Housing Opportunity Mortgage Expansion Act

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. Short title This Act may be cited as the Housing Opportunity Mortgage Expansion Act 2. Membership eligibility of certain captive insurance companies (a) In general The Federal Home Loan Bank Act ( 12 U.S.C. 1422 (1) in section 4 ( 12 U.S.C. 1424 (d) Membership eligibility of certain captive insurance companies (1) Definitions In this subsection— (A) the terms affiliate long-term residential mortgage loan (B) the term covered captive insurance company (i) the primary insurance business of which is, or was on January 19, 2016, the insurance of an affiliate; (ii) that was admitted to membership of a Federal Home Loan Bank before January 19, 2016; and (iii) that, due solely to the change in the treatment of captive insurance companies in the final rule of the Agency entitled Members of Federal Home Loan Banks (I) was required to terminate membership in the Federal Home Loan Bank; or (II) will have membership in the Federal Home Loan Bank terminated. (2) Continuation or restoration of membership A covered captive insurance company may continue membership or have membership restored in the same Federal Home Loan Bank described in paragraph (1)(B)(ii) if— (A) the Federal Home Loan Bank determines, including based on information submitted by the covered captive insurance company, that— (i) the affiliate insured by the covered captive insurance company makes, owns, or acquires long-term residential mortgage loans; and (ii) the covered captive insurance company will comply with the membership eligibility requirements described in subsections (a), (b), and (c) of section 1263.6 of title 12, Code of Federal Regulations, upon restoring membership; and (B) the covered captive insurance company continues to be owned, or upon restoration of membership is owned and continues to be owned, including direct ownership by a controlling entity or indirect ownership through one or more holding companies, by the same entity that owned the covered captive insurance company on the date of enactment of this subsection. (3) Benefits (A) In general A covered captive insurance company for which membership in a Federal Home Loan Bank is continued or restored under paragraph (2) shall have the same benefits of membership in the Federal Home Loan Bank as the covered captive insurance company had before January 19, 2016. (B) Application of regulation Section 1263.6(e) of title 12, Code of Federal Regulations, or any successor thereto, shall not apply to a covered captive insurance company for which membership in a Federal Home Loan Bank is continued or restored under paragraph (2). (C) Captives treated as insurance companies Except as otherwise specifically provided for in this Act, for purposes of this Act and any regulations promulgated under this Act, a covered captive insurance company shall be treated as an insurance company. (4) Limitation on advances With respect to a covered captive insurance company for which membership in a Federal Home Loan Bank is continued or restored under paragraph (2) and that is not an affiliate of a depository financial institution, the Federal Home Loan Bank may not make any advances to the covered captive insurance company in an amount that, in the aggregate, is greater than 50 percent of the total assets of the covered captive insurance company unless the Federal Home Loan Bank has received from the affiliate of the covered captive insurance company or the controlling entity described in paragraph (2)(B) a guarantee of payment for any outstanding advances, which shall be in addition to any collateral otherwise required to secure the advances. ; and (2) in section 6(g) ( 12 U.S.C. 1426(g) (A) in paragraph (1), by striking paragraph (2) paragraphs (2) and (3) (B) by adding at the end the following: (3) Exception for certain captive insurance companies A covered captive insurance company (as defined in section 4(d)(1)) for which membership in a Federal Home Loan Bank is restored under section 4(d)(2)— (A) shall not be subject to the 5-year period described in paragraph (1); and (B) may acquire shares of the Federal Home Loan Bank beginning after the membership is restored. .

Summary: Housing Opportunity Mortgage Expansion Act This bill amends the Federal Home Loan Bank Act to allow the continuation or restoration of Federal Home Loan Bank (FHLB) membership for captive insurance companies that became members prior to finalization of a specified Federal Housing Finance Agency rule ending their FHLB membership. (A captive insurance company underwrites insurance for its parent company and does not provide insurance to the public.)