299 
(4) examine how taxpayers would be impacted 
by each alternative system, including the complete 
privatization of the Federal National Mortgage Asso-
ciation and the Federal Home Loan Mortgage Cor-
poration. 
(c) REPORT.—The Director of the Federal Housing Fi-
nance Agency shall submit a report to the Congress on the 
study not later than the expiration of the 24-month period 
beginning on the effective date under section 185. 
TITLE II—FEDERAL HOME LOAN 
BANKS 
SEC. 201. DEFINITIONS. 
Section 2 of the Federal Home Loan Bank Act (12 
U.S.C. 1422) is amended— 
(1) by striking paragraphs (1), (10), and (11); 
(2) by redesignating paragraphs (2) through (9) 
as paragraphs (1) through (8), respectively; 
(3) by redesignating paragraphs (12) and (13) 
as paragraphs (9) and (10), respectively; and 
(4) by adding at the end the following: 
‘‘(11) DIRECTOR.—The term ‘Director’ means 
the Director of the Federal Housing Finance Agency. 
‘‘(12) AGENCY.—The term ‘Agency’ means the 
Federal Housing Finance Agency.’’. 
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300 
SEC. 202. DIRECTORS. 
(a) ELECTION.—Section 7 of the Federal Home Loan 
Bank Act (12 U.S.C. 1427) is amended— 
(1) by striking subsection (a) and inserting the 
following: 
‘‘(a) NUMBER; ELECTION; QUALIFICATIONS; CON-
FLICTS OF INTEREST.— 
‘‘(1) IN
GENERAL.—The management of each 
Federal Home Loan Bank shall be vested in a board 
of 13 directors, or such other number as the Director 
determines appropriate, each of whom shall be a cit-
izen of the United States. All directors of a Bank who 
are not independent directors pursuant to paragraph 
(3) shall be elected by the members. 
‘‘(2) MEMBER DIRECTORS.—A majority of the 
directors of each Bank shall be officers or directors of 
a member of such Bank that is located in the district 
in which such Bank is located. 
‘‘(3) INDEPENDENT DIRECTORS.—At least two- 
fifths of the directors of each Bank shall be inde-
pendent directors, who shall be appointed by the Di-
rector of the Federal Housing Finance Agency from 
a list of individuals recommended by the Federal 
Housing Enterprise Board, and shall meet the fol-
lowing criteria: 
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‘‘(A) IN GENERAL.—Each independent di-
rector shall be a bona fide resident of the district 
in which such Bank is located. 
‘‘(B) PUBLIC
INTEREST
DIRECTORS.—At 
least 2 of the independent directors under this 
paragraph of each Bank shall be representatives 
chosen from organizations with more than a 2- 
year history of representing consumer or commu-
nity interests on banking services, credit needs, 
housing, community development, economic de-
velopment, or financial consumer protections. 
‘‘(C) OTHER DIRECTORS.— 
‘‘(i) 
QUALIFICATIONS.—Each 
inde-
pendent director that is not a public inter-
est director under subparagraph (B) shall 
have demonstrated knowledge of, or experi-
ence in, financial management, auditing 
and accounting, risk management practices, 
derivatives, project development, or organi-
zational management, or such other knowl-
edge or expertise as the Director may pro-
vide by regulation. 
‘‘(ii) CONSULTATION WITH BANKS.—In 
appointing other directors to serve on the 
board of a Federal home loan bank, the Di-
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