A bill to amend the Federal Home Loan Bank Act with respect to membership eligibility of certain institutions.

To amend the Federal Home Loan Bank Act with respect to membership eligibility of certain institutions. 1. Privately insured credit unions authorized to become members of a Federal home loan bank (a) In general Section 4(a) of the Federal Home Loan Bank Act ( 12 U.S.C. 1424(a) (5) Certain privately insured credit unions (A) In general Subject to the requirements of subparagraph (B), a credit union that lacks insurance of its member accounts under Federal law shall be treated as an insured depository institution for purposes of this Act. (B) Certification by appropriate State supervisor For purposes of this paragraph, a credit union that lacks insurance of its member accounts under Federal law and that has applied for membership in a Federal home loan bank shall be treated as an insured depository institution if the following has occurred: (i) Determination by State supervisor of the credit union (I) In general Subject to subclause (II), the appropriate supervisor of the State in which the credit union is chartered has determined that the credit union meets all the eligibility requirements under section 201(a) of the Federal Credit Union Act ( 12 U.S.C. 1781(a) (II) Certification deemed valid In the case of any credit union to which subclause (I) applies, if the appropriate supervisor of the State in which such credit union is chartered fails to make the determination required pursuant to such subclause by the end of the 12-month period beginning on the date on which the application is submitted to the supervisor, the credit union shall be deemed to have met the requirements of subclause (I). (ii) Determination by State supervisor of the private deposit insurer The licensing entity of the private deposit insurer that is insuring the member accounts of the credit union— (I) receives, on an annual basis, an independent actuarial opinion that the private insurer has set aside sufficient reserves for losses; and (II) obtains, as frequently as appropriate, but not less frequently than every 36 months, an independent actuary’s study of the capital adequacy of the private insurer. (iii) Submission of financial information The credit union or the appropriate supervisor of the State in which such credit union is chartered makes available, and continues to make available for such time as the credit union is a member of a Federal home loan bank, to the Federal Housing Finance Agency or to the Federal home loan bank all reports, records, and other information related to any examinations or inquiries performed by the supervisor concerning the financial condition of the credit union, as soon as is practicable. (C) Security interests of federal home loan bank not avoidable Notwithstanding any provision of State law authorizing a conservator or liquidating agent of a credit union to repudiate contracts, no such provision shall apply with respect to— (i) any extension of credit from any Federal home loan bank to any credit union that is a member of any such bank pursuant to this paragraph; or (ii) any security interest in the assets of such a credit union securing any such extension of credit. (D) Protection for certain Federal home loan bank advances Notwithstanding any State law to the contrary, if a Bank makes an advance under section 10 to a State-chartered credit union that is not federally insured— (i) the Bank’s interest in any collateral securing the advance has the same priority and is afforded the same standing and rights that the security interest would have had if the advance had been made to a federally insured credit union; and (ii) the Bank has the same right to access such collateral that the Bank would have had if the advance had been made to a federally insured credit union. . (b) Copies of audits of private insurers of certain depository institutions required To be provided to supervisory agencies Section 43(a)(2)(A) of the Federal Deposit Insurance Act ( 12 U.S.C. 1831t(a)(2)(A) (1) in clause (i), by striking and (2) in clause (ii), by striking the period at the end and inserting a semicolon; and (3) by inserting at the end the following: (iii) in the case of depository institutions described in subsection (e)(2)(A), the member accounts of which are insured by the private deposit insurer, which are members of a Federal home loan bank, to the Federal Housing Finance Agency, not later than 7 days after the audit is completed. . (c) GAO Report Not later than 18 months after the date of enactment of this Act, the Comptroller General of the United States shall conduct a study and submit a report to Congress— (1) on the adequacy of insurance reserves held by a private deposit insurer that insures the member accounts of an entity described in section 43(e)(2)(A) of the Federal Deposit Insurance Act ( 12 U.S.C. 1831t(e)(2)(A) (2) for an entity described in paragraph (1), the member accounts of which are insured by a private deposit insurer, information on the level of compliance with Federal regulations relating to the disclosure of a lack of Federal deposit insurance.

Summary: Amends the Federal Home Loan Bank Act to treat certain privately (but not federally) insured credit unions as insured depository institutions for purposes of determining eligibility for membership in a federal home loan bank. Permits a credit union which lacks federal deposit insurance and has applied for membership in a federal home loan bank to be treated as meeting all the eligibility requirements for federal deposit insurance if specified conditions are met, including: (1) that the supervisor of the chartering state has determined that the credit union meets all federal deposit insurance eligibility requirements; (2) the state supervisor of the credit union's private deposit insurer receives annual independent actuarial opinions that the private insurer has sufficient reserves for losses, as well as periodic actuarial studies of the insurer's capital adequacy; and (3) the credit union's financial information is made available to the Federal Housing Finance Agency (FHFA) or to the federal home loan bank. Deems such a credit union to have met the eligibility criteria for federal home loan bank membership if, 12 months after its application date, the state supervisor has failed to act upon the application. Prohibits the application of a state law authorizing a conservator or liquidating agent of a credit union to repudiate contracts to any: (1) extension of credit from a federal home loan bank to a credit union which is a member of that bank, or (2) security interest in the assets of the credit union securing such extension of credit. Declares that if a federal home loan bank makes an advance to a state-chartered credit union that is not federally insured: (i) the bank's interest in any collateral securing such advance has the same priority and is afforded the same standing and rights that the security interest would have had if the advance had been made to a federally-insured credit union, and (2) the bank has the same right to access such collateral that it would have had if the advance had been made to a federally-insured credit union. Amends the Federal Deposit Insurance Act to require private deposit insurers of credit unions that are members of a federal home loan bank to submit copies of their audit reports within seven days to the FHFA. Directs the Government Accountability Office to study: (1) the adequacy of insurance reserves held by a private deposit insurer that insures deposits in an insured credit union or any credit union eligible to apply to become one, and (2) such credit unions' compliance with federal regulations governing disclosure of a lack of federal deposit insurance.