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) intro-
duced the following bill; which was referred to the Committee on Bank-
ing, Finance and Urban Affairs
A BILL
To modernize and improve the Federal home loan bank sys-
tem in order to enhance the availability of housing fi-
nance, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Federal Home Loan
Bank Modernization Act of 1993’’.
SEC. 2. EQUAL ACCESS AND UNIFORM MEMBERSHIP RE-
QUIREMENTS.
(a) SYSTEMWIDE VOLUNTARY MEMBERSHIP.—
(1) IN GENERAL.—Section 4(a) of the Federal
Home Loan Bank Act (12 U.S.C. 1424(a)) is
amended by adding at the end the following new
paragraph:
‘‘(2) VOLUNTARY
MEMBERSHIP.—Except as
provided in section 6(e) of the Federal Home Loan
Bank Act (12 USC 1426(e)), no member of a Fed-
eral home loan bank may be required to remain a
member of any such bank by any agency, depart-
ment or independent establishment of the United
States.’’.
(2) VOLUNTARY EXITS FROM SYSTEM.—The 1st
sentence of section 6(e) of the Federal Home Loan
Bank Act (12 U.S.C. 1426(e)) is amended by strik-
ing ‘‘other than a Federal savings and loan associa-
tion’’.
(b) AMENDMENTS RELATING TO STOCK PURCHASE
REQUIREMENTS AND OTHER SPECIAL RESTRICTIONS.—
(1) REPEAL
OF
STOCK
PURCHASE
REQUIRE-
MENTS AND 30 PERCENT LENDING CAP.—Section 10
of the Federal Home Loan Bank Act (12 U.S.C.
1430) is amended by striking subsection (e).
(2) SUBSTITUTION
OF
REQUIREMENT
BASED
ON TOTAL ASSETS.—Section 6(b)(1) of the Federal
Home Loan Bank Act (12 U.S.C. 1426(b)(1)) is
amended by striking ‘‘1 per centum of the subscrib-
er’s aggregate unpaid loan principal’’ and inserting
‘‘0.3 percent of the subscriber’s total assets’’.
(3) ELIGIBILITY OF NON-QTL SAVINGS ASSOCIA-
TIONS
TO
OBTAIN
NEW
ADVANCES.—Section
10(m)(3)(B)(i) of the Home Owners’ Loan Act (12
U.S.C. 1467a(m)(3)(B)(i)) is amended by striking
subclause (III).
(4) ELIGIBILITY REQUIREMENT RELATING TO
MORTGAGE-RELATED
ASSETS.—Section 4(a)(2)(A)
of the Federal Home Loan Bank Act (12 U.S.C.
1424(a)(2)(A)) is amended by striking ‘‘residential
mortgage loans’’ and inserting ‘‘mortgage-related as-
sets’’.
(c) REDUCTION
OF PERIOD REQUIRED BEFORE
WITHDRAWN MEMBER MAY RESUME MEMBERSHIP.—
Section 6(h) of the Federal Home Loan Bank Act (12
U.S.C. 1426(h)) is amended by striking ‘‘10’’ and insert-
ing ‘‘5’’.
SEC. 3. MODIFICATION OF ANNUAL CONTRIBUTION TO THE
RESOLUTION FUNDING CORPORATION.
(a) OBLIGATIONS OF THE FEDERAL HOME LOAN
BANKS.—Section 21B of the Federal Home Loan Bank
Act (12 U.S.C. 1441b) is amended—
(1) in subsection (e)(3)(C)—
(A) in clause (i), by striking ‘‘is less than
$300,000,000 per year’’ and inserting ‘‘for any
year is less than the amount which is equal to
the lesser of 20 percent of the aggregate net
earnings of such banks for such year or
$300,000,000’’; and
(B) in clause (ii), by striking ‘‘is more
than $300,000,000 per year’’ and inserting ‘‘for
any year is more than the amount which is
equal to the lesser of 20 percent of the aggre-
gate net earnings of such banks for such year
or $300,000,000’’; and
(2) in subsection (f)(2)(C)—
(A) by striking ‘‘the aggregate amount of
$300,000,000’’ and inserting ‘‘the amount
which is equal to the lesser of 20 percent of the
aggregate net earnings of such banks for such
year or $300,000,000’’; and
(B) by striking ‘‘as follows:’’ and all that
follows and inserting ‘‘by requiring each such
bank to pay an equal percentage of the net
earnings of the bank for the year for which
such payment is so required, up to a maximum
of 20 percent of the net earnings of the bank.’’;
(b) BACKUP FOR REDUCTION IN PAYMENTS DUE TO
PARAGRAPH (1) AMENDMENTS.—Section 21B(f)(2) of the
Federal Home Loan Bank Act (12 U.S.C. 1441b(f)(2))
is amended—
(1) by redesignating subparagraphs (D) and
(E) as subparagraphs (E) and (F), respectively; and
(2) by inserting after subparagraph (C) the fol-
lowing:
‘‘(D) BACKUP
ASSESSMENT
AUTHORITY
FOR
CERTAIN
SUBPARAGRAPH
(C)
REDUC-
TIONS.—
‘‘(i) IN GENERAL.—To the extent the
amounts available pursuant to subpara-
graphs (A), (B), and (C) are insufficient to
cover the amount of interest payments for
any year, the Federal Housing Finance
Board shall impose an assessment on each
assessable institution at a rate determined
by such Board to be necessary for such
Board to collect an amount equal to the
amount of the deficiency.
‘‘(ii) 
MAXIMUM
AMOUNT
LIMITA-
TION.—The aggregate amount of assess-
ments imposed under clause (i) for any
year may not exceed the amount by which
$300,000,000 exceeds 20 percent of the
aggregate net earnings of the Federal
home loan banks for such year.
‘‘(iii) APPLIED
TO
INTEREST
PAY-
MENTS.—The amount received by the Fed-
eral Housing Finance Board from assess-
ments imposed under this subparagraph
shall be transferred to the Funding Cor-
poration to make such interest payments.
‘‘(iv) PROCEDURES TO ENSURE TIME-
LY PAYMENTS.—For purposes of carrying
out this paragraph, the Federal Housing
Finance Board shall establish such proce-
dures for imposing and collecting any as-
sessment under this subparagraph for any
year as such Board determines are nec-
essary to ensure that the payment under
clause (iii) will be made no later than the
date by which any payment by the Federal
home loan banks under subparagraph (C)
is due for such year.
‘‘(v) ASSESSABLE
INSTITUTION
DE-
FINED.—For purposes of this subpara-
graph, the term ‘assessable institution’
means—
‘‘(I) any depository institution
(as defined in section 3 of the Federal
Deposit Insurance Act) which, at any
time on or after January 1, 1993, has
been a Savings Association Insurance
Fund member (as defined in section
7(l)(5) of the Federal Deposit Insur-
ance Act) and, at the same time, has
been a member of any Federal home
loan bank; and
‘‘(II) any depository institution
(as defined in section 3 of the Federal
Deposit Insurance Act) which ac-
quires 
(as 
defined 
in 
section
13(f)(8)(B) of such Act), or which re-
sults from the merger or consolidation
of any depository institution with, any
depository institution described in
subclause (I).’’.
(c) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) Section 21B(f)(2) of the Federal Home Loan Bank
Act (12 U.S.C. 1441b(f)(2)) is amended—
(A) in subparagraph (E) (as so redesignated by
subsection (b)(1) of this section), by striking ‘‘(B),
and (C)’’ and inserting ‘‘(B), (C), and (D)’’; and
(B) in subparagraph (F)(i) (as so redesignated
by subsection (b)(1) of this section), by striking
‘‘(C), and (D)’’ and inserting ‘‘(C), (D), and (E)’’.
(2) Section 6(b)(3) of the Federal Home Loan
Bank Act (12 U.S.C. 1426(b)(3)) is amended by
striking ‘‘Except as provided in Subsection (i)’’ and
inserting ‘‘Except as provided in subsection (e)’’.
(3) Section 6(b)(4) of the Federal Home Loan
Bank Act (12 U.S.C. 1426(b)(4)) is deleted and sec-
tion 6(b)(5) is redesignated as Section 6(b)(4).
SEC. 4. STUDY OF FEASIBILITY OF CREATING A CLASS OF
AFFILIATE MEMBERSHIP OF THE FEDERAL
HOME LOAN BANKS FOR MORTGAGE BANK-
ERS AND STATE HOUSING AUTHORITIES; RE-
PORT TO THE CONGRESS.
(a) STUDY.—The Federal Housing Finance Board
shall study the feasibility of creating a class of affiliate
members of the Federal home loan banks for institutions
that make long-term home mortgage loans, and the desir-
ability of applying requirements to such members that dif-
fer from the requirements currently applicable to the
members of the Federal home loan banks in the areas of—
(1) the ability to obtain loans from the Federal
home loan banks,
(2) the rate of interest to be charged on such
loans,
(3) the collateral required for such loans,
(4) restrictions on use of such loans, and
(5) the stock of the Federal home loan banks
required to be purchased.
(b) REPORT.—Not later than December 31, 1993,
the Federal Housing Finance Board shall submit to the
Congress a report that contains the findings of the study
required by subsection (a).
SEC. 5. EFFECTIVE DATE.
The amendments made by sections 2 and 3 shall take
effect at the end of the 6-month period beginning on the
date of the enactment of this Act.
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