12 U.S.C. § 1441: Financing Corporation

Notwithstanding any other provision of law, the Director shall charter a corporation to be known as the Financing Corporation. The Director of the Office of Finance of the Federal Home Loan Banks (or the head of any successor to such office). 2 members selected by the Director from among the presidents of the Federal Home Loan Banks. Each member appointed under paragraph (1)(B) shall be appointed for a term of 1 year. such member’s service on the Directorate shall terminate on the date such member leaves such office; and the successor to the office of such member shall serve the remainder of such member’s term. 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 aggregate amount the Director required such bank to invest in the Financing Corporation (as of the time of such determination) under paragraphs (4) and (5) of subsection (d) (as computed without regard to paragraph (3) or (6) of such subsection); by the aggregate amount the Director required all Federal Home Loan Banks to invest (as of the time of such determination) under such paragraphs. issuance costs (as such term is defined in subsection (g)(5)(A)); any interest on (and any redemption premium with respect to) any obligation of the Financing Corporation; or custodian fees (as such term is defined in subsection (g)(5)(B)). 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. To issue nonvoting capital stock to the Federal Home Loan Banks. To invest in any security issued by the Federal Savings and Loan Insurance Corporation under section 1725(b) of this title prior to August 9, 1989 , and thereafter to transfer the proceeds of any obligation issued by the Financing Corporation to the FSLIC Resolution Fund. To issue debentures, bonds, or other obligations and to borrow, to give security for any amount borrowed, and to pay interest on (and any redemption premium with respect to) any such obligation or amount. To impose assessments in accordance with subsection (f). To adopt, alter, and use a corporate seal. To have succession until dissolved. To enter into contracts. To sue and be sued in its corporate capacity, and to complain and defend in any action brought by or against the Financing Corporation in any State or Federal court of competent jurisdiction. To exercise such incidental powers not inconsistent with the provisions of this section as are necessary or appropriate to carry out the provisions of this section. 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 reserves maintained by such bank on December 31, 1985 , pursuant to the requirement contained in the first 2 sentences of section 1436 of this title ; and the undivided profits (as defined in paragraph (7)) of such bank on such date; and the amounts added to reserves after December 31, 1985 , pursuant to the requirement contained in the first 2 sentences of section 1436 of this title ; and the undivided profits of such bank accruing after such date. 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: Bank Percentage Federal Home Loan Bank of Boston 1.8629 Federal Home Loan Bank of New York 9.1006 Federal Home Loan Bank of Pittsburgh 4.2702 Federal Home Loan Bank of Atlanta 14.4007 Federal Home Loan Bank of Cincinnati 8.2653 Federal Home Loan Bank of Indianapolis 5.2863 Federal Home Loan Bank of Chicago 9.6886 Federal Home Loan Bank of Des Moines 6.9301 Federal Home Loan Bank of Dallas 8.8181 Federal Home Loan Bank of Topeka 5.2706 Federal Home Loan Bank of San Francisco 19.9644 Federal Home Loan Bank of Seattle 6.1422 the sum of the total assets (as of the most recent December 31) held by all Savings Association Insurance Fund members which are members of such bank; by the sum of the total assets (as of such date) held by all Savings Association Insurance Fund members which are members of any Federal Home Loan Bank. the Director shall require each remaining Federal Home Loan Bank to invest (in addition to the amount determined under paragraph (5) for such remaining bank and subject to the maximum investment amount applicable with respect to such remaining bank under paragraph (3) at the time of such determination) in such capital stock on behalf of the bank in the amount determined under subparagraph (B); the Director shall require the bank to subsequently purchase the excess amount of capital stock from the remaining banks in the manner described in subparagraph (C); and the requirements contained in subparagraphs (D) and (E) relating to the use of net earnings shall apply to such bank until the bank has purchased all of the excess amount of capital stock. the amount of capital stock of the Financing Corporation held by such remaining bank at the time of such determination; by the aggregate amount of such stock held by all remaining banks at such time. 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. that portion required to be added to reserves maintained pursuant to the first two sentences of section 1436 of this title ; and the dollar amounts held by the respective Federal Home Loan Banks in special dividend stabilization reserves on December 31, 1985 , as determined under the following table: 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 5 times the amount of the nonvoting capital stock of the Financing Corporation which is outstanding at such time; or the sum of the face amounts (the amount of principal payable at maturity) of securities described in subsection (g)(2) which are held at such time in the segregated account established pursuant to such subsection; or $10,825,000,000. No obligation of the Financing Corporation shall be issued after December 12, 1991 . more than 30 years after the date of issue; or after December 31, 2026 . 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), 1 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. 1 So in original. Probably should refer to paragraph (6) in view of the renumbering of paragraph (7) as (6) by Pub. L. 101–73 . The Chairperson of the Director 2 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. 2 So in original. See 2008 Amendment note below. 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 3 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 3 See 2008 Amendment note below. 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. direct obligations of the United States; obligations, participations, or other instruments of, or issued by, the Federal National Mortgage Association or the Government National Mortgage Association; mortgages, obligations, or other securities for sale by, or which have been disposed of by, the Federal Home Loan Mortgage Corporation under section 1454 or 1455 of this title; or any other security in which it is lawful for fiduciary and trust funds to be invested under the laws of any State. which are securities described in paragraph (1); and the total of the face amounts (the amount of principal payable at maturity) of which is approximately equal to the aggregate amount of principal on the obligations of the Financing Corporation, 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). issuance costs; any interest on (and any redemption premium with respect to) any obligation of the Financing Corporation; and custodian fees. means issuance fees and commissions incurred by the Financing Corporation in connection with the issuance or servicing of any obligation of the Financing Corporation; and includes legal and accounting expenses, trustee and fiscal and paying agent charges, costs incurred in connection with preparing and printing offering materials, and advertising expenses, to the extent that any such cost or expense is incurred by the Financing Corporation in connection with issuing any obligation. any fee incurred by the Financing Corporation in connection with the transfer of any security to, or the maintenance of any security in, the segregated account established under paragraph (2); and any other expense incurred by the Financing Corporation in connection with the establishment or maintenance of such account. 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, 4 9107, and 9108 of title 31, as a mixed-ownership Government corporation which has capital of the Government. 4 See References in Text note below. the maturity and full payment of all obligations issued by the Financing Corporation pursuant to this section; or December 31, 2026 . 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. 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 5 5 So in original. Probably should be followed by a period. Subsections (a) [amending this section] and (c) [probably should be (b), amending section 1817 of this title ] and the amendments made by such subsections shall apply with respect to semiannual periods which begin after December 31, 1996 . December 31, 1999 ; or the date as of which the last savings association ceases to exist.” Effective as of the date of the enactment of this Act [ Sept. 30, 1996 ] and ending on the date provided in subsection (c)(2) of this section [set out as a note above], the Comptroller of the Currency, the Board of Directors of the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, and the Director of the Office of Thrift Supervision shall take appropriate actions, including enforcement actions, denial of applications, or imposition of entrance and exit fees as if such transactions qualified as conversion transactions pursuant to section 5(d) of the Federal Deposit Insurance Act [ 12 U.S.C. 1815(d) ], to prevent insured depository institutions and depository institution holding companies from facilitating or encouraging the shifting of deposits from SAIF-assessable deposits to BIF-assessable deposits (as defined in section 21(k) of the Federal Home Loan Bank Act [ 12 U.S.C. 1441(k) ]) for the purpose of evading the assessments imposed on insured depository institutions with respect to SAIF-assessable deposits under section 7(b) of the Federal Deposit Insurance Act [ 12 U.S.C. 1817(b) ] and section 21(f)(2) of the Federal Home Loan Bank Act [ 12 U.S.C. 1441(f)(2) ]. The Board of Directors of the Federal Deposit Insurance Corporation may issue regulations, including regulations defining terms used in paragraph (1), to prevent the shifting of deposits described in such paragraph. is undertaken in the ordinary course of business of such depository institution; and is not directed towards the depositors of an insured depository institution affiliate (as defined in section 2(k) of the Bank Holding Company Act of 1956 [ 12 U.S.C. 1841(k) ]) of such depository institution.” section 9(a) of the Home Owners’ Loan Act of 1933 [ 12 U.S.C. 1467(a)(2) , (3), (5)]; and section 415(a) of the National Housing Act [ 12 U.S.C. 1730h(a)(2) , (3), (5)],