Financing Corporation

Notwithstanding any other provision of law, the Director shall charter a corporation to be known as the Financing Corporation. The Financing Corporation shall be under the management of a directorate composed of 3 members as follows: Each member appointed under paragraph (1)(B) shall be appointed for a term of 1 year. If any member leaves the office in which such member was serving when appointed to the Directorate— No president of a Federal Home Loan Bank may be appointed to serve an additional term on the Directorate until such time as the presidents of each of the other Federal Home Loan Banks have served as many terms on the Directorate as the president of such bank (before the appointment of such president to such additional term). The Director shall select the chairperson of the Directorate from among the 3 members of the Directorate. The Financing Corporation shall have no paid employees. The Directorate may, with the approval of the Director, authorize the officers, employees, or agents of the Federal Home Loan Banks to act for and on behalf of the Financing Corporation in such manner as may be necessary to carry out the functions of the Financing Corporation. All administrative expenses of the Financing Corporation shall be paid by the Federal Home Loan Banks. The amount each Federal Home Loan Bank shall pay shall be determined by the Director by multiplying the total administrative expenses for any period by the percentage arrived at by dividing— For purposes of this paragraph, the term “administrative expenses” does not include— The Directorate shall be subject to such regulations, orders, and directions as the Director may prescribe. Members of the Directorate shall receive no pay, allowances, or benefits from the Financing Corporation by reason of their service on the Directorate. The Financing Corporation shall have only the following powers, subject to the other provisions of this section and such regulations, orders, and directions as the Director may prescribe: Each Federal Home Loan Bank shall invest in nonvoting capital stock of the Financing Corporation at such times and in such amounts as the Director may prescribe under this subsection. Each share of stock issued by the Financing Corporation to a Federal Home Loan Bank shall have par value in an amount determined by the Director and shall be transferable only among the Federal Home Loan Banks in the manner and to the extent prescribed by the Director at not less than par value. The aggregate amount of funds invested by all Federal Home Loan Banks in nonvoting capital stock of the Financing Corporation shall not exceed $3,000,000,000. The cumulative amount of funds invested in nonvoting capital stock of the Financing Corporation by each Federal Home Loan Bank shall not exceed the aggregate amount of— the sum of— the sum of— Of the first $1,000,000,000 in the aggregate which the Thrift Depositor Protection Oversight Board pursuant to section 1441b of this title or the Director under this section (as the case may be) may require the Federal Home Loan Banks collectively to invest in the stock of the Funding Corporation or invest in the capital stock of the Financing Corporation, respectively, the amount which each Federal Home Loan Bank (or any successor to such Bank) shall invest shall be determined by the Thrift Depositor Protection Oversight Board or the Director (as the case may be) by multiplying the aggregate amount of such payment or investment by all Banks by the percentage appearing in the following table for each such Bank: BankPercentage Federal Home Loan Bank of Boston1.8629 Federal Home Loan Bank of New York9.1006 Federal Home Loan Bank of Pittsburgh4.2702 Federal Home Loan Bank of Atlanta14.4007 Federal Home Loan Bank of Cincinnati8.2653 Federal Home Loan Bank of Indianapolis5.2863 Federal Home Loan Bank of Chicago9.6886 Federal Home Loan Bank of Des Moines6.9301 Federal Home Loan Bank of Dallas8.8181 Federal Home Loan Bank of Topeka5.2706 Federal Home Loan Bank of San Francisco19.9644 Federal Home Loan Bank of Seattle6.1422 With respect to any amount in excess of the $1,000,000,000 amount referred to in paragraph (4) which the Director may require the Federal Home Loan Banks to invest in capital stock of the Financing Corporation under this subsection, the amount which each Federal Home Loan Bank (or any successor to such bank) shall invest shall be determined by the Director by multiplying such excess amount by the percentage arrived at by dividing— If the amount any Federal Home Loan Bank is required to invest in capital stock of the Financing Corporation pursuant to a determination by the Director under paragraph (5) (or under subparagraph (B) of this paragraph) exceeds the maximum investment amount applicable with respect to such bank under paragraph (3) at the time of such determination (hereinafter in this paragraph referred to as the “excess amount”)— The amount each remaining Federal Home Loan Bank shall be required to invest under subparagraph (A)(i) is the amount determined by the Director by multiplying the excess amount by the percentage arrived at by dividing— The bank on whose behalf an investment in capital stock is made under subparagraph (A)(i) shall purchase, annually and at the issuance price, from each remaining bank an amount of such stock determined by the Director by multiplying the amount available for such purchases (at the time of such determination) by the percentage determined under subparagraph (B) with respect to such remaining bank until the aggregate amount of such capital stock has been purchased by the bank. The amount of dividends which may be paid for any year by a bank on whose behalf an investment is made under subparagraph (A)(i) shall not exceed an amount equal to ½ of the net earnings of the bank for the year. Of the net earnings for any year of a bank on whose behalf an investment is made under subparagraph (A)(i), such amount as is necessary to make the purchases of stock required under subparagraph (A)(ii) shall be placed in a reserve account (established in such manner as the Director shall prescribe by regulations) the balance in which shall be available only for such purchases. For purposes of paragraph (3), the term “undivided profits” means retained earnings minus the sum of— Bank Dollar amount Federal Home Loan Bank of Boston $3.2 million Federal Home Loan Bank of New York 7.7 million Federal Home Loan Bank of Pittsburgh 5.2 million Federal Home Loan Bank of Atlanta 12.3 million Federal Home Loan Bank of Cincinnati 5.9 million Federal Home Loan Bank of Indianapolis 37.4 million Federal Home Loan Bank of Chicago 6.0 million Federal Home Loan Bank of Des Moines 32.7 million Federal Home Loan Bank of Dallas 45.0 million Federal Home Loan Bank of Topeka 13.7 million Federal Home Loan Bank of San Francisco 21.9 million Federal Home Loan Bank of Seattle 33.6 million The aggregate amount of obligations of the Financing Corporation which may be outstanding at any time (as determined by the Director) shall not exceed the lesser of— an amount equal to the greater of— No obligation of the Financing Corporation shall be issued after December 12, 1991. No obligation of the Financing Corporation may be issued which matures— Obligations issued under this section by the Financing Corporation with the approval of the Director shall be lawful investments, and may be accepted as security, for all fiduciary, trust, and public funds the investment or deposit of which shall be under the authority or control of the United States or any officer of the United States. All persons having the power to invest in, sell, underwrite, purchase for their own accounts, accept as security, or otherwise deal in obligations of the Federal Home Loan Banks shall also have the power to do so with respect to obligations of the Financing Corporation. Obligations of the Financing Corporation and the interest payable on such obligations shall not be obligations of, or guaranteed as to principal or interest by, the Federal Home Loan Banks, the United States, or the FSLIC Resolution Fund and the obligations shall so plainly state. Except as provided in subparagraph (B), obligations of the Financing Corporation shall be exempt from tax both as to principal and interest to the same extent as any obligation of a Federal Home Loan Bank is exempt from tax under section 1433 of this title. The Financing Corporation, like the Federal Home Loan Banks, shall be treated as an agency of the United States for purposes of the first sentence of section 3124(b) of title 31 (relating to determination of tax status of interest on obligations). Notwithstanding paragraph (7),11 So in original. Probably should refer to paragraph (6) in view of the renumbering of paragraph (7) as (6) by Pub. L. 101–73. obligations of the Financing Corporation shall be deemed to be exempt securities (within the meaning of laws administered by the Securities and Exchange Commission) to the same extent as securities which are direct obligations of the United States or are guaranteed as to principal or interest by the United States. The Chairperson of the Director 22 So in original. See 2008 Amendment note below. and the Directorate shall ensure that minority owned or controlled commercial banks, investment banking firms, underwriters, and bond counsels throughout the United States have an opportunity to participate to a significant degree in any public offering of obligations issued under this section. The Financing Corporation shall obtain funds for anticipated interest payments, issuance costs, and custodial fees on obligations issued hereunder from the following sources: The Financing Corporation assessments which were assessed on insured institutions pursuant to this section as in effect prior to August 9, 1989. In addition to the amounts obtained pursuant to paragraph (1), the Financing Corporation, with the approval of the Board 33 See 2008 Amendment note below. of Directors of the Federal Deposit Insurance Corporation, shall assess against each insured depository institution an assessment (in the same manner as assessments are assessed against such institutions by the Federal Deposit Insurance Corporation under section 1817 of this title). To the extent the amounts available pursuant to paragraphs (1) and (2) are insufficient to cover the amount of interest payments, issuance costs, and custodial fees, and if the funds are not required by the Resolution Funding Corporation to provide funds for the Funding Corporation Principal Fund under section 1441b of this title, the Federal Deposit Insurance Corporation shall transfer to the Financing Corporation, from the liquidating dividends and payments made on claims received by the FSLIC Resolution Fund (established under section 1821a of this title) from receiverships, the remaining amount of funds necessary for the Financing Corporation to make interest payments. Subject to such regulations, restrictions, and limitations as may be prescribed by the Director, assets of the Financing Corporation, which are not invested in capital certificates or capital stock issued by the Federal Savings and Loan Insurance Corporation under section 1725(b)(1)(A) of this title before August 9, 1989, and after August 9, 1989, in capital certificates issued by the FSLIC Resolution Fund, shall be invested in— The Financing Corporation shall invest in, and hold in a segregated account, noninterest bearing instruments— The aggregate amount invested by the Financing Corporation under paragraph (2) shall not exceed $2,200,000,000 (as determined on the basis of the purchase price). Notwithstanding the requirements of paragraph (1), the assets of the Financing Corporation referred to in paragraph (1) which are not invested under paragraph (2) may be used to pay— For purposes of this subsection— The term “issuance costs”— The term “custodian fee” means— Except as provided in subsection (e)(8)(B), the Financing Corporation shall be treated as a Federal Home Loan Bank for purposes of sections 1433 and 1443 of this title. The Federal Reserve banks are authorized to act as depositaries for or fiscal agents or custodians of the Financing Corporation. Notwithstanding the fact that no Government funds may be invested in the Financing Corporation, the Financing Corporation shall be treated, for purposes of sections 9105,44 See References in Text note below. 9107, and 9108 of title 31, as a mixed-ownership Government corporation which has capital of the Government. The Financing Corporation shall be dissolved, as soon as practicable, after the earlier of— Effective on the date of the dissolution of the Financing Corporation under paragraph (1), the Director may exercise, on behalf of the Financing Corporation, any power of the Financing Corporation which the Director determines to be necessary to settle and conclude the affairs of the Financing Corporation. The Director may prescribe such regulations as may be necessary to carry out the provisions of this section, including regulations defining terms used in this section. For purposes of this section, the following definitions shall apply: The term “Directorate” means the directorate established in the manner provided in subsection (b)(1) to manage the Financing Corporation. The term “net earnings” means net earnings without reduction for any chargeoffs or expenses incurred by a Bank in connection with the purchase of capital stock of the Financing Corporation or the purchase of stock of the Funding Corporation required by the Thrift Depositor Protection Oversight Board under subsections (e) and (f) of section 1441b of this title. The term “insured depository institution” has the same meaning as in section 1813 of this title 55 So in original. Probably should be followed by a period.