supervision. If any employee elects to give up membership in a health insurance program or the health insurance program is not continued by the Director of the Office of Thrift Supervision, the employee shall be permitted to select an alternate Federal health insurance program within 30 days of such election or notice, without regard to any other regularly scheduled open season. Any employee employed by the Office of Thrift Supervision as a result of the transfer may retain membership in any employee benefit program of the Federal Home Loan Bank Board, including insurance, which such employee has on the date of enactment of this Act, if such employee does not elect to give up such membership and the benefit or program is continued by the Director of the Office of Thrift Supervision. If any employee elects to give up membership in a health insurance program or the health insurance program is not continued by the Director of the Office of Thrift Supervision, such employee shall be permitted to select an alternate Federal health insurance program within 30 days of such election or discontinuance, without regard to any other regularly scheduled open season. A transferring employee in the Senior Executive Service shall be placed in a comparable position at the agency or entity to which such employee is transferred. Transferring employees shall receive notice of their position assignments not later than 120 days after the effective date of their transfer. Upon the termination of the Resolution Trust Corporation pursuant to section 21A(m)[( o )] of the Federal Home Loan Bank Act [former 12 U.S.C. 1441a ( o )], any employee of the Federal Deposit Insurance Corporation assigned to the Resolution Trust Corporation shall be reassigned to a position within the Federal Deposit Insurance Corporation in accordance with the provisions of paragraphs (2) and (4) through (7) of this section, except that the liability for any difference in the costs of benefits described in paragraph (5) shall be a liability of the Resolution Trust Corporation and not the Office of Thrift Supervision.

“SEC. 405 DIVISION OF PROPERTY AND FACILITIES.

“Before the end of the 60-day period beginning on the date of the enactment of this Act [ Aug. 9, 1989 ], the Director of the Office of Thrift Supervision, the Chairperson of the Oversight Board of the Resolution Trust Corporation, the Chairperson of the Federal Deposit Insurance Corporation, and the Chairperson of the Federal Housing Finance Board shall jointly divide all property of the Federal Savings and Loan Insurance Corporation and the Federal Home Loan Bank Board used to perform functions and activities of the Federal Home Loan Bank Board among the Office of Thrift Supervision, the Resolution Trust Corporation, the Federal Deposit Insurance Corporation, and the Federal Housing Finance Board in accordance with the division of responsibilities, functions, and activities effected by this Act [see Tables for classification]. Any disagreement between them in so doing shall be resolved by the Director of the Office of Management and Budget.

“SEC. 406 REPORT.

“Before the end of the 60-day period beginning on the date of the enactment of this Act [ Aug. 9, 1989 ], the Chairman of the Federal Home Loan Bank Board shall provide by written report to the Secretary of the Treasury, the Director of the Office of Management and Budget, and the Congress, a final accounting of the finances and operations of the Federal Savings and Loan Insurance Corporation.”

§ 1438 Omitted

§ 1438a Nonadministrative expenses; expenses of studies and investigations

On and after July 12, 1960 , expenses of the Board 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 services authorized by section 3109 of title 5 , shall be considered as nonadministrative expenses. ( Pub. L. 86–626, title II, § 201 , July 12, 1960 , 74 Stat. 441 .)

§§ 1439, 1439–1 Repealed. Pub. L. 101–73, title VII, §§ 708, 712, Aug. 9, 1989, 103 Stat. 418, 419

§ 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 heretofore deposited in the Treasury of the United States under the last sentence of section 1439 1 of this title (including unexpended balances of moneys appropriated therefrom for administrative expenses), and hereafter all moneys and funds which would, except for this provision, be so depositable thereunder, shall be deposited with the Treasurer of the United States in a special deposit account and shall be available, retroactively as well as prospectively, for expenditure for all purposes of the Federal Home Loan Bank Board and the Federal Home Loan Bank Administration, subject to subsections (a) and (b) of section 712a of title 15 . ( June 26, 1943, ch. 145 , title I, § 101, 57 Stat. 186 ; 1947 Reorg. Plan No. 3, eff. July 27, 1947 , 12 F.R. 4981, 61 Stat. 954 ; Aug. 11, 1955, ch. 783 , title I, § 109(a)(3), 69 Stat. 640 .)

§ 1440 Examinations and audits

The Director shall from time to time, at least annually, require examinations and reports of condition of all Federal Home Loan Banks in such form as the Director shall prescribe and shall furnish periodically statements based upon the reports of the banks to the Director. For the purposes of this chapter, examiners appointed by the Director 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 et seq.] and the Federal Reserve Act [ 12 U.S.C. 221 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 and the Banks, to determine the extent to which the Director and the Banks are fairly and effectively fulfilling the purposes of this chapter. ( July 22, 1932, ch. 522, § 20 , 47 Stat. 738 ; June 27, 1950, ch. 369, § 10 , 64 Stat. 259 ; Aug. 2, 1954, ch. 649 , title VIII, § 802(f), 68 Stat. 643 ; Pub. L. 101–73, title VII , §§ 701(b)(1), (3)(A), 702(b), Aug. 9, 1989 , 103 Stat. 412 , 415; Pub. L. 110–289, div. A, title II, § 1204(8) , (9), July 30, 2008 , 122 Stat. 2786 .)

(a) Information on financial condition In order to enable each Federal Home Loan Bank to evaluate the financial condition of one or more of the other Federal Home Loan Banks individually and the Federal Home Loan Bank System (including any risks associated with the issuance or repayment of consolidated Federal Home Loan Bank bonds and debentures or other borrowings and the joint and several liabilities of the Banks 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 et seq.), the Director shall make available to the Banks such reports, records, or other information as may be available, relating to the condition of any Federal Home Loan Bank.

(b) Sharing of information The Director shall promulgate regulations to facilitate the sharing of information made available under subsection (a) directly among the Federal Home Loan Banks. Notwithstanding paragraph (1), a Federal Home Loan Bank responding to a request from another Bank or from the Director for information pursuant to this section may request that the Director 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 under the Securities Exchange Act of 1934 ( 15 U.S.C. 78a et seq.) or the regulations issued by the Securities and Exchange Commission thereunder.

(d) No waiver of privilege The Director shall not be deemed to have waived any privilege applicable to any information concerning a Federal Home Loan Bank by transferring, or permitting the transfer of, that information to any other Federal Home Loan Bank for the purposes set out in subsection (a).

§ 1441 Financing Corporation

(a) Establishment Notwithstanding any other provision of law, the Director shall charter a corporation to be known as the Financing Corporation.

(b) Management of Financing Corporation The Financing Corporation shall be under the management of a directorate composed of 3 members as follows: The Director of the Office of Finance of the Federal Home Loan Banks (or the head of any successor to such office). 2 members selected by the Director from among the presidents of the Federal Home Loan Banks. Each member appointed under paragraph (1)(B) shall be appointed for a term of 1 year. If any member leaves the office in which such member was serving when appointed to the Directorate— such member’s service on the Directorate shall terminate on the date such member leaves such office; and the successor to the office of such member shall serve the remainder of such member’s term. No president of a Federal Home Loan Bank 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 have served as many terms on the Directorate as the president of such bank (before the appointment of such president to such additional term). The Director shall select the chairperson of the Directorate from among the 3 members of the Directorate. The Financing Corporation shall have no paid employees. The Directorate may, with the approval of the Director, authorize the officers, employees, or agents of the Federal Home Loan Banks to act for and on behalf of the Financing Corporation in such manner as may be necessary to carry out the functions of the Financing Corporation. All administrative expenses of the Financing Corporation shall be paid by the Federal Home Loan Banks. The amount each Federal Home Loan Bank shall pay shall be determined by the Director by multiplying the total administrative expenses for any period by the percentage arrived at by dividing— the aggregate amount the Director required such bank to invest in the Financing Corporation (as of the time of such determination) under paragraphs (4) and (5) of subsection (d) (as computed without regard to paragraph (3) or (6) of such subsection); by the aggregate amount the Director required all Federal Home Loan Banks to invest (as of the time of such determination) under such paragraphs. For purposes of this paragraph, the term “administrative expenses” does not include— issuance costs (as such term is defined in subsection (g)(5)(A)); any interest on (and any redemption premium with respect to) any obligation of the Financing Corporation; or custodian fees (as such term is defined in subsection (g)(5)(B)). The Directorate shall be subject to such regulations, orders, and directions as the Director may prescribe. Members of the Directorate shall receive no pay, allowances, or benefits from the Financing Corporation by reason of their service on the Directorate.

(c) Powers of Financing Corporation The Financing Corporation shall have only the following powers, subject to the other provisions of this section and such regulations, orders, and directions as the Director may prescribe: To issue nonvoting capital stock to the Federal Home Loan Banks. To invest in any security issued by the Federal Savings and Loan Insurance Corporation under section 1725(b) of this title prior to August 9, 1989 , and thereafter to transfer the proceeds of any obligation issued by the Financing Corporation to the FSLIC Resolution Fund. 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. To impose assessments in accordance with subsection (f). To adopt, alter, and use a corporate seal. To have succession until dissolved. To enter into contracts. To sue and be sued in its corporate capacity, and to complain and defend in any action brought by or against the Financing Corporation in any State or Federal court of competent jurisdiction. 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 Each Federal Home Loan Bank shall invest in nonvoting capital stock of the Financing Corporation at such times and in such amounts as the Director may prescribe under this subsection. Each share of stock issued by the Financing Corporation to a Federal Home Loan Bank shall have par value in an amount determined by the Director and shall be transferable only among the Federal Home Loan Banks in the manner and to the extent prescribed by the Director at not less than par value. The aggregate amount of funds invested by all Federal Home Loan Banks in nonvoting capital stock of the Financing Corporation shall not exceed $3, 000, 000, 000. T h ec u m u l a t i v e am o u n t o ff u n d s in v es t e d inn o n v o t in g c a p i t a l s t oc k o f t h e F inan c in g C or p or a t i o nb ye a c h F e d er a l Ho m e L o an B ank s ha ll n o t e x cee d t h e a gg re g a t e am o u n t o f — t h es u m o f — t h ereser v es main t ain e d b ys u c hbank o n Dece mb er 31, 1985, p u rs u an tt o t h ere q u i re m e n t co n t ain e d in t h e f i rs t 2 se n t e n ceso f sec t i o n 1436 o f t hi s t i tl e; an d t h e u n d i v i d e d p ro f i t s (a s d e f in e d in p a r a g r a p h (7)) o f s u c hbank o n s u c h d a t e; an d t h es u m o f — t h e am o u n t s a dd e d t oreser v es a f t erDece mb er 31, 1985, p u rs u an tt o t h ere q u i re m e n t co n t ain e d in t h e f i rs t 2 se n t e n ceso f sec t i o n 1436 o f t hi s t i tl e; an d t h e u n d i v i d e d p ro f i t so f s u c hbanka ccr u in g a f t ers u c h d a t e . O f t h e f i rs t$ 1,000,000,000 in the aggregate which the Thrift Depositor Protection Oversight Board pursuant to section 1441b of this title or the Director under this section (as the case may be) may require the Federal Home Loan Banks collectively to invest in the stock of the Funding Corporation or invest in the capital stock of the Financing Corporation, respectively, the amount which each Federal Home Loan Bank (or any successor to such Bank) shall invest shall be determined by the Thrift Depositor Protection Oversight Board or the Director (as the case may be) by multiplying the aggregate amount of such payment or investment by all Banks by the percentage appearing in the following table for each such Bank: Bank Percentage Federal Home Loan Bank of Boston 1.8629 Federal Home Loan Bank of New York 9.1006 Federal Home Loan Bank of Pittsburgh 4.2702 Federal Home Loan Bank of Atlanta 14.4007 Federal Home Loan Bank of Cincinnati 8.2653 Federal Home Loan Bank of Indianapolis 5.2863 Federal Home Loan Bank of Chicago 9.6886 Federal Home Loan Bank of Des Moines 6.9301 Federal Home Loan Bank of Dallas 8.8181 Federal Home Loan Bank of Topeka 5.2706 Federal Home Loan Bank of San Francisco 19.9644 Federal Home Loan Bank of Seattle 6.1422 With respect to any amount in excess of the 3.2 million Federal Home Loan Bank of New York 7.7 million Federal Home Loan Bank of Pittsburgh 5.2 million Federal Home Loan Bank of Atlanta 12.3 million Federal Home Loan Bank of Cincinnati 5.9 million Federal Home Loan Bank of Indianapolis 37.4 million Federal Home Loan Bank of Chicago 6.0 million Federal Home Loan Bank of Des Moines 32.7 million Federal Home Loan Bank of Dallas 45.0 million Federal Home Loan Bank of Topeka 13.7 million Federal Home Loan Bank of San Francisco 21.9 million Federal Home Loan Bank of Seattle 33.6 million

(e) Obligations of Financing Corporation The aggregate amount of obligations of the Financing Corporation which may be outstanding at any time (as determined by the Director) shall not exceed the lesser of— an amount equal to the greater of— 5 times the amount of the nonvoting capital stock of the Financing Corporation which is outstanding at such time; or the sum of the face amounts (the amount of principal payable at maturity) of securities described in subsection (g)(2) which are held at such time in the segregated account established pursuant to such subsection; or $10,825,000,000. No obligation of the Financing Corporation shall be issued after December 12, 1991 . No obligation of the Financing Corporation may be issued which matures— more than 30 years after the date of issue; or after December 31, 2026 . Obligations issued under this section by the Financing Corporation with the approval of the Director shall be lawful investments, and may be accepted as security, for all fiduciary, trust, and public funds the investment or deposit of which shall be under the authority or control of the United States or any officer of the United States. All persons 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 shall also have the power to do so with respect to obligations of the Financing Corporation. Obligations of the Financing Corporation 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, the United States, or the FSLIC Resolution Fund and the obligations shall so plainly state. Except as provided in subparagraph (B), obligations of the Financing 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 is exempt from tax under section 1433 of this title . The Financing Corporation, like the Federal Home Loan Banks, shall be treated as an agency of the United States for purposes of the first sentence of section 3124(b) of title 31 (relating to determination of tax status of interest on obligations). Notwithstanding paragraph (7), 1 obligations of the Financing Corporation 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. The Chairperson of the Director 2 and the Directorate shall ensure that minority owned or controlled commercial banks, investment banking firms, underwriters, and bond counsels throughout the United States have an opportunity to participate 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 shall obtain funds for anticipated interest payments, issuance costs, and custodial fees on obligations issued hereunder from the following sources: The Financing Corporation assessments which were assessed on insured institutions pursuant to this section as in effect prior to August 9, 1989 . In addition to the amounts obtained pursuant to paragraph (1), the Financing Corporation, with the approval of the Board 3 of Directors of the Federal Deposit Insurance Corporation, shall assess against each insured depository institution an assessment (in the same manner as assessments are assessed against such institutions by the Federal Deposit Insurance Corporation under section 1817 of this title ). To the extent the amounts available pursuant to paragraphs (1) and (2) are insufficient to cover the amount of interest payments, issuance costs, and custodial fees, and if the funds are not required by the Resolution Funding Corporation to provide funds for the Funding Corporation Principal Fund under section 1441b of this title , the Federal Deposit Insurance Corporation shall transfer to the Financing Corporation, from the liquidating dividends and payments made on claims received by the FSLIC Resolution Fund (established under section 1821a of this title ) from receiverships, the remaining amount of funds necessary for the Financing Corporation to make interest payments.

(g) Use and disposition of assets of Financing Corporation not invested in FSLIC Subject to such regulations, restrictions, and limitations as may be prescribed by the Director, assets of the Financing Corporation, which are not invested in capital certificates or capital stock issued by the Federal Savings and Loan Insurance Corporation under section 1725(b)(1)(A) of this title before August 9, 1989 , and after August 9, 1989 , in capital certificates issued by the FSLIC Resolution Fund, shall be invested in— direct obligations of the United States; obligations, participations, or other instruments of, or issued by, the Federal National Mortgage Association or the Government National Mortgage Association; mortgages, obligations, or other securities for sale by, or which have been disposed of by, the Federal Home Loan Mortgage Corporation under section 1454 or 1455 of this title; or any other security in which it is lawful for fiduciary and trust funds to be invested under the laws of any State. The Financing Corporation shall invest in, and hold in a segregated account, noninterest bearing instruments— which are securities described in paragraph (1); and 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, to assure the repayment of principal on obligations of the Financing Corporation. For purposes of the foregoing, the Financing Corporation 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. The aggregate amount invested by the Financing Corporation under paragraph (2) shall not exceed $2,200,000,000 (as determined on the basis of the purchase price). Notwithstanding the requirements of paragraph (1), the assets of the Financing Corporation referred to in paragraph (1) which are not invested under paragraph (2) may be used to pay— issuance costs; any interest on (and any redemption premium with respect to) any obligation of the Financing Corporation; and custodian fees. For purposes of this subsection— The term “issuance costs”— means issuance fees and commissions incurred by the Financing Corporation in connection with the issuance or servicing of any obligation of the Financing Corporation; and includes 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 in connection with issuing any obligation. The term “custodian fee” means— any fee incurred by the Financing Corporation in connection with the transfer of any security to, or the maintenance of any security in, the segregated account established under paragraph (2); and any other expense incurred by the Financing Corporation in connection with the establishment or maintenance of such account.

(h) Miscellaneous provisions relating to Financing Corporation Except as provided in subsection (e)(8)(B), the Financing Corporation shall be treated as a Federal Home Loan Bank for purposes of sections 1433 and 1443 of this title. The Federal Reserve banks are authorized to act as depositaries for or fiscal agents or custodians of the Financing Corporation. Notwithstanding the fact that no Government funds may be invested in the Financing Corporation, the Financing Corporation shall be treated, for purposes of sections 9105, 4 9107, and 9108 of title 31, as a mixed-ownership Government corporation which has capital of the Government.

(i) Termination of Financing Corporation The Financing Corporation shall be dissolved, as soon as practicable, after the earlier of— the maturity and full payment of all obligations issued by the Financing Corporation pursuant to this section; or December 31, 2026 . Effective on the date of the dissolution of the Financing Corporation under paragraph (1), the Director may exercise, on behalf of the Financing Corporation, any power of the Financing Corporation which the Director determines to be necessary to settle and conclude the affairs of the Financing Corporation.

(j) Regulations The Director may prescribe such regulations as may be necessary to carry out the provisions of this section, including regulations defining terms used in this section.

(k) Definitions For purposes of this section, the following definitions shall apply: The term “Directorate” means the directorate established in the manner provided in subsection (b)(1) to manage the Financing Corporation. The term “net earnings” means net earnings without reduction for any chargeoffs or expenses incurred by a Bank in connection with the purchase of capital stock of the Financing Corporation or the purchase of stock of the Funding Corporation required by the Thrift Depositor Protection Oversight Board under subsections (e) and (f) of section 1441b of this title . The term “insured depository institution” has the same meaning as in section 1813 of this title 5

§ 1441a Repealed. Pub. L. 111–203, title III, § 364(b), July 21, 2010, 124 Stat. 1555

§ 1441a–1 Definitions

For purposes of section 1441a–2 of this title : The term “State housing finance authority” means any public agency, authority, or corporation which— serves as an instrumentality of any State or any political subdivision of any State; and functions as a source of residential mortgage loan financing in that State. The term “nonprofit entity” means any not-for-profit corporation chartered under State law that is exempt from Federal taxation under section 501(c) of title 26 and no part of the net earnings of which inures to the benefit of any member, founder, contributor, or individual (including any nonprofit entity established by the corporation established under title IX of the Housing and Urban Development Act of 1968 [ 42 U.S.C. 3931 et seq.]). The term “mortgage-related assets” means— residential mortgage loans secured by 1- to 4-family or multifamily dwellings; and real property improved with 1- to 4-family or multifamily residential dwellings, which are located within the jurisdiction of the applicable State housing finance authority or within the geographical area served by the nonprofit entity. The term “net income” means income after deduction of all associated expenses calculated in accordance with generally accepted accounting principles. ( Pub. L. 101–73, title XIII, § 1301 , Aug. 9, 1989 , 103 Stat. 547 .)

(a) Authorization Notwithstanding any other provision of Federal or State law, a State housing finance authority or nonprofit entity may purchase mortgage-related assets from the Resolution Trust Corporation or from financial institutions with respect to which the Federal Deposit Insurance Corporation is acting as a conservator or receiver (including 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 or nonprofit entity which purchases mortgage-related assets pursuant to subsection (a) shall invest any net income 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 or within the geographical area served by the nonprofit entity.

§ 1441a–3 RTC and FDIC properties

(a) Reports The Resolution Trust Corporation and the Federal Deposit Insurance Corporation shall each submit to the Congress for each year a report identifying and describing any property that is covered property of the corporation concerned as of September 30 of such year. The report shall be submitted on or before March 30 of the following year. In preparing the reports required under this subsection, each corporation concerned may consult with the Secretary of the Interior for purposes of identifying the properties described in paragraph (1).

(b) Limitation on transfer The Resolution Trust Corporation and the Federal Deposit Insurance Corporation may not sell or otherwise transfer any covered property unless the corporation concerned 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. During the 90-day period beginning on the date that notice under paragraph (1) concerning a covered property is first published, any governmental agency or qualified organization may submit to the corporation concerned a written notice of serious interest for the purchase or other transfer of a particular covered property for which notice has been published. The notice of serious interest shall be in such form and include such information as the corporation concerned may prescribe. During the period under paragraph (2), a corporation concerned may not sell or otherwise transfer any covered property for which notice has been published under paragraph (1). Upon the expiration of such period, the corporation concerned may sell or otherwise transfer any covered property for which notice under paragraph (1) has been published if a notice of serious interest under paragraph (2) concerning the property has not been timely submitted. If a notice of serious interest in a covered property is timely submitted pursuant to paragraph (2), the corporation concerned may not sell or otherwise transfer such covered property during the 90-day period beginning upon the expiration of the period under paragraph (2) except to a governmental agency 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) have been withdrawn.

(c) Definitions For purposes of this section: The term “corporation concerned” means— the Federal Deposit Insurance Corporation, with respect to matters relating to the Federal Deposit Insurance Corporation; and the Resolution Trust Corporation, with respect to matters relating to the Resolution Trust Corporation. The term “covered property” means any property— to which— the Resolution Trust Corporation has acquired title in its corporate or receivership capacity; or the Federal Deposit Insurance Corporation has acquired title in its corporate capacity or which was acquired by the former Federal Savings and Loan Insurance Corporation in its corporate capacity; and that— is located within the John H. Chafee Coastal Barrier Resources System; or is undeveloped, greater than 50 acres in size, and adjacent to or contiguous with any lands managed by a governmental agency primarily for wildlife refuge, sanctuary, open space, recreational, historical, cultural, or natural resource conservation purposes. The term “governmental agency” means any agency or entity of the Federal Government or a State or local government. The term “undeveloped” means— containing few manmade structures and having geomorphic and ecological processes that are not significantly impeded by any such structures or human activity; and 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 to the Resolution Trust Corporation to enable the Resolution Trust Corporation to carry out the provisions of this chapter.

(b) Establishment There is established a corporation to be known as the Resolution Funding Corporation.

(c) Management of Funding Corporation The Funding Corporation shall be under the management of a Directorate composed of 3 members as follows: The director of the Office of Finance of the Federal Home Loan Banks (or the head of any successor office). 2 members selected by the Thrift Depositor Protection Oversight Board from among the presidents of the Federal Home Loan Banks. Of the 2 members appointed under paragraph (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 shall be appointed for a term of 3 years. If any member leaves the office in which such member was serving when appointed to the Directorate— such member’s service on the Directorate shall terminate on the date such member leaves such office; and the successor to the office of such member shall serve the remainder of such member’s term. No president of a Federal Home Loan Bank 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 have served as many terms as the president of such bank. The Thrift Depositor Protection Oversight Board shall select the chairperson of the Directorate from among the 3 members of the Directorate. The Funding Corporation shall have no paid employees. The Directorate may, with the approval of the Director authorize the officers, employees, or agents of the Federal Home Loan Banks 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. All administrative expenses of the Funding Corporation, including custodian fees, shall be paid by the Federal Home Loan Banks. The amount each Federal Home Loan Bank shall pay under subparagraph (A) shall be determined by the Thrift Depositor Protection Oversight Board by multiplying the total administrative expenses for any period by the percentage arrived at by dividing— the aggregate amount the Thrift Depositor Protection Oversight Board required such bank to invest in the Funding Corporation (as of the time of such determination) under paragraphs (4) and (5) of subsection (e) (computed without regard to paragraphs (3) or (6) of such subsection); by the aggregate amount the Thrift Depositor Protection Oversight Board required all Federal Home Loan Banks to invest (as of the time of such determination) under such paragraphs. The Directorate of the Funding Corporation shall be subject to such regulations, orders, and directions as the Thrift Depositor Protection Oversight Board may prescribe. Members 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), subject to the other provisions of this section and such regulations, orders, and directions as the Thrift Depositor Protection Oversight Board may prescribe: To issue nonvoting capital stock to the Federal Home Loan Banks. To purchase capital certificates issued by the Resolution Trust Corporation under section 1441a of this title , and to transfer amounts to the Resolution Trust Corporation pursuant to subsection (e)(8) of this section. 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. To impose assessments in accordance with subsection (e)(7). To adopt, alter, and use a corporate seal. To have succession until dissolved. To enter into contracts. 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 or Federal court of competent jurisdiction. To exercise such incidental powers not inconsistent with the provisions of this section and section 1441a of this title as are necessary and appropriate to carry out the provisions of this section.

(e) Capitalization of Funding Corporation, etc. The Thrift Depositor Protection Oversight Board shall ensure that the aggregate of the amounts obtained under this subsection shall be sufficient so that— the Funding Corporation may transfer the amounts required under paragraph (8); and the total of the face amounts (the amount of principal payable at maturity) of noninterest bearing instruments in the Funding Corporation Principal Fund are equal to the aggregate amount of principal on the obligations of the Funding Corporation. Each Federal Home Loan Bank shall purchase stock in the Funding Corporation at times and in amounts prescribed by the Thrift Depositor Protection Oversight Board. Each share of stock issued by the Funding Corporation to a Federal Home Loan Bank shall have a par value in an amount determined by the Thrift Depositor Protection Oversight Board and shall be transferable at not less than par value only among the Federal Home Loan Banks in the manner and to the extent prescribed by the Thrift Depositor Protection Oversight Board. The cumulative amount of funds invested in nonvoting capital stock of the Funding Corporation by each Federal Home Loan Bank under paragraph (1) shall not at any time exceed the sum of the amounts calculated under subparagraphs (A) and (B), as adjusted in subparagraph (C), as follows: The sum on December 31, 1988 , of— the reserves maintained by such Bank pursuant to the reserve requirement contained in the first 2 sentences of section 1436 of this title (as in effect on December 31, 1988 ); and the undivided profits of such Bank, minus the amounts invested in the capital stock of the Financing Corporation pursuant to section 1441 of this title . The amount, calculated until the date on which the Funding Corporation Principal Fund is fully funded, equal to— the sum of— the amounts added to reserves by such Bank after December 31, 1988 , pursuant to the reserve requirement contained in the first 2 sentences of section 1436 of this title (as in effect on December 31, 1988 ); and the quarterly additions to undivided profits of the Bank after December 31, 1988 ; minus the amounts invested by such Bank in the capital stock of the Financing Corporation after December 31, 1988 , pursuant to the requirement contained in section 1441 of this title . The amounts in subparagraph (B) shall be adjusted as follows: If the aggregate amount for all Federal Home Loan Banks determined under subparagraph (B)(i) is less than $300, 000, 000 p erye a r, t h e l imi t f ore a c h B ank s ha ll b e in cre a se d b y anam o u n t d e t er min e d b y t h e T h r i f t De p os i t or P ro t ec t i o n O v ers i g h tB o a r d b y m u lt i pl y in g t h e a gg re g a t e d e f i c i e n cy b y t h e p erce n t a g e a ppl i c ab l e t os u c h B anka rr i v e d a t in t h e mann er d escr ib e d in p a r a g r a p h (5) . I f t h e a gg re g a t e am o u n t f or a llF e d er a l Ho m e L o an B ank s d e t er min e d u n d ers u b p a r a g r a p h (B) (i) i s m ore t han$ 300,000,000 per year, the limit for each Bank shall be decreased by an amount determined by the Thrift Depositor Protection Oversight Board by multiplying the aggregate excess by the percentage applicable to such Bank arrived at in the manner described in paragraph (5). Of the first 1,000,000,000 amount referred to in paragraph (4), the amount which each Federal Home Loan Bank (or any successor to such Bank) shall invest shall be determined by the Thrift Depositor Protection Oversight Board by multiplying the excess amount by the percentage arrived at by dividing— the sum of the total assets (as of the most recent December 31) held by all Savings Association Insurance Fund members as of the date of funding which are members of such Bank; by the sum of the total assets (as of such date) held by all Savings Association Insurance Fund members as of the date of funding which are members of a Federal Home Loan Bank. If the amount of any Federal Home Loan Bank’s allocation under paragraph (5) exceeds the maximum amount applicable with respect to such Bank (in this paragraph referred to as a “deficient Bank”) under paragraph (3) at the time of such determination (in this paragraph referred to as the “excess amount”)— the Thrift Depositor Protection Oversight Board shall require each Federal Home Loan Bank that is not allocated an amount under paragraph (5) that exceeds its maximum under paragraph (3) (in this paragraph referred to as a “remaining Bank”) to purchase stock in the Funding Corporation (in addition to the amount determined under paragraph (5) for such remaining Bank and subject to the maximum amount applicable with respect to such remaining Bank under paragraph (3) at the time of such determination) on behalf of the deficient Bank the amount determined under subparagraph (B); the Thrift Depositor Protection Oversight Board shall require the deficient Bank to subsequently reimburse the remaining Banks out of its net earnings (or reimbursements received from other Banks) in the manner described in subparagraphs (C) and (D); and the requirements contained in subparagraph (D) relating to the use of net earnings shall apply to the deficient Bank until such Bank has reimbursed the remaining Banks for all of the excess amount. The amount of stock each remaining Federal Home Loan Bank shall be required to purchase under subparagraph (A)(i) is the amount determined by the Thrift Depositor Protection Oversight Board by multiplying the excess amount by the percentage arrived at by dividing— the cumulative amount of stock in the Funding Corporation purchased under this subsection by such remaining Bank at the time of such determination; by the aggregate of the cumulative amounts invested under this subsection by all remaining Banks at such time. If the allocation under this subparagraph results in a remaining Bank exceeding its maximum amount under paragraph (3), such excess amount shall be reallocated to the other remaining Bank in accordance with this subparagraph. A Bank on whose behalf stock is purchased under subparagraph (A)(i) shall make payments annually from amounts, if any, in its reserve account (as described in subparagraph (D)) to each Bank 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 plus interest which shall accrue at a rate equal to the annual average cost of funds in the most recent year to all Federal Home Loan Banks and which shall begin to accrue 2 years after the investments under subparagraph (A)(i) are made. The Thrift Depositor Protection Oversight Board 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 to the Banks that made purchases on its behalf according to the shares of the reimbursing Bank’s excess amount that the other Banks invested. Of the net earnings for any year of a Bank on whose behalf a purchase is made under subparagraph (A)(i) and any reimbursements received from other Banks, the amount necessary to make the reimbursements required under subparagraph (A)(ii) shall be placed in a reserve account (established in the manner prescribed by the Thrift Depositor Protection Oversight Board), which shall be available only for such reimbursements. The total amount placed in such reserve account in any year by any Bank shall not exceed an amount equal to 20 percent of the net earnings of such Bank for such year.

(f) Obligations of Funding Corporation The Funding Corporation may issue bonds, notes, debentures, and similar obligations in an aggregate amount not to exceed 300,000,000 per year that commences on the issuance date and ends on the final scheduled maturity date of the obligations, and shall select appropriate present value factors for making such determinations, in consultation with the Secretary of the Treasury. The Director shall extend or shorten the term of the payment obligations of a Federal home loan bank under this subparagraph as necessary to ensure that the value of all payments made by the Banks is equivalent to the value of an annuity referred to in clause (ii). If the Director extends the term of payment obligations beyond the final scheduled maturity date for the obligations, each Federal home loan bank shall continue to pay 20.0 percent of its net earnings (after deducting expenses relating to section 1430(j) of this title and operating expenses) to the Treasury of the United States until the value of all such payments by the Federal home loan banks is equivalent to the value of an annuity referred to in clause (ii). In the final year in which the Federal home loan banks 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 of the Federal home loan banks exceeds the remaining obligation of the Banks to the Treasury, the Director shall reduce the percentage pro rata to a level sufficient to pay the remaining obligation. The Director 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. To the extent the amounts available pursuant to subparagraphs (A), (B), and (C) are insufficient to cover the amount of interest payments, the FSLIC Resolution Fund shall transfer to the Funding Corporation any net proceeds from the sale of assets received from the Resolution Trust Corporation, which shall be used by the Funding Corporation to pay such interest. To the extent the amounts available pursuant to subparagraphs (A), (B), (C), and (D) are insufficient to cover the amount of interest payments, the Secretary 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. In each instance where the Secretary 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 upon dissolution of the Funding Corporation (to the extent the Funding Corporation may have any remaining assets). There are hereby appropriated to the Secretary, for fiscal year 1989 and each fiscal year thereafter, such sums as may be necessary to carry out clause (i). 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. Subject to terms and conditions approved by the Thrift Depositor Protection Oversight Board, the proceeds (less any discount, plus any premium, net of issuance costs) of any obligation issued by the Funding Corporation shall be used to— purchase the capital certificates issued by the Resolution Trust Corporation under section 1441a of this title ; or refund any previously issued obligation the proceeds of which were transferred in the manner described in subparagraph (A). Obligations issued under this section by the Funding Corporation, at the direction of the Thrift Depositor Protection Oversight Board shall be lawful investments, and may be accepted as security, for all fiduciary, trust, and public funds the investment or deposit of which shall be under the authority or control of the United States or any officer of the United States. All persons 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 shall also have the power to do so with respect to obligations of the Funding Corporation. Except as provided in subparagraph (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 is exempt from tax under section 1433 of this title . The Funding Corporation, like the Federal Home Loan Banks, shall be treated as an agency of the United States for purposes of the first sentence of section 3124(b) of title 31 (relating to determination of tax status of interest on obligations). For purposes of the laws administered by the Securities and Exchange Commission, obligations of the Funding Corporation— shall not be considered to be securities issued or guaranteed by a person controlled or supervised by, or acting as an instrumentality of, the Government of the United States; and shall not be considered to be “exempted securities” within the meaning of section 78c(a)(12)(A)(i) of title 15 , except that such obligations shall be considered to be exempted securities for purposes of section 78 o of title 15. Notwithstanding subparagraph (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 et seq.], subject to such terms and conditions as the Commission may prescribe. The Thrift Depositor Protection Oversight Board and the Directorate shall ensure that minority owned or controlled commercial banks, investment banking firms, underwriters, and bond counsels throughout the United States have an opportunity to participate to a significant degree in any public or negotiated offering of obligations issued under this section. Obligations of the Funding Corporation shall not be obligations of, or guaranteed as to principal by, the Federal Home Loan Bank System, the Federal Home Loan Banks, the United States, or the Resolution Trust Corporation and the obligations shall so plainly state. The Secretary 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 Subject to regulations, restrictions, and limitations prescribed by the Thrift Depositor Protection Oversight Board, assets of the Funding Corporation which are not required to be invested in capital certificates issued by the Resolution Trust Corporation under section 1441a of this title and are not needed for current interest payments shall be invested in direct obligations of the United States issued by the Secretary. Except as provided in subsection (e)(8), the Funding Corporation shall invest amounts received pursuant to subsection (e) in, and hold in a separate account to be known as the Funding Corporation Principal Fund, noninterest bearing instruments— which are direct obligations of the United States issued by the Secretary; and 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 Except as provided in subsection (f)(7)(B), the Funding Corporation shall be treated as a Federal Home Loan Bank for purposes of section 1433 of this title (to the extent such section relates to State, municipal, and local taxation) and section 1443 of this title . The Federal Reserve banks are authorized to act as depositaries for or fiscal agents or custodians of the Funding Corporation. The Funding Corporation shall be treated, for purposes of sections 9105, 1 9107, and 9108 of title 31, as a mixed-ownership Government corporation which has capital of the Government. 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 courts shall have original jurisdiction over such action, suit, or proceeding. The Funding Corporation may, without bond or security, remove any such action, suit, or proceeding from a State court to the United States District Court for the District of Columbia.

(i) Annual report The Thrift Depositor Protection Oversight Board shall annually submit a full report of the operations, activities, budget, receipts, and expenditures of the Funding Corporation for the preceding 12-month period. The report required under paragraph (1) shall include— 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; the financial operating plans and forecasts (including 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 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 . The Thrift Depositor Protection Oversight Board 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 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. Effective on the date of the dissolution of the Funding Corporation under paragraph (1), the Thrift Depositor Protection Oversight Board may exercise on behalf of the Funding Corporation any power of the Funding Corporation which the Thrift Depositor Protection Oversight Board 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: The term “administrative expenses” does not include— any interest on, or any redemption premium with respect to, any obligation of the Funding Corporation; or issuance costs. The term “custodian fee” means— 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); and any other expense incurred by the Funding Corporation in connection with the establishment or maintenance of such account. The term “Funding Corporation” means the Resolution Funding Corporation established in subsection (b). The term “Funding Corporation Principal Fund” means the separate account established under subsection (g)(2). The term “issuance costs”— means issuance fees and commissions incurred by the Funding Corporation in connection with the issuance or servicing of any obligation of the Funding Corporation; and includes 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. The term “net earnings” means net earnings without reduction for chargeoffs or expenses incurred by a Federal Home Loan Bank for the purchase of capital stock of the Financing Corporation or payments relating to the Funding Corporation required by the Thrift Depositor Protection Oversight Board under subsections (e) and (f). The term “Thrift Depositor Protection Oversight Board” means— the Thrift Depositor Protection Oversight Board of the Resolution Trust Corporation under section 1441a of this title ; and after the termination of the Resolution Trust Corporation— the Secretary of the Treasury; the Chairman of the Board 2 of Governors of the Federal Reserve System; and the Secretary of Housing and Urban Development. The term “Secretary” means the Secretary of the Treasury. The term “undivided profits” means earnings retained after dividends have been paid minus the sum of— that portion required to be added to reserves maintained pursuant to the first 2 sentences of section 1436 of this title ; and the dollar amounts held by the respective Federal Home Loan Banks in special dividend stabilization reserves on December 31, 1985 , as determined by the table set forth in section 1441(d)(7) of this title .

(l) Regulations The Thrift Depositor Protection Oversight Board 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 to carry out the provisions of this chapter, the Secretary of the Treasury, the Comptroller of the Currency, the Chairman of the Board 1 of Governors of the Federal Reserve System, the Chairperson of the Federal Deposit Insurance Corporation, the Chairperson of the National Credit Union Administration, and the Director of the Office of Thrift Supervision, upon request by any Federal Home Loan Bank— shall make available in confidence to any Federal Home Loan Bank, such reports, records, or other information as may be available, relating to the condition of any member of any Federal Home Loan Bank or any institution with respect to which any such Bank has had or contemplates having transactions under this chapter; and may perform through their examiners or other employees or agents, for the confidential use of the Federal Home Loan Bank, examinations of institutions for which such agency is the appropriate Federal banking regulatory agency. In addition, the Comptroller of the Currency, the Chairman of the Board 1 of Governors of the Federal Reserve System, the Chairperson of the National Credit Union Administration, and the Director of the Office of Thrift Supervision shall make available to the Director or any Federal Home Loan Bank the financial reports filed by members of any Bank to enable the Director or a Bank to compile and publish cost of funds indices or other financial or statistical reports.

(b) Consent by members Every member of a Federal Home Loan Bank shall, as a condition precedent thereto, be deemed— to consent to such examinations as the Bank or the Director may require for the purposes of this chapter; to agree that reports of examinations by local, State, or Federal agencies or institutions may be furnished by such authorities to the Bank or the Director upon request; and to agree to give the Bank or the Federal agency, upon request, such information as they may need to compile and publish cost of funds indices and to publish other reports or statistical summaries pertaining to the activities of Bank members.

§ 1442a Repealed. Pub. L. 106–102, title VI, § 606(c), Nov. 12, 1999, 113 Stat. 1454

§ 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 1 may provide. ( July 22, 1932, ch. 522, § 23 , 47 Stat. 739 ; Pub. L. 101–73, title VII, § 717 , Aug. 9, 1989 , 103 Stat. 422 ; Pub. L. 110–289, div. A, title II, § 1204(8) , (12), July 30, 2008 , 122 Stat. 2786 .)

§ 1444 Eligibility to membership in banks

(a) Any organization organized under the laws of any State and subject to inspection and regulation under the banking or similar laws of such State shall be eligible to become a member under this chapter if— it is organized solely for the purpose of supplying credit to its members; its membership (A) is confined exclusively to building and loan associations, savings and loan associations, cooperative banks, and homestead associations; or (B) is confined exclusively to savings banks; and of the institutions to which its membership is confined which are organized within the State, its membership includes a majority of such institutions.

(b) In all respects, but subject to such additional rules and regulations as the Director may provide, any such organization shall be a member for the purposes of this chapter.

§ 1445 Succession of Federal Home Loan Banks

Each Federal Home Loan Bank shall have succession until dissolved by the Director under this chapter or by further act of Congress. ( July 22, 1932, ch. 522, § 25 , 47 Stat. 740 ; Pub. L. 101–73, title VII, § 701(b)(1) , (3)(A), Aug. 9, 1989 , 103 Stat. 412 ; Pub. L. 110–289, div. A, title II, § 1204(8) , July 30, 2008 , 122 Stat. 2786 .)

§ 1446 Liquidation or reorganization; acquisition of assets by other banks; assumption of liabilities

(a) In general Whenever the Director 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 may prescribe, any Federal Home Loan Bank 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 may, with the approval of the Director, acquire assets of any such liquidated or reorganized bank and assume liabilities thereof, in whole or in part. At least 30 days prior to liquidating or reorganizing any Bank under this section, the Director shall notify the Bank of its determination and the facts and circumstances upon which such determination is based. The Bank may contest that determination in a hearing before the Director, in which all issues shall be determined on the record pursuant to section 554 of title 5 .

(b) Voluntary mergers authorized Any Federal Home Loan Bank may, with the approval of the Director and of the boards of directors of the Banks involved, merge with another Bank. The Director shall promulgate regulations establishing the conditions and procedures for the consideration and approval of any voluntary merger described in paragraph (1), including the procedures for Bank member approval.

§ 1447 Repealed. Pub. L. 106–102, title VI, § 606(c), Nov. 12, 1999, 113 Stat. 1454

§ 1448 Effect of partial invalidity of chapter

If any provision of this chapter, or the application thereof to any person or circumstances, is held invalid, the remainder of the chapter, and the application of such provision to other persons or circumstances, shall not be affected thereby. ( July 22, 1932, ch. 522, § 28 , 47 Stat. 740 .)

§ 1449 Reservation of right to amend or repeal chapter

The right to alter, amend, or repeal this chapter is expressly reserved. ( July 22, 1932, ch. 522, § 30 , 47 Stat. 741 .)

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CHAPTER 11 - FEDERAL HOME LOAN BANKS

CHAPTER 11 - FEDERAL HOME LOAN BANKS

Sections (50)

§ 1421 Short title

§ 1422 Definitions

§§ 1422a, 1422b Repealed. Pub. L. 110–289, div. A, title II, § 1204(1), July 30, 2008, 122 Stat. 2785

§ 1423 Federal Home Loan Bank districts; number and boundaries; establishment of Federal Home Loan Banks; names

§ 1424 Eligibility for membership

§§ 1425 to 1425b Repealed. Pub. L. 101–73, title VII, §§ 705, 716, 720, Aug. 9, 1989, 103 Stat. 416, 421, 423

§ 1426 Capital structure of Federal home loan banks

§ 1426a Exclusion from certain requirements

§ 1427 Directors

§ 1428 Examination of State laws, regulations, and procedures; studies of values, etc.

§ 1428a Repealed. Pub. L. 101–73, title VII, § 718, Aug. 9, 1989, 103 Stat. 422

§ 1429 Eligibility to secure advances

§ 1430 Advances to members

§ 1430a Omitted

§ 1430b Advances to nonmember mortgagee; terms and conditions

§ 1430c Housing goals

§ 1431 Powers and duties of banks

§ 1432 Incorporation of banks; corporate powers; housing project loans

§ 1433 Exemption from taxation; obligations acceptable as credit on debt of home owner

§ 1434 Depositaries of public money; financial agents

§ 1435 Obligations as lawful investments; liability of United States for debentures, etc., issued by banks

§ 1436 Reserves and dividends; emergency suspensions of requirements

§ 1437 Repealed. Pub. L. 101–73, title VII, § 703(a), Aug. 9, 1989, 103 Stat. 415

“SEC. 401 FSLIC AND FEDERAL HOME LOAN BANK BOARD ABOLISHED.

“SEC. 402 CONTINUATION AND COORDINATION OF CERTAIN REGULATIONS.

“SEC. 403 DETERMINATION OF TRANSFERRED FUNCTIONS AND EMPLOYEES.

“SEC. 404 RIGHTS OF EMPLOYEES OF ABOLISHED AGENCIES.

“SEC. 405 DIVISION OF PROPERTY AND FACILITIES.

“SEC. 406 REPORT.

§ 1438 Omitted

§ 1438a Nonadministrative expenses; expenses of studies and investigations

§§ 1439, 1439–1 Repealed. Pub. L. 101–73, title VII, §§ 708, 712, Aug. 9, 1989, 103 Stat. 418, 419

§ 1439a Deposits in special fund; availability for all purposes of Federal Home Loan Bank Board and Federal Home Loan Bank Administration

§ 1440 Examinations and audits

§ 1440a Sharing of information among Federal Home Loan Banks

§ 1441 Financing Corporation

§ 1441a Repealed. Pub. L. 111–203, title III, § 364(b), July 21, 2010, 124 Stat. 1555

§ 1441a–1 Definitions

§ 1441a–2 Authorization for State housing finance agencies and nonprofit entities to purchase mortgage-related assets

§ 1441a–3 RTC and FDIC properties

§ 1441b Resolution Funding Corporation established

§ 1442 Member financial information

§ 1442a Repealed. Pub. L. 106–102, title VI, § 606(c), Nov. 12, 1999, 113 Stat. 1454

§ 1443 Forms of bank stock and obligations

§ 1444 Eligibility to membership in banks

§ 1445 Succession of Federal Home Loan Banks

§ 1446 Liquidation or reorganization; acquisition of assets by other banks; assumption of liabilities

§ 1447 Repealed. Pub. L. 106–102, title VI, § 606(c), Nov. 12, 1999, 113 Stat. 1454

§ 1448 Effect of partial invalidity of chapter

§ 1449 Reservation of right to amend or repeal chapter

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§ 1421 Short title

§ 1422 Definitions

§§ 1422a, 1422b Repealed. Pub. L. 110–289, div. A, title II, § 1204(1), July 30, 2008, 122 Stat. 2785

§ 1423 Federal Home Loan Bank districts; number and boundaries; establishment of Federal Home Loan Banks; names

§ 1424 Eligibility for membership

§§ 1425 to 1425b Repealed. Pub. L. 101–73, title VII, §§ 705, 716, 720, Aug. 9, 1989, 103 Stat. 416, 421, 423

§ 1426 Capital structure of Federal home loan banks

§ 1426a Exclusion from certain requirements

§ 1427 Directors

§ 1428 Examination of State laws, regulations, and procedures; studies of values, etc.

§ 1428a Repealed. Pub. L. 101–73, title VII, § 718, Aug. 9, 1989, 103 Stat. 422

§ 1429 Eligibility to secure advances

§ 1430 Advances to members

§ 1430a Omitted

§ 1430b Advances to nonmember mortgagee; terms and conditions

§ 1430c Housing goals

§ 1431 Powers and duties of banks

§ 1432 Incorporation of banks; corporate powers; housing project loans

§ 1433 Exemption from taxation; obligations acceptable as credit on debt of home owner

§ 1434 Depositaries of public money; financial agents

§ 1435 Obligations as lawful investments; liability of United States for debentures, etc., issued by banks

§ 1436 Reserves and dividends; emergency suspensions of requirements

§ 1437 Repealed. Pub. L. 101–73, title VII, § 703(a), Aug. 9, 1989, 103 Stat. 415

§ 1438 Omitted

§ 1438a Nonadministrative expenses; expenses of studies and investigations

§§ 1439, 1439–1 Repealed. Pub. L. 101–73, title VII, §§ 708, 712, Aug. 9, 1989, 103 Stat. 418, 419

§ 1439a Deposits in special fund; availability for all purposes of Federal Home Loan Bank Board and Federal Home Loan Bank Administration

§ 1440 Examinations and audits

§ 1440a Sharing of information among Federal Home Loan Banks

§ 1441 Financing Corporation

§ 1441a Repealed. Pub. L. 111–203, title III, § 364(b), July 21, 2010, 124 Stat. 1555

§ 1441a–1 Definitions

§ 1441a–2 Authorization for State housing finance agencies and nonprofit entities to purchase mortgage-related assets

§ 1441a–3 RTC and FDIC properties

§ 1441b Resolution Funding Corporation established

§ 1442 Member financial information

§ 1442a Repealed. Pub. L. 106–102, title VI, § 606(c), Nov. 12, 1999, 113 Stat. 1454

§ 1443 Forms of bank stock and obligations

§ 1444 Eligibility to membership in banks

§ 1445 Succession of Federal Home Loan Banks

§ 1446 Liquidation or reorganization; acquisition of assets by other banks; assumption of liabilities

§ 1447 Repealed. Pub. L. 106–102, title VI, § 606(c), Nov. 12, 1999, 113 Stat. 1454

§ 1448 Effect of partial invalidity of chapter

§ 1449 Reservation of right to amend or repeal chapter