Chapter 11, Section 1426, Subsection (a) · 12 U.S.C. Chapter 11 — FEDERAL HOME LOAN BANKS

Contents

(a)

(1)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—

(A)the leverage requirement specified in paragraph (2); and

(B)the risk-based capital requirements, in accordance with paragraph (3).

(2)

(A)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.

(B)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.

(3)

(A)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.

(B)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.

(4)The regulations issued by the Director under paragraph (1) shall—

(A)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—

(i)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

(ii)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;

(B)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;

(C)prescribe the manner in which stock of a Federal home loan bank may be sold, transferred, redeemed, or repurchased; and

(D)provide the manner of disposition of outstanding stock held by, and the liquidation of any claims of the Federal home loan bank 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.

(5)For purposes of determining compliance with the capital standards established under this subsection—

(A)permanent capital of a Federal home loan bank shall include—

(i)the amounts paid for the Class B stock; and

(ii)the retained earnings of the bank (as determined in accordance with generally accepted accounting principles); and

(B)total capital of a Federal home loan bank shall include—

(i)permanent capital;

(ii)the amounts paid for the Class A stock;

(iii)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

(iv)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.

(6)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.

United States Government work; public domain under 17 U.S.C. § 105.

Defined terms · 34

Show every defined 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.
Agency
means the Federal Housing Finance Agency, established under section 4511 of this title.
Bank
means a bank established under the authority of this chapter.
Commission
means the Securities and Exchange Commission;
community financial institution
means a member—
community-oriented mortgage lending
means providing loans—
corporation concerned
means—
covered property
means any property—
custodian fee
means—
Director
means the Director of the Federal Housing Finance Agency.
Directorate
means the directorate established in the manner provided in subsection (b)(1) to manage the Financing Corporation.
Federal Home Loan Bank System
means the Federal Home Loan Banks under the supervision of the Director.
Funding Corporation
means the Resolution Funding Corporation established in subsection (b).
Funding Corporation Principal Fund
means the separate account established under subsection (g)(2).
governmental agency
means any agency or entity of the Federal Government or a State or local government.
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.
home mortgage loan
means a loan made by a member upon the security of a home mortgage.
insured depository institution
has the same meaning as in section 1813 of this title 5
low- or moderate-income household
means any household which has an income of 80 percent or less of the area median.
low- or moderate-income neighborhood
means any neighborhood in which 51 percent or more of the households are low- or moderate-income households.
member
means any institution which has subscribed for the stock of a Federal Home Loan Bank.
mortgage-related assets
means— which are located within the jurisdiction of the applicable State housing finance authority or within the geographical area served by the nonprofit entity.
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.
net income
means income after deduction of all associated expenses calculated in accordance with generally accepted accounting principles.
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.]).
savings association
has the meaning given to such term in section 3 of the Federal Deposit Insurance Act [12 U.S.C. 1813].
Secretary
means the Secretary of the Treasury.
securities laws
has the same meaning as in section 78c(a)(47) of title 15.
State housing finance authority
means any public agency, authority, or corporation which—
Thrift Depositor Protection Oversight Board
means—
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.
undeveloped
means—
undivided profits
means earnings retained after dividends have been paid minus the sum of—
very low-income household
means any household that has an income of 50 percent or less of the area median.