II 

114TH CONGRESS 

1ST SESSION S. 1367 

To amend the Federal Home Loan Bank Act with respect to membership 

eligibility of certain institutions. 

IN THE SENATE OF THE UNITED STATES 

MAY 18, 2015 

Mr. DONNELLY (for himself and Mr. PORTMAN) 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 with respect 

to membership eligibility of certain institutions. 

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

3 SECTION 1. PRIVATELY INSURED CREDIT UNIONS AUTHOR4 IZED TO BECOME MEMBERS OF A FEDERAL 

5 HOME LOAN BANK. 

6 (a) IN GENERAL.—Section 4(a) of the Federal Home 

7 Loan Bank Act (12 U.S.C. 1424(a)) is amended by adding 

8 at the end the following: 

9 ‘‘(5) CERTAIN PRIVATELY INSURED CREDIT

10 UNIONS.— 


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1 ‘‘(A) IN GENERAL.—Subject to the re2 quirements of subparagraph (B), a credit union 

3 that lacks insurance of its member accounts 

4 under Federal law shall be treated as an in5 sured depository institution for purposes of this 

6 Act. 

7 ‘‘(B) CERTIFICATION BY APPROPRIATE

8 STATE SUPERVISOR.—For purposes of this 

9 paragraph, a credit union that lacks insurance 

10 of its member accounts under Federal law and 

11 that has applied for membership in a Federal 

12 home loan bank shall be treated as an insured 

13 depository institution if the following has oc14 curred: 

15 ‘‘(i) DETERMINATION BY STATE SU16 PERVISOR OF THE CREDIT UNION.— 

17 ‘‘(I) IN GENERAL.—Subject to 

18 subclause (II), the appropriate super19 visor of the State in which the credit 

20 union is chartered has determined 

21 that the credit union meets all the eli22 gibility requirements under section 

23 201(a) of the Federal Credit Union 

24 Act (12 U.S.C. 1781(a)) to apply for 

25 insurance of its member accounts as 


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1 of the date of the application for 

2 membership. 

3 ‘‘(II) CERTIFICATION DEEMED

4 VALID.—In the case of any credit 

5 union to which subclause (I) applies, 

6 if the appropriate supervisor of the 

7 State in which such credit union is 

8 chartered fails to make the determina9 tion required pursuant to such sub10 clause by the end of the 12-month pe11 riod beginning on the date on which 

12 the application is submitted to the su13 pervisor, the credit union shall be 

14 deemed to have met the requirements 

15 of subclause (I). 

16 ‘‘(ii) DETERMINATION BY STATE SU17 PERVISOR OF THE PRIVATE DEPOSIT IN18 SURER.—The licensing entity of the pri19 vate deposit insurer that is insuring the 

20 member accounts of the credit union— 

21 ‘‘(I) receives, on an annual basis, 

22 an independent actuarial opinion that 

23 the private insurer has set aside suffi24 cient reserves for losses; and 


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1 ‘‘(II) obtains, as frequently as 

2 appropriate, but not less frequently 

3 than every 36 months, an independent 

4 actuary’s study of the capital ade5 quacy of the private insurer. 

6 ‘‘(iii) SUBMISSION OF FINANCIAL IN7 FORMATION.—The credit union or the ap8 propriate supervisor of the State in which 

9 such credit union is chartered makes avail10 able, and continues to make available for 

11 such time as the credit union is a member 

12 of a Federal home loan bank, to the Fed13 eral Housing Finance Agency or to the 

14 Federal home loan bank all reports, 

15 records, and other information related to 

16 any examinations or inquiries performed 

17 by the supervisor concerning the financial 

18 condition of the credit union, as soon as is 

19 practicable. 

20 ‘‘(C) SECURITY INTERESTS OF FEDERAL

21 HOME LOAN BANK NOT AVOIDABLE.—Notwith22 standing any provision of State law authorizing 

23 a conservator or liquidating agent of a credit 

24 union to repudiate contracts, no such provision 

25 shall apply with respect to— 


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1 ‘‘(i) any extension of credit from any 

2 Federal home loan bank to any credit 

3 union that is a member of any such bank 

4 pursuant to this paragraph; or 

5 ‘‘(ii) any security interest in the as6 sets of such a credit union securing any 

7 such extension of credit. 

8 ‘‘(D) PROTECTION FOR CERTAIN FEDERAL

9 HOME LOAN BANK ADVANCES.—Notwith10 standing any State law to the contrary, if a 

11 Bank makes an advance under section 10 to a 

12 State-chartered credit union that is not feder13 ally insured— 

14 ‘‘(i) the Bank’s interest in any collat15 eral securing the advance has the same 

16 priority and is afforded the same standing 

17 and rights that the security interest would 

18 have had if the advance had been made to 

19 a federally insured credit union; and 

20 ‘‘(ii) the Bank has the same right to 

21 access such collateral that the Bank would 

22 have had if the advance had been made to 

23 a federally insured credit union.’’. 

24 (b) COPIES OF AUDITS OF PRIVATE INSURERS OF

25 CERTAIN DEPOSITORY INSTITUTIONS REQUIRED TO BE


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1 PROVIDED TO SUPERVISORY AGENCIES.—Section 

2 43(a)(2)(A) of the Federal Deposit Insurance Act (12 

3 U.S.C. 1831t(a)(2)(A)) is amended— 

4 (1) in clause (i), by striking ‘‘and’’ at the end; 

5 (2) in clause (ii), by striking the period at the 

6 end and inserting a semicolon; and 

7 (3) by inserting at the end the following: 

8 ‘‘(iii) in the case of depository institu9 tions described in subsection (e)(2)(A), the 

10 member accounts of which are insured by 

11 the private deposit insurer, which are 

12 members of a Federal home loan bank, to 

13 the Federal Housing Finance Agency, not 

14 later than 7 days after the audit is com15 pleted.’’. 

16 (c) GAO REPORT.—Not later than 18 months after 

17 the date of enactment of this Act, the Comptroller General 

18 of the United States shall conduct a study and submit a 

19 report to Congress— 

20 (1) on the adequacy of insurance reserves held 

21 by a private deposit insurer that insures the member 

22 accounts of an entity described in section 

23 43(e)(2)(A) of the Federal Deposit Insurance Act 

24 (12 U.S.C. 1831t(e)(2)(A)); and 


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1 (2) for an entity described in paragraph (1), 

2 the member accounts of which are insured by a pri3 vate deposit insurer, information on the level of com4 pliance with Federal regulations relating to the dis5 closure of a lack of Federal deposit insurance. 

Æ 


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