§ 1441b.
(c)
Management of Funding Corporation
(1)
Directorate
The Funding Corporation shall be under the management of a Directorate composed of 3 members as follows:
(A)
The director of the Office of Finance of the Federal Home Loan Banks (or the head of any successor office).
(B)
2 members selected by the Thrift Depositor Protection Oversight Board from among the presidents of the Federal Home Loan Banks.
(3)
Vacancy
If any member leaves the office in which such member was serving when appointed to the Directorate—
(A)
such member’s service on the Directorate shall terminate on the date such member leaves such office; and
(B)
the successor to the office of such member shall serve the remainder of such member’s term.
(4)
Equal representation of banks
(7)
Administrative expenses
(B)
Pro rata distribution
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—
(i)
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
(ii)
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.
(8)
Regulation by Thrift Depositor Protection Oversight Board
(9)
No compensation from Funding Corporation
(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:
(2)
Purchase capital stock; transfer amounts
(e)
Capitalization of Funding Corporation, etc.
(1)
In general
(A)
Amount required
The Thrift Depositor Protection Oversight Board shall ensure that the aggregate of the amounts obtained under this subsection shall be sufficient so that—
(i)
the Funding Corporation may transfer the amounts required under paragraph (8); and
(ii)
the total of the face amounts (the amount of principal payable at maturity) of noninterest bearing instruments in the Funding Corporation Principal Fund are equal to the aggregate amount of principal on the obligations of the Funding Corporation.
(B)
Purchases of stock by Federal Home Loan Banks
(2)
Par value; transferability
(3)
Maximum investment amount limitation for each Federal Home Loan Bank
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:
(A)
Reserves and undivided profits on December 31, 1988
The sum on December 31, 1988, of—
(i)
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
(ii)
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.
(B)
Subsequent additions to reserves and undivided profits
The amount, calculated until the date on which the Funding Corporation Principal Fund is fully funded, equal to—
(i)
the sum of—
(I)
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
(II)
the quarterly additions to undivided profits of the Bank after December 31, 1988; minus
(ii)
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.
(C)
Annual adjustment
The amounts in subparagraph (B) shall be adjusted as follows:
(4)
Pro rata distribution of first $1,000,000,000 invested in Funding Corporation by Federal Home Loan Banks
(5)
Pro rata distribution of amounts required to be invested in excess of $1,000,000,000
Of any amount which the Thrift Depositor Protection Oversight Board may require the Federal Home Loan Banks to invest in capital stock of the Funding Corporation under this subsection in excess of the $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—
(A)
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
(B)
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.
(6)
Special provisions relating to maximum amount limitations
(A)
In general
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”)—
(i)
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);
(ii)
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
(iii)
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.
(B)
Allocation of excess amount among remaining Federal Home Loan Banks
(i)
In general
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—
(I)
the cumulative amount of stock in the Funding Corporation purchased under this subsection by such remaining Bank at the time of such determination; by
(II)
the aggregate of the cumulative amounts invested under this subsection by all remaining Banks at such time.
(C)
Reimbursement procedure
(ii)
Determination of amounts
(D)
Transfer to account for reimbursements required
(f)
Obligations of Funding Corporation
(2)
Interest payments
The Funding Corporation shall pay the interest due on such obligations from funds obtained for such interest payments from the following sources:
(A)
Earnings on certain assets
(B)
Proceeds from Resolution Trust Corporation
To the extent the amounts available pursuant to subparagraph (A) are insufficient to cover the amount of interest payments, the Resolution Trust Corporation shall pay to the Funding Corporation—
(i)
the liquidating dividends and payments made on claims received by the Resolution Trust Corporation from receiverships to the extent such proceeds are determined by the Thrift Depositor Protection Oversight Board to be in excess of funds presently necessary for resolution costs; and
(ii)
any proceeds from warrants and participations acquired by the Resolution Trust Corporation.
(C)
Payments by Federal home loan banks
(ii)
Annual determination
(iii)
Payment term alterations
(iv)
Term beyond maturity
(D)
Proceeds from sale of assets
(E)
Treasury backup
(ii)
Liability of Funding Corporation
(iii)
Appropriation of funds
(4)
Proceeds to be transferred to Resolution Trust Corporation
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—
(B)
refund any previously issued obligation the proceeds of which were transferred in the manner described in subparagraph (A).
(5)
Investment of United States funds in obligations
(6)
Market for obligations
(8)
Obligations not exempt securities
(A)
In general
For purposes of the laws administered by the Securities and Exchange Commission, obligations of the Funding Corporation—
(i)
shall not be considered to be securities issued or guaranteed by a person controlled or supervised by, or acting as an instrumentality of, the Government of the United States; and
(ii)
shall not be considered to be “exempted securities” within the meaning of
section 78c(a)(12)(A)(i) of title 15, except that such obligations shall be considered to be exempted securities for purposes of section 78
o of title 15.
(B)
Authority of Commission
(9)
Minority participation in public or negotiated offerings
(10)
No full faith and credit of the United States
(g)
Use and disposition of assets of Funding Corporation not transferred to Resolution Trust Corporation
(2)
Separate account for zero coupon instruments held to ensure payment of principal
Except as provided in subsection (e)(8), the Funding Corporation shall invest amounts received pursuant to subsection (e) in, and hold in a separate account to be known as the Funding Corporation Principal Fund, noninterest bearing instruments—
(A)
which are direct obligations of the United States issued by the Secretary; and
(B)
the total of the face amounts (the amount of principal payable at maturity) of which is approximately equal to the aggregate amount of principal on the obligations of the Funding Corporation.
(k)
Definitions
For purposes of this section, the following definitions shall apply:
(1)
Administrative expenses
The term “administrative expenses” does not include—
(A)
any interest on, or any redemption premium with respect to, any obligation of the Funding Corporation; or
(2)
Custodian fee
The term “custodian fee” means—
(A)
any fee incurred by the Funding Corporation in connection with the transfer of any security to, or the maintenance of any security in, the segregated account established under subsection (g); and
(B)
any other expense incurred by the Funding Corporation in connection with the establishment or maintenance of such account.
(4)
Funding Corporation Principal Fund
(5)
Issuance costs
The term “issuance costs”—
(A)
means issuance fees and commissions incurred by the Funding Corporation in connection with the issuance or servicing of any obligation of the Funding Corporation; and
(B)
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.
(7)
Thrift Depositor Protection Oversight Board
The term “Thrift Depositor Protection Oversight Board” means—
(B)
after the termination of the Resolution Trust Corporation—
(i)
the Secretary of the Treasury;
(ii)
the Chairman of the Board
2
See 2008 Amendment note below.
of Governors of the Federal Reserve System; and
(iii)
the Secretary of Housing and Urban Development.
(9)
Undivided profits
The term “undivided profits” means earnings retained after dividends have been paid minus the sum of—
(B)
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.
([July 22, 1932, ch. 522, § 21B], as added [Pub. L. 101–73, title V, § 511(a)], Aug. 9, 1989, [103 Stat. 394]; amended [Pub. L. 102–233, title III, § 302(b)], Dec. 12, 1991, [105 Stat. 1767]; [Pub. L. 102–550, title XVI, § 1613(a)(7)], (9), Oct. 28, 1992, [106 Stat. 4092]; [Pub. L. 104–208, div. A, title II, § 2704(d)(5)], (11)(E), (F), Sept. 30, 1996, [110 Stat. 3009–488], 3009–489; [Pub. L. 106–102, title VI, § 607(a)], Nov. 12, 1999, [113 Stat. 1455]; [Pub. L. 109–171, title II, § 2102(b)], Feb. 8, 2006, [120 Stat. 9]; [Pub. L. 109–173, § 9(d)(7)], (8), Feb. 15, 2006, [119 Stat. 3617]; [Pub. L. 110–289, div. A, title II], §§ 1204(8)–(10), (12), 1213, July 30, 2008, [122 Stat. 2786], 2791.)