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shareholder’s
stock
purchase
requirements
through the purchase of any combination of
Class A or Class B stock.
‘‘(B) CLASS A STOCK.—Class A stock shall
be stock of a Federal home loan bank that shall
be redeemed in cash and at par by the bank no
later than 12 months following submission of a
written notice by a shareholder of the share-
holder’s intention to divest all shares of stock in
the bank.
‘‘(C) CLASS B STOCK.—Class B stock shall
be stock of a Federal home loan bank that shall
be redeemed in cash and at par by the bank no
later than 5 years following submission of a
written notice by a shareholder of the share-
holder’s intention to divest all shares of stock in
the bank.
‘‘(D) RIGHTS REQUIREMENT.—The Class
B stock of a Federal home loan bank may re-
ceive a dividend premium over that paid on
Class A stock, and may have preferential voting
rights in the election of Federal home loan bank
directors.
‘‘(E) LOWER STOCK PURCHASE REQUIRE-
MENTS FOR CLASS B STOCK.—A capital struc-
143
ture plan may provide for lower stock purchase
requirements with respect to those sharehold-
er’s that elect to purchase Class B stock in a
manner that is consistent with meeting the
bank’s own minimum capital requirements as
established by the Finance Board.
‘‘(F) NO OTHER CLASSES OF STOCK PER-
MITTED.—No class of stock other than the
Class A and Class B stock described in sub-
paragraphs (B) and (C) may be issued by a
Federal home loan bank.
‘‘(5) LIMITED TRANSFERABILITY OF STOCK.—
Each capital structure plan shall provide that any
equity securities issued by the bank shall be avail-
able only to, held only by, and tradable only among
shareholders of the bank.
‘‘(c) CAPITAL STANDARDS.—
‘‘(1) IN GENERAL.—The Finance Board shall
prescribe, by regulation, uniform capital standards
applicable to each Federal home loan bank which
shall include—
‘‘(A) a leverage limit in accordance with
paragraph (2); and
‘‘(B) a risk-based capital requirement in
accordance with paragraph (3).
144
‘‘(2) MINIMUM LEVERAGE LIMIT.—The leverage
limit established by the Finance Board shall require
each Federal home loan bank to maintain total cap-
ital in an amount not less than 5 percent of the total
assets of the bank. In determining compliance with
the minimum leverage ratio, the amount of retained
earnings and the paid-in value of Class B stock, if
any, shall be multiplied by 1.5 and such higher
amount shall be deemed to be capital for purposes
of meeting the 5 percent minimum leverage ratio.
‘‘(3)
RISK-BASED
CAPITAL
STANDARD.—The
risk-based capital requirement shall be composed of
the following components:
‘‘(A) Capital sufficient to meet the credit
risk to which a Federal home loan bank is sub-
ject, based on an amount which is not less than
the amount of tier 1, risk-based capital required
by regulations prescribed, or guidelines issued
under section 38 of the Federal Deposit Insur-
ance Act for a well capitalized insured deposi-
tory institution.
‘‘(B) Capital sufficient to meet the interest
rate risk to which a Federal home loan bank is
subject, based on an interest rate stress test ap-
plied by the Finance Board that rigorously tests
145
for changes in interest rates, rate volatility, and
changes in the shape of the yield curve.
‘‘(d) REDEMPTION OF CAPITAL.—
‘‘(1) IN GENERAL.—Any shareholder of a Fed-
eral home loan bank shall have the right to withdraw
the shareholder’s membership from a Federal home
loan bank and to redeem the shareholder’s stock in
accordance with the redemption rights associated
with the class of stock the shareholder holds, if—
‘‘(A) such shareholder has filed a written
notice of an intention to redeem all such shares;
and
‘‘(B) the shareholder has no outstanding
advances from any Federal home loan bank at
the time of such redemption.
‘‘(2)
PARTIAL
REDEMPTION.—A
shareholder
who files notice of intention to redeem all shares of
stock in a Federal home loan bank may redeem not
more than 1/2 of all such shares, in cash and at par,
6 months before the date by which the bank is re-
quired to redeem such stock pursuant to subpara-
graph (B) or (C) of subsection (b)(4).
‘‘(3) DIVESTITURE.—The board of directors of
any Federal home loan bank may, after a hearing,
146
order the divestiture by any shareholder of all own-
ership interests of such shareholder in the bank, if—
‘‘(A) in the opinion of the board of direc-
tors, such shareholder has failed to comply with
a provision of this Act or any regulation pre-
scribed under this Act; or
‘‘(B) the shareholder has been determined
to be insolvent, or otherwise subject to the ap-
pointment of a conservator, receiver, or other
legal custodian, by a State or Federal authority
with regulatory and supervisory responsibility
for such shareholder.
‘‘(4) RETIREMENT
OF
EXCESS
STOCK.—Any
shareholder may—
‘‘(A) retire shares of Class A stock or, at
the option of the shareholder, shares of Class B
stock, or any combination of Class A and Class
B stock, that are excess to the minimum stock
purchase requirements applicable to the share-
holder; and
‘‘(B) receive from the Federal home loan
bank a prompt payment in cash equal to the
par value of such stock.
‘‘(5) IMPAIRMENT OF CAPITAL.—If the Finance
Board or the board of directors of a Federal home