I

103D CONGRESS

1ST SESSION H. R. 1085

To modernize and improve the Federal home loan bank system in order

to enhance the availability of housing finance, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 24, 1993

Mr. BAKER of Louisiana (for himself and Mr. NEAL of North Carolina) introduced the following bill; which was referred to the Committee on Banking, Finance and Urban Affairs

A BILL

To modernize and improve the Federal home loan bank system in order to enhance the availability of housing finance, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Federal Home Loan

5 Bank Modernization Act of 1993’’.

6 SEC. 2. EQUAL ACCESS AND UNIFORM MEMBERSHIP RE7 QUIREMENTS.

8 (a) SYSTEMWIDE VOLUNTARY MEMBERSHIP.—
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1 (1) IN GENERAL.—Section 4(a) of the Federal

2 Home Loan Bank Act (12 U.S.C. 1424(a)) is

3 amended by adding at the end the following new

4 paragraph:

5 ‘‘(2) VOLUNTARY MEMBERSHIP.—Except as

6 provided in section 6(e) of the Federal Home Loan

7 Bank Act (12 USC 1426(e)), no member of a Fed8 eral home loan bank may be required to remain a

9 member of any such bank by any agency, depart10 ment or independent establishment of the United

11 States.’’.

12 (2) VOLUNTARY EXITS FROM SYSTEM.—The 1st

13 sentence of section 6(e) of the Federal Home Loan

14 Bank Act (12 U.S.C. 1426(e)) is amended by strik15 ing ‘‘other than a Federal savings and loan associa16 tion’’.

17 (b) AMENDMENTS RELATING TO STOCK PURCHASE

18 REQUIREMENTS AND OTHER SPECIAL RESTRICTIONS.—

19 (1) REPEAL OF STOCK PURCHASE REQUIRE20 MENTS AND 30 PERCENT LENDING CAP.—Section 10

21 of the Federal Home Loan Bank Act (12 U.S.C.

22 1430) is amended by striking subsection (e).

23 (2) SUBSTITUTION OF REQUIREMENT BASED

24 ON TOTAL ASSETS.—Section 6(b)(1) of the Federal

25 Home Loan Bank Act (12 U.S.C. 1426(b)(1)) is
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1 amended by striking ‘‘1 per centum of the subscrib2 er’s aggregate unpaid loan principal’’ and inserting

3 ‘‘0.3 percent of the subscriber’s total assets’’.

4 (3) ELIGIBILITY OF NON-QTL SAVINGS ASSOCIA5 TIONS TO OBTAIN NEW ADVANCES.—Section

6 10(m)(3)(B)(i) of the Home Owners’ Loan Act (12

7 U.S.C. 1467a(m)(3)(B)(i)) is amended by striking

8 subclause (III).

9 (4) ELIGIBILITY REQUIREMENT RELATING TO

10 MORTGAGE-RELATED ASSETS.—Section 4(a)(2)(A)

11 of the Federal Home Loan Bank Act (12 U.S.C.

12 1424(a)(2)(A)) is amended by striking ‘‘residential

13 mortgage loans’’ and inserting ‘‘mortgage-related as14 sets’’.

15 (c) REDUCTION OF PERIOD REQUIRED BEFORE

16 WITHDRAWN MEMBER MAY RESUME MEMBERSHIP.—

17 Section 6(h) of the Federal Home Loan Bank Act (12

18 U.S.C. 1426(h)) is amended by striking ‘‘10’’ and insert19 ing ‘‘5’’.

20 SEC. 3. MODIFICATION OF ANNUAL CONTRIBUTION TO THE

21 RESOLUTION FUNDING CORPORATION.

22 (a) OBLIGATIONS OF THE FEDERAL HOME LOAN

23 BANKS.—Section 21B of the Federal Home Loan Bank

24 Act (12 U.S.C. 1441b) is amended—

25 (1) in subsection (e)(3)(C)—
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1 (A) in clause (i), by striking ‘‘is less than

2 $300,000,000 per year’’ and inserting ‘‘for any

3 year is less than the amount which is equal to

4 the lesser of 20 percent of the aggregate net

5 earnings of such banks for such year or

6 $300,000,000’’; and

7 (B) in clause (ii), by striking ‘‘is more

8 than $300,000,000 per year’’ and inserting ‘‘for

9 any year is more than the amount which is

10 equal to the lesser of 20 percent of the aggre11 gate net earnings of such banks for such year

12 or $300,000,000’’; and

13 (2) in subsection (f)(2)(C)—

14 (A) by striking ‘‘the aggregate amount of

15 $300,000,000’’ and inserting ‘‘the amount

16 which is equal to the lesser of 20 percent of the

17 aggregate net earnings of such banks for such

18 year or $300,000,000’’; and

19 (B) by striking ‘‘as follows:’’ and all that

20 follows and inserting ‘‘by requiring each such

21 bank to pay an equal percentage of the net

22 earnings of the bank for the year for which

23 such payment is so required, up to a maximum

24 of 20 percent of the net earnings of the bank.’’;
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1 (b) BACKUP FOR REDUCTION IN PAYMENTS DUE TO

2 PARAGRAPH (1) AMENDMENTS.—Section 21B(f)(2) of the

3 Federal Home Loan Bank Act (12 U.S.C. 1441b(f)(2))

4 is amended—

5 (1) by redesignating subparagraphs (D) and

6 (E) as subparagraphs (E) and (F), respectively; and

7 (2) by inserting after subparagraph (C) the fol8 lowing:

9 ‘‘(D) BACKUP ASSESSMENT AUTHORITY

10 FOR CERTAIN SUBPARAGRAPH (C) REDUC11 TIONS.—

12 ‘‘(i) IN GENERAL.—To the extent the

13 amounts available pursuant to subpara14 graphs (A), (B), and (C) are insufficient to

15 cover the amount of interest payments for

16 any year, the Federal Housing Finance

17 Board shall impose an assessment on each

18 assessable institution at a rate determined

19 by such Board to be necessary for such

20 Board to collect an amount equal to the

21 amount of the deficiency.

22 ‘‘(ii) MAXIMUM AMOUNT LIMITA23 TION.—The aggregate amount of assess24 ments imposed under clause (i) for any

25 year may not exceed the amount by which
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1 $300,000,000 exceeds 20 percent of the

2 aggregate net earnings of the Federal

3 home loan banks for such year.

4 ‘‘(iii) APPLIED TO INTEREST PAY5 MENTS.—The amount received by the Fed6 eral Housing Finance Board from assess7 ments imposed under this subparagraph

8 shall be transferred to the Funding Cor9 poration to make such interest payments.

10 ‘‘(iv) PROCEDURES TO ENSURE TIME11 LY PAYMENTS.—For purposes of carrying

12 out this paragraph, the Federal Housing

13 Finance Board shall establish such proce14 dures for imposing and collecting any as15 sessment under this subparagraph for any

16 year as such Board determines are nec17 essary to ensure that the payment under

18 clause (iii) will be made no later than the

19 date by which any payment by the Federal

20 home loan banks under subparagraph (C)

21 is due for such year.

22 ‘‘(v) ASSESSABLE INSTITUTION DE23 FINED.—For purposes of this subpara24 graph, the term ‘assessable institution’

25 means—
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1 ‘‘(I) any depository institution

2 (as defined in section 3 of the Federal

3 Deposit Insurance Act) which, at any

4 time on or after January 1, 1993, has

5 been a Savings Association Insurance

6 Fund member (as defined in section

7 7(l)(5) of the Federal Deposit Insur8 ance Act) and, at the same time, has

9 been a member of any Federal home

10 loan bank; and

11 ‘‘(II) any depository institution

12 (as defined in section 3 of the Federal

13 Deposit Insurance Act) which ac14 quires (as defined in section

15 13(f)(8)(B) of such Act), or which re16 sults from the merger or consolidation

17 of any depository institution with, any

18 depository institution described in

19 subclause (I).’’.

20 (c) TECHNICAL AND CONFORMING AMENDMENTS.—

21 (1) Section 21B(f)(2) of the Federal Home Loan Bank

22 Act (12 U.S.C. 1441b(f)(2)) is amended—

23 (A) in subparagraph (E) (as so redesignated by

24 subsection (b)(1) of this section), by striking ‘‘(B),

25 and (C)’’ and inserting ‘‘(B), (C), and (D)’’; and
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1 (B) in subparagraph (F)(i) (as so redesignated

2 by subsection (b)(1) of this section), by striking

3 ‘‘(C), and (D)’’ and inserting ‘‘(C), (D), and (E)’’.

4 (2) Section 6(b)(3) of the Federal Home Loan

5 Bank Act (12 U.S.C. 1426(b)(3)) is amended by

6 striking ‘‘Except as provided in Subsection (i)’’ and

7 inserting ‘‘Except as provided in subsection (e)’’.

8 (3) Section 6(b)(4) of the Federal Home Loan

9 Bank Act (12 U.S.C. 1426(b)(4)) is deleted and sec10 tion 6(b)(5) is redesignated as Section 6(b)(4).

11 SEC. 4. STUDY OF FEASIBILITY OF CREATING A CLASS OF

12 AFFILIATE MEMBERSHIP OF THE FEDERAL

13 HOME LOAN BANKS FOR MORTGAGE BANK14 ERS AND STATE HOUSING AUTHORITIES; RE15 PORT TO THE CONGRESS.

16 (a) STUDY.—The Federal Housing Finance Board

17 shall study the feasibility of creating a class of affiliate

18 members of the Federal home loan banks for institutions

19 that make long-term home mortgage loans, and the desir20 ability of applying requirements to such members that dif21 fer from the requirements currently applicable to the

22 members of the Federal home loan banks in the areas of—

23 (1) the ability to obtain loans from the Federal

24 home loan banks,
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1 (2) the rate of interest to be charged on such

2 loans,

3 (3) the collateral required for such loans,

4 (4) restrictions on use of such loans, and

5 (5) the stock of the Federal home loan banks

6 required to be purchased.

7 (b) REPORT.—Not later than December 31, 1993,

8 the Federal Housing Finance Board shall submit to the

9 Congress a report that contains the findings of the study

10 required by subsection (a).

11 SEC. 5. EFFECTIVE DATE.

12 The amendments made by sections 2 and 3 shall take

13 effect at the end of the 6-month period beginning on the

14 date of the enactment of this Act.

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