§ 1441.
(b)
Management of Financing Corporation
(1)
Directorate
The Financing 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 to such office).
(B)
2 members selected by the Director 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 shall be determined by the Director by multiplying the total administrative expenses for any period by the percentage arrived at by dividing—
(i)
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
(ii)
the aggregate amount the Director required all Federal Home Loan Banks to invest (as of the time of such determination) under such paragraphs.
(C)
Administrative expenses defined
For purposes of this paragraph, the term “administrative expenses” does not include—
(i)
issuance costs (as such term is defined in subsection (g)(5)(A));
(ii)
any interest on (and any redemption premium with respect to) any obligation of the Financing Corporation; or
(iii)
custodian fees (as such term is defined in subsection (g)(5)(B)).
(8)
Regulation by Director
(9)
No compensation from Financing Corporation
(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:
(1)
To issue nonvoting capital stock to the Federal Home Loan Banks.
(2)
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.
(3)
To issue debentures, bonds, or other obligations and to borrow, to give security for any amount borrowed, and to pay interest on (and any redemption premium with respect to) any such obligation or amount.
(4)
To impose assessments in accordance with subsection (f).
(5)
To adopt, alter, and use a corporate seal.
(6)
To have succession until dissolved.
(7)
To enter into contracts.
(8)
To sue and be sued in its corporate capacity, and to complain and defend in any action brought by or against the Financing Corporation in any State or Federal court of competent jurisdiction.
(9)
To exercise such incidental powers not inconsistent with the provisions of this section as are necessary or appropriate to carry out the provisions of this section.
(d)
Capitalization of Financing Corporation
(1)
Purchase of capital stock by Federal Home Loan Banks
(B)
Par value; transferability
(2)
Aggregate dollar amount limitation on all investments
(3)
Maximum investment amount limitation for each Federal Home Loan Bank
The cumulative amount of funds invested in nonvoting capital stock of the Financing Corporation by each Federal Home Loan Bank shall not exceed the aggregate amount of—
(A)
the sum of—
(i)
the reserves maintained by such bank on
December 31, 1985, pursuant to the requirement contained in the first 2 sentences of
section 1436 of this title; and
(ii)
the undivided profits (as defined in paragraph (7)) of such bank on such date; and
(B)
the sum of—
(i)
the amounts added to reserves after
December 31, 1985, pursuant to the requirement contained in the first 2 sentences of
section 1436 of this title; and
(ii)
the undivided profits of such bank accruing after such date.
(4)
Pro rata distribution of 1st $1,000,000,000 invested in Financing Corporation by Home Loan Banks
(5)
Pro rata distribution of amounts required to be invested in excess of $1,000,000,000
With respect to any amount in excess of the $1,000,000,000 amount referred to in paragraph (4) which the Director may require the Federal Home Loan Banks to invest in capital stock of the Financing Corporation under this subsection, the amount which each Federal Home Loan Bank (or any successor to such bank) shall invest shall be determined by the Director by multiplying such excess amount by the percentage arrived at by dividing—
(A)
the sum of the total assets (as of the most recent December 31) held by all Savings Association Insurance Fund members 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 which are members of any Federal Home Loan Bank.
(6)
Special provisions relating to maximum amount limitations
(A)
In general
If the amount any Federal Home Loan Bank is required to invest in capital stock of the Financing Corporation pursuant to a determination by the Director under paragraph (5) (or under subparagraph (B) of this paragraph) exceeds the maximum investment amount applicable with respect to such bank under paragraph (3) at the time of such determination (hereinafter in this paragraph referred to as the “excess amount”)—
(i)
the Director shall require each remaining Federal Home Loan Bank to invest (in addition to the amount determined under paragraph (5) for such remaining bank and subject to the maximum investment amount applicable with respect to such remaining bank under paragraph (3) at the time of such determination) in such capital stock on behalf of the bank in the amount determined under subparagraph (B);
(ii)
the Director shall require the bank to subsequently purchase the excess amount of capital stock from the remaining banks in the manner described in subparagraph (C); and
(iii)
the requirements contained in subparagraphs (D) and (E) relating to the use of net earnings shall apply to such bank until the bank has purchased all of the excess amount of capital stock.
(B)
Allocation of excess amount among remaining Home Loan Banks
The amount each remaining Federal Home Loan Bank shall be required to invest under subparagraph (A)(i) is the amount determined by the Director by multiplying the excess amount by the percentage arrived at by dividing—
(i)
the amount of capital stock of the Financing Corporation held by such remaining bank at the time of such determination; by
(ii)
the aggregate amount of such stock held by all remaining banks at such time.
(D)
Limitation on dividends
(E)
Transfer to account for purchase of stock required
(7)
Undivided profits defined
For purposes of paragraph (3), the term “undivided profits” means retained earnings minus the sum of—
(A)
that portion required to be added to reserves maintained pursuant to the first two sentences of
section 1436 of this title; and
(B)
the dollar amounts held by the respective Federal Home Loan Banks in special dividend stabilization reserves on
December 31, 1985, as determined under the following table:
(e)
Obligations of Financing Corporation
(1)
Limitation on amount of outstanding obligations
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—
(A)
an amount equal to the greater of—
(i)
5 times the amount of the nonvoting capital stock of the Financing Corporation which is outstanding at such time; or
(ii)
the sum of the face amounts (the amount of principal payable at maturity) of securities described in subsection (g)(2) which are held at such time in the segregated account established pursuant to such subsection; or
(2)
Termination of borrowing authority
(3)
Limitation on term of obligations
No obligation of the Financing Corporation may be issued which matures—
(A)
more than 30 years after the date of issue; or
(B)
after December 31, 2026.
(4)
Investment of United States funds in obligations
(5)
Market for obligations
(6)
No full faith and credit of the United States
(8)
Obligations are exempt securities
(9)
Minority participation in public offerings
(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:
(1)
Preenactment assessments
(2)
New assessment authority
(3)
Receivership proceeds
(g)
Use and disposition of assets of Financing Corporation not invested in FSLIC
(1)
In general
Subject to such regulations, restrictions, and limitations as may be prescribed by the Director, 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—
(A)
direct obligations of the United States;
(B)
obligations, participations, or other instruments of, or issued by, the Federal National Mortgage Association or the Government National Mortgage Association;
(C)
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
(D)
any other security in which it is lawful for fiduciary and trust funds to be invested under the laws of any State.
(2)
Segregated account for zero coupon instruments held to assure payment of principal
The Financing Corporation shall invest in, and hold in a segregated account, noninterest bearing instruments—
(A)
which are securities described in paragraph (1); and
(B)
the total of the face amounts (the amount of principal payable at maturity) of which is approximately equal to the aggregate amount of principal on the obligations of the Financing Corporation,
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.
(3)
Dollar amount limitation on investment in zero coupon instruments for segregated account
(4)
Exception for payment of issuance costs, interest, and custodian fees
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—
(B)
any interest on (and any redemption premium with respect to) any obligation of the Financing Corporation; and
(5)
Definitions
For purposes of this subsection—
(A)
Issuance costs
The term “issuance costs”—
(i)
means issuance fees and commissions incurred by the Financing Corporation in connection with the issuance or servicing of any obligation of the Financing Corporation; and
(ii)
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.
(B)
Custodian fees
The term “custodian fee” means—
(i)
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
(ii)
any other expense incurred by the Financing Corporation in connection with the establishment or maintenance of such account.
([July 22, 1932, ch. 522, § 21], as added [Pub. L. 100–86, title III, § 302], Aug. 10, 1987, [101 Stat. 585]; amended [Pub. L. 101–73, title V, § 512], title VII, §§ 701(b)(2), 713, Aug. 9, 1989, [103 Stat. 406], 412, 419; [Pub. L. 102–233, title I, § 104], title III, § 302(b), Dec. 12, 1991, [105 Stat. 1762], 1767; [Pub. L. 102–550, title XVI, § 1611(c)], Oct. 28, 1992, [106 Stat. 4090]; [Pub. L. 104–208, div. A, title II, § 2703(a)], Sept. 30, 1996, [110 Stat. 3009–485]; [Pub. L. 109–173, § 9(d)(2)], Feb. 15, 2006, [119 Stat. 3616]; [Pub. L. 110–289, div. A, title II, § 1204(6)], (8), (12), July 30, 2008, [122 Stat. 2786].)