12 USC 1424 - Eligibility for membership

U.S Code last checked for updates: May 06, 2024

§ 1424.

Eligibility for membership

(a)

Criteria for eligibility

(1)

In general

Any building and loan association, savings and loan association, cooperative bank, homestead association, insurance company, savings bank, community development financial institution, or any insured depository institution (as defined in section 1422 of this title), shall be eligible to become a member of a Federal Home Loan Bank if such institution—

(A)

is duly organized under the laws of any State or of the United States;

(B)

is subject to inspection and regulation under the banking laws, or under similar laws, of the State or of the United States or, in the case of a community development financial institution, is certified as a community development financial institution under the Community Development Banking and Financial Institutions Act of 1994 [12 U.S.C. 4701 et seq.].; 1

 So in original.

and

(C)

makes such home mortgage loans as, in the judgment of the Director, are long-term loans (except that in the case of a savings bank, this subparagraph applies only if, in the judgment of the Director, its time deposits, as defined in section 461 of this title, warrant its making such loans).

(2)

Qualified thrift lender

An insured depository institution that is not a member on January 1, 1989, may become a member of a Federal Home Loan Bank only if—

(A)

the insured depository institution (other than a community financial institution) has at least 10 percent of its total assets in residential mortgage loans;

(B)

the insured depository institution’s financial condition is such that advances may be safely made to such institution; and

(C)

the character of its management and its home-financing policy are consistent with sound and economical home financing.

(3)

Certain institutions

(4)

Limited exemption for community financial institutions

(5)

Certain privately insured credit unions

(A)

In general

(B)

Certification by appropriate supervisor

(i)

In general

(ii)

Certification deemed valid

(C)

Notwithstanding any provision of State law authorizing a conservator or liquidating agent of a credit union to repudiate contracts, no such provision shall apply with respect to—

(i)

any extension of credit from any Federal home loan bank to any credit union which is a member of any such bank pursuant to this paragraph; or

(ii)

any security interest in the assets of such credit union securing any such extension of credit.

(D)

Protection for certain Federal home loan bank advances

Notwithstanding any State law to the contrary, if a Bank makes an advance under section 1430 of this title to a State-chartered credit union that is not federally insured—

(i)

the Bank’s interest in any collateral securing such advance has the same priority and is afforded the same standing and rights that the security interest would have had if the advance had been made to a federally insured credit union; and

(ii)

the Bank has the same right to access such collateral that the Bank would have had if the advance had been made to a federally insured credit union.

(b)

Location requirement

(c)

Inspection and regulation requirements

(July 22, 1932, ch. 522, § 4, 47 Stat. 726; June 13, 1933, ch. 64, § 3, 48 Stat. 129; Pub. L. 101–73, title VII, §§ 701(b)(1), (3)(A), 704(a), 710(b)(1), Aug. 9, 1989, 103 Stat. 412, 415, 418; Pub. L. 106–102, title VI, § 605, Nov. 12, 1999, 113 Stat. 1452; Pub. L. 110–289, div. A, title II, §§ 1204(8), 1206, July 30, 2008, 122 Stat. 2786, 2787; Pub. L. 114–94, div. G, title LXXXII, § 82001(a), Dec. 4, 2015, 129 Stat. 1795.)

cite as: 12 USC 1424