§ 1430. Advances to members
(a)
In general
(3)
Collateral
A Bank, at the time of origination or renewal of a loan or advance, shall obtain and maintain a security interest in collateral eligible pursuant to one or more of the following categories:
(A)
Fully disbursed, whole first mortgages on improved residential property (not more than 90 days delinquent), or securities representing a whole interest in such mortgages.
(B)
Securities issued, insured, or guaranteed by the United States Government or any agency thereof (including without limitation, mortgage-backed securities issued or guaranteed by the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Corporation, and the Government National Mortgage Association).
(4)
Additional bank authority
Subparagraphs (A) through (E) of paragraph (3) shall not affect the ability of any Federal Home Loan Bank to take such steps as it deems necessary to protect its security position with respect to outstanding advances, including requiring deposits of additional collateral security, whether or not such additional security would be eligible to originate an advance. If an advance existing on August 9, 1989, matures and the member does not have sufficient eligible collateral to fully secure a renewal of such advance, a Bank may renew such advance secured by such collateral as the Bank determines is appropriate. A member that has an advance secured by such insufficient eligible collateral must reduce its level of outstanding advances promptly and prudently in accordance with a schedule determined by the Federal home loan bank.
(5)
Review of certain collateral standards
The Director may review the collateral standards applicable to each Federal home loan bank for the classes of collateral described in subparagraphs (D) and (E) of paragraph (3), and may, if necessary for safety and soundness purposes, require an increase in the collateral standards for any or all of those classes of collateral.
(b)
Appraisals and other investigations; acceptance of home mortgages as collateral security only by approval of Director
For the purposes of this section, each Home Loan Bank shall have power to make, or to cause or require to be made, such appraisals and other investigations as it may deem necessary. No home mortgage otherwise eligible to be accepted as collateral security for an advance by a Home Loan Bank shall be accepted if any director, officer, employee, attorney or agent of the Home Loan Bank or of the borrowing institution is personally liable thereon, unless the Director has specifically approved such acceptance.
(c)
Notes of borrowing members; interest rate; lien on stock
Such advances shall be made upon the note or obligation of the member secured as provided in this section, bearing such rate of interest as the Federal home loan bank may approve or determine, and the Federal Home Loan Bank shall have a lien upon and shall hold the stock of such member as further collateral security for all indebtedness of the member to the Federal Home Loan Bank.
(d)
Obligation to repay; additional security; sale of advances to other banks
The institution applying for an advance shall enter into a primary and unconditional obligation to pay off all advances, together with interest and any unpaid costs and expenses in connection therewith according to the terms under which they were made, in such form as shall meet the requirements of the bank. The bank shall reserve the right to require at any time, when deemed necessary for its protection, deposits of additional collateral security or substitutions of security by the borrowing institution, and each borrowing institution shall assign additional or substituted security when and as so required. Any Federal Home Loan Bank shall have power to sell to any other Federal Home Loan Bank, with or without recourse, any advance made under the provisions of this chapter, or to allow to such bank a participation therein, and any other Federal Home Loan Bank shall have power to purchase such advance or to accept a participation therein, together with an appropriate assignment of security therefor.
(e)
Priority of certain secured interests
Notwithstanding any other provision of law, any security interest granted to a Federal Home Loan Bank by any member of any Federal Home Loan Bank or any affiliate of any such member shall be entitled to priority over the claims and rights of any party (including any receiver, conservator, trustee, or similar party having rights of a lien creditor) other than claims and rights that—
(g)
1 Community support requirements
(h)
Special liquidity advances
(1)
In general
Subject to paragraph (2), the Federal Home Loan Banks may, upon the request of the Director of the Office of Thrift Supervision, make short-term liquidity advances to a savings association that—
(2)
Interest on and security for special liquidity advances
Any loan by a Federal Home Loan Bank pursuant to paragraph (1) shall be subject to all applicable collateral requirements, including the requirements of subsection (a) of this section, and shall be at an interest rate no less favorable than those made available for similar short-term liquidity advances to savings associations that do not present such supervisory concern.
(i)
Community investment program
(1)
In general
Each Bank shall establish a program to provide funding for members to undertake community-oriented mortgage lending. Each Bank shall designate a community investment officer to implement community lending and affordable housing advance programs of the Banks under this subsection and subsection (j) of this section and provide technical assistance and outreach to promote such programs. Advances under this program shall be priced at the cost of consolidated Federal Home Loan Bank obligations of comparable maturities, taking into account reasonable administrative costs.
(2)
Community-oriented mortgage lending
For purposes of this subsection, the term “community-oriented mortgage lending” means providing loans—
(A)
to finance home purchases by families whose income does not exceed 115 percent of the median income for the area,
(B)
to finance purchase or rehabilitation of housing for occupancy by families whose income does not exceed 115 percent of median income for the area,
(j)
Affordable housing program
(1)
In general
Pursuant to regulations promulgated by the Director, each Bank shall establish an Affordable Housing Program to subsidize the interest rate on advances to members engaged in lending for long term, low- and moderate-income, owner-occupied and affordable rental housing at subsidized interest rates.
(2)
Standards
The Board’s [2] regulations shall permit Bank members to use subsidized advances received from the Banks to—
(A)
finance homeownership by families with incomes at or below 80 percent of the median income for the area;
(B)
finance the purchase, construction, or rehabilitation of rental housing, at least 20 percent of the units of which will be occupied by and affordable for very low-income households for the remaining useful life of such housing or the mortgage term; or
(C)
during the 2-year period beginning on July 30, 2008, use such percentage as the Director may by regulation establish of any subsidized advances set aside to finance homeownership under subparagraph (A) to refinance loans that are secured by a first mortgage on a primary residence of any family having an income at or below 80 percent of the median income for the area.
(3)
Priorities for making advances
In using advances authorized under paragraph (1), each Bank member shall give priority to qualified projects such as the following:
(A)
purchase of homes by families whose income is 80 percent or less of the median income for the area,
(4)
Report
Each member receiving advances under this program shall report annually to the Bank making such advances concerning the member’s use of advances received under this program.
(5)
Contribution to program
Each Bank shall annually contribute the percentage of its annual net earnings prescribed in the following subparagraphs to support subsidized advances through the Affordable Housing Program:
(A)
In 1990, 1991, 1992, and 1993, 5 percent of the preceding year’s net income, or such prorated sums as may be required to assure that the aggregate contribution of all the Banks shall not be less than $50,000,000 for each such year.
(6)
Grounds for suspending contributions
(A)
In general
If a Bank finds that the payments required under this paragraph are contributing to the financial instability of such Bank, it may apply to the Director for a temporary suspension of such payments.
(B)
Financial instability
In determining the financial instability of a Bank, the Director shall consider such factors as
(C)
Review
The Director shall review the application and any supporting financial data and issue a written decision approving or disapproving such application. The Board’s [2] decision shall be accompanied by specific findings and reasons for its action.
(D)
Monitoring suspension
If the Director grants a suspension, it shall specify the period of time such suspension shall remain in effect and shall continue to monitor the Bank’s financial condition during such suspension.
(E)
Limitations on grounds for suspension
The Director shall not suspend payments to the Affordable Housing Program if the Bank’s reduction in earnings is a result of
(F)
Congressional notification and action
The Director shall notify the Committee on Banking, Finance and Urban Affairs of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate not less than 60 days before such suspension takes effect. Such suspension shall become effective unless a joint resolution is enacted disapproving such suspension.
(7)
Failure to use amounts for affordable housing
If any Bank fails to utilize or commit the full amount provided in this subsection in any year, 90 percent of the amount that has not been utilized or committed in that year shall be deposited by the Bank in an Affordable Housing Reserve Fund administered by the Director. The 10 percent of the unutilized and uncommitted amount retained by a Bank should be fully utilized or committed by that Bank during the following year and any remaining portion must be deposited in the Affordable Housing Reserve Fund. Under regulations established by the Director, funds from the Affordable Housing Reserve Fund may be made available to any Bank to meet additional affordable housing needs in such Bank’s district pursuant to this section.
(8)
Net earnings
The net earnings of any Federal Home Loan Bank shall be determined for purposes of this paragraph—
(9)
Regulations
The Director shall promulgate regulations to implement this subsection. Such regulations shall, at a minimum—
(C)
ensure that advances made under this program will be used only to assist projects for which adequate long-term monitoring is available to guarantee that affordability standards and other requirements of this subsection are satisfied;
(D)
ensure that a preponderance of assistance provided under this subsection is ultimately received by low- and moderate-income households;
(E)
ensure that subsidies provided by Banks to member institutions under this program are passed on to the ultimate borrower;
(10)
Other programs
No provision of this subsection or subsection (i) of this section shall preclude any Bank from establishing additional community investment cash advance programs or contributing additional sums to the Affordable Housing Reserve Fund.
(11)
Advisory Council
Each Bank shall appoint an Advisory Council of 7 to 15 persons drawn from community and nonprofit organizations actively involved in providing or promoting low- and moderate-income housing in its district. The Advisory Council shall meet with representatives of the board of directors of the Bank quarterly to advise the Bank on low- and moderate-income housing programs and needs in the district and on the utilization of the advances for these purposes. Each Advisory Council established under this paragraph shall submit to the Director at least annually its analysis of the low-income housing activity of the Bank by which it is appointed.
(12)
Reports to Congress
(A)
The Director shall monitor and report annually to the Congress and the Advisory Council for each Bank the support of low-income housing and community development by the Banks and the utilization of advances for these purposes.
(B)
The analyses submitted by the Advisory Councils to the Director under paragraph (11) shall be included as part of the report required by this paragraph.
(13)
Definitions
For purposes of this subsection—
(A)
Low- or moderate-income household
The term “low- or moderate-income household” means any household which has an income of 80 percent or less of the area median.
(B)
Very low-income household
The term “very low-income household” means any household that has an income of 50 percent or less of the area median.
(C)
Low- or moderate-income neighborhood
The term “low- or moderate-income neighborhood” means any neighborhood in which 51 percent or more of the households are low- or moderate-income households.
(D)
Affordable for very-low income households
For purposes of paragraph (2)(B) the term “affordable for very-low income households” means that rents charged to tenants for units made available for occupancy by low-income families shall not exceed 30 percent of the adjusted income of a family whose income equals 50 percent of the income for the area (as determined by the Secretary of Housing and Urban Development) with adjustment for family size.
(k)
Public use database
(1)
Data
Each Federal Home Loan Bank shall provide to the Director, in a form determined by the Director, census tract level data relating to mortgages purchased, if any, including—
(2)
Public use database
(A)
In general
The Director shall make available to the public, in a form that is useful to the public (including forms accessible electronically), and to the extent practicable, the data provided to the Director under paragraph (1).
(B)
Proprietary information
Not withstanding subparagraph (A), the Director may not provide public access to, or disclose to the public, any information required to be submitted under this subsection that the Director determines is proprietary or that would provide personally identifiable information and that is not otherwise publicly accessible through other forms, unless the Director determines that it is in the public interest to provide such information.
[1] So in original. No subsec. (f) has been enacted.
[2] So in original. Probably should be “The Director’s”.