II 

115TH CONGRESS 

2D SESSION S. 2361 

To amend the Federal Home Loan Bank Act to allow a captive insurance 

company that was a member of a Federal Home Loan Bank before 

January 19, 2016, to continue or restore the membership of the captive 

insurance company in the Federal Home Loan Bank, and for other 

purposes. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 30, 2018 

Ms. DUCKWORTH (for herself, Mr. JOHNSON, and Mr. SCOTT) introduced the 

following bill; which was read twice and referred to the Committee on 

Banking, Housing, and Urban Affairs 

A BILL 

To amend the Federal Home Loan Bank Act to allow a 

captive insurance company that was a member of a Federal Home Loan Bank before January 19, 2016, to 

continue or restore the membership of the captive insurance company in the Federal Home Loan Bank, 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 ‘‘Housing Opportunity 

5 Mortgage Expansion Act’’. 


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1 SEC. 2. MEMBERSHIP ELIGIBILITY OF CERTAIN CAPTIVE 

2 INSURANCE COMPANIES. 

3 (a) IN GENERAL.—The Federal Home Loan Bank 

4 Act (12 U.S.C. 1422 et seq.) is amended— 

5 (1) in section 4 (12 U.S.C. 1424), by adding at 

6 the end the following: 

7 ‘‘(d) MEMBERSHIP ELIGIBILITY OF CERTAIN CAP8 TIVE INSURANCE COMPANIES.— 

9 ‘‘(1) DEFINITIONS.—In this subsection— 

10 ‘‘(A) the terms ‘affiliate’, ‘long-term’, and 

11 ‘residential mortgage loan’ have the meanings 

12 given those terms in section 1263.1 of title 12, 

13 Code of Federal Regulations, as in effect on the 

14 date of enactment of this subsection; and 

15 ‘‘(B) the term ‘covered captive insurance 

16 company’ means a captive insurance company— 

17 ‘‘(i) the primary insurance business of 

18 which is, or was on January 19, 2016, the 

19 insurance of an affiliate; 

20 ‘‘(ii) that was admitted to membership 

21 of a Federal Home Loan Bank before Jan22 uary 19, 2016; and 

23 ‘‘(iii) that, due solely to the change in 

24 the treatment of captive insurance compa25 nies in the final rule of the Agency entitled 

26 ‘Members of Federal Home Loan Banks’ 


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1 (81 Fed. Reg. 3246 (January 20, 

2 2016))— 

3 ‘‘(I) was required to terminate 

4 membership in the Federal Home 

5 Loan Bank; or 

6 ‘‘(II) will have membership in the 

7 Federal Home Loan Bank terminated. 

8 ‘‘(2) CONTINUATION OR RESTORATION OF MEM9 BERSHIP.—A covered captive insurance company 

10 may continue membership or have membership re11 stored in the same Federal Home Loan Bank de12 scribed in paragraph (1)(B)(ii) if— 

13 ‘‘(A) the Federal Home Loan Bank deter14 mines, including based on information sub15 mitted by the covered captive insurance com16 pany, that— 

17 ‘‘(i) the affiliate insured by the cov18 ered captive insurance company makes, 

19 owns, or acquires long-term residential 

20 mortgage loans; and 

21 ‘‘(ii) the covered captive insurance 

22 company will comply with the membership 

23 eligibility requirements described in sub24 sections (a), (b), and (c) of section 1263.6 


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1 of title 12, Code of Federal Regulations, 

2 upon restoring membership; and 

3 ‘‘(B) the covered captive insurance com4 pany continues to be owned, or upon restoration 

5 of membership is owned and continues to be 

6 owned, including direct ownership by a control7 ling entity or indirect ownership through one or 

8 more holding companies, by the same entity 

9 that owned the covered captive insurance com10 pany on the date of enactment of this sub11 section. 

12 ‘‘(3) BENEFITS.— 

13 ‘‘(A) IN GENERAL.—A covered captive in14 surance company for which membership in a 

15 Federal Home Loan Bank is continued or re16 stored under paragraph (2) shall have the same 

17 benefits of membership in the Federal Home 

18 Loan Bank as the covered captive insurance 

19 company had before January 19, 2016. 

20 ‘‘(B) APPLICATION OF REGULATION.—Sec21 tion 1263.6(e) of title 12, Code of Federal Reg22 ulations, or any successor thereto, shall not 

23 apply to a covered captive insurance company 

24 for which membership in a Federal Home Loan 


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1 Bank is continued or restored under paragraph 

2 (2). 

3 ‘‘(C) CAPTIVES TREATED AS INSURANCE

4 COMPANIES.—Except as otherwise specifically 

5 provided for in this Act, for purposes of this 

6 Act and any regulations promulgated under this 

7 Act, a covered captive insurance company shall 

8 be treated as an insurance company. 

9 ‘‘(4) LIMITATION ON ADVANCES.—With respect 

10 to a covered captive insurance company for which 

11 membership in a Federal Home Loan Bank is con12 tinued or restored under paragraph (2) and that is 

13 not an affiliate of a depository financial institution, 

14 the Federal Home Loan Bank may not make any 

15 advances to the covered captive insurance company 

16 in an amount that, in the aggregate, is greater than 

17 50 percent of the total assets of the covered captive 

18 insurance company unless the Federal Home Loan 

19 Bank has received from the affiliate of the covered 

20 captive insurance company or the controlling entity 

21 described in paragraph (2)(B) a guarantee of pay22 ment for any outstanding advances, which shall be 

23 in addition to any collateral otherwise required to se24 cure the advances.’’; and 

25 (2) in section 6(g) (12 U.S.C. 1426(g))— 


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1 (A) in paragraph (1), by striking ‘‘para2 graph (2)’’ and inserting ‘‘paragraphs (2) and 

3 (3)’’; and 

4 (B) by adding at the end the following: 

5 ‘‘(3) EXCEPTION FOR CERTAIN CAPTIVE INSUR6 ANCE COMPANIES.—A covered captive insurance 

7 company (as defined in section 4(d)(1)) for which 

8 membership in a Federal Home Loan Bank is re9 stored under section 4(d)(2)— 

10 ‘‘(A) shall not be subject to the 5-year pe11 riod described in paragraph (1); and 

12 ‘‘(B) may acquire shares of the Federal 

13 Home Loan Bank beginning after the member14 ship is restored.’’. 

Æ 


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