an

paragraph (A)(i) shall not exceed amount equal to 1⁄2 of the net earnings available for dividends of the bank for the year. (E) Transfer to account for purchase of stock required

Of the net earnings available for dividends 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 Board shall prescribe by regulations) the balance in which shall be available only for such purchases. (F) Net earnings available for dividends defined For purposes of this paragraph, the term "net earnings available for dividends" means the net earnings of a bank for any period as computed after reducing the amount of earnings for such period by the amount required to be carried (for such period) to reserves maintained by such bank pursuant to the first two sentences of section 1436 of this title.

(7) Undivided profits defined

For purposes of paragraph (3), the term "undivided profits" means retained earnings minus the sum of

of securities described in subsection (g)(2) of this section which are held at such time in the segregated account established pursuant to such subsection; or

(B) $10,825,000,000.

(2) Annual limitation on net new borrowing Net new borrowing by the Financing Corporation

(A) shall not exceed an amount equal to $3,750,000,000 in the 1-year period beginning on August 10, 1987; and

(B) shall not exceed an amount equal to $3,750,000,000 in each 1-year period beginning after the 1-year period described in subparagraph (A).

(3) Net proceeds to be invested in capital of FSLIC Subject to such terms and conditions as may be approved by the Board, the net proceeds of any obligation issued by the Financing Corporation shall be used to

(A) purchase capital certificates or capital stock issued by the Federal Savings and Loan Insurance Corporation under section 1725(b)(1)(A) of this title; or

(B) refund any previously issued obligation the net proceeds of which were invested in the manner described in subparagraph (A).

(4) Limitation on term of obligations

No obligation of the Financing Corporation may be issued which matures—

(A) more than 30 years after the date of issue; or

(B) after December 31, 2026.

(5) Investment of United States funds in obligations

Obligations issued under this section by the Financing Corporation with the approval of the Board 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.

(6) Market for obligations

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.

(7) No full faith and credit of the United States

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 Federal Savings and Loan Insurance Corporation and the obligations shall so plainly state. (8) Tax exempt status (A) In general

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.

(B) Exception

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).

(9) Obligations are exempt securities

Notwithstanding paragraph (7), 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. (10) Minority participation in public offerings

The Chairman of the Board 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.

(f) Assessment authority of Financing Corporation (1) In general

The Financing Corporation may, with the approval of the Board, assess on each insured institution an assessment, except that the aggregate amount assessed under this paragraph on any insured institution for any year may not exceed an amount equal to 12th of 1 percent of the aggregate amount of all accounts of insured members of such insured institution.

(2) Supplemental assessment authorized

Upon the unanimous vote of the Directorate that additional funds are needed to pay the interest on the obligations of the Financing Corporation because no other funds are available, the Financing Corporation may, with the approval of the Board and in addition to any assessment assessed under paragraph (1), assess on each insured institution an assessment, except that the aggregate amount assessed under this paragraph on any insured institution for any year may not exceed an amount equal to %th of 1 percent of the aggregate amount of all accounts of insured members of such insured institution. (3) Total amount of assessments may not exceed interest and financing costs

The aggregate amount of all assessments assessed under paragraphs (1) and (2) for any year may not exceed

(A) the aggregate amount of

(i) issuance costs (as such term is defined in subsection (g)(5)(A) of this section) incurred with respect to obligations issued during such year;

(ii) interest paid on (and any redemption premium paid with respect to) obligations of the Financing Corporation during such year; and

(iii) custodian fees (as such term is defined in subsection (g)(5)(B) of this section) incurred during such year; minus

(B) the aggregate amount of any payments under subsection (g)(4) of this section during such year.

(4) Termination assessments

(A) Assessment authorized

The Financing Corporation shall, with the approval of the Board, assess a termination assessment on any insured institution which ceases to be an insured institution. (B) Maximum amount of assessment

The amount of the assessment on any institution under subparagraph (A) shall be the amount which is equal to the sum of

(i) the amount which is equal to 2 times the last annual insurance premium payable by such institution under section 1727(b) of this title (including the amount of any assessment imposed under paragraph (1) of this subsection in lieu of any such premium); and

(ii) the amount which is the product of

(I) the aggregate amount of all accounts of insured members of such institution (as of the date the institution ceases to be an insured institution); and

(II) 2 times the rate (expressed as an annual rate) at which the supplemental assessment under section 1727(c) of this title was assessed against insured institutions by the Federal Savings and Loan Insurance Corporation in 1986.

(C) Reduction in assessment allowed for weakened institutions

The amount of any assessment which the Financing Corporation may otherwise impose under this paragraph on an institution (which ceases to be an insured institution) may be reduced by such amount as the Financing Corporation, with the approval of the Board, may deem appropriate when

(i) the institution poses a substantial risk to the assets of the Federal Savings and Loan Insurance Corporation; and

(ii) such reduction is necessary to assist in the sale or other disposition of the institution.

(D) Time for paying assessment (i) Due within 30 days

If an assessment is imposed on an institution under subparagraph (A), the institution shall be obligated to pay such assessment before the end of the 30-day period beginning on the date on which such institution ceases to be an insured institution.

(ii) Semiannual installments with interest

Notwithstanding the requirement of clause (i), an institution may elect to pay the amount of any assessment imposed under subparagraph (A) in semiannual installments during the period beginning no

later than the end of the 30-day period referred to in clause (i) and ending no later than the end of the 2-year period beginning on the date such assessment is imposed, together with interest accruing on the unpaid balance of such amount at a variable rate equal to the sum of—

(I) the bond equivalent yield on 6month United States Treasury bills; and (II) 100 basis points.

(E) Exit fee equalization

If any institution described in subparagraph (F) paid any exit fee, or the equivalent thereof (as determined by the Corporation), on or before August 10, 1987, the Corporation shall repay to such institution an amount equal to the amount by which the amount of such fee exceeds the amount which such institution would be required to pay if the amount of such fee were determined under this paragraph as of August 10, 1987.

(F) Provisions applicable to certain institutions

Except as provided in subparagraph (E), no assessment under this paragraph or insurance premium under section 1730(d) of this title may be imposed on an insured institution which, on or before March 31, 1987, had

(i) its status as an insured institution terminated voluntarily, involuntarily, or by operation of law in connection with a conversion into, merger with, acquisition by, consolidation with, reorganization into, or combination by any means with, an institution the deposits of which are insured by the Federal Deposit Insurance Corporation;

(ii) filed an application or notice with any State banking agency or authority, or with the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, the Corporation or the Federal Home Loan Bank Board pursuant to a transaction which, upon consummation thereof, will result in the termination of the institution's status as an insured institution in connection with its conversion into, merger with, acquisition by, consolidation with, reorganization into, or combination by any means with, an institution the deposits of which are insured by the Federal Deposit Insurance Corporation; or

(iii) entered into a letter of intent or a written memorandum of understanding, pursuant to a transaction which will result in the termination of the institution's status as an insured institution in connection with its conversion into, merger with, acquisition by consolidation with, reorganization into, or combination by any means with, an institution the deposits of which are insured by the Federal Deposit Insurance Corporation.

(G) Additional provision

Notwithstanding any other provision of law, the Federal Savings and Loan Insur

ance Corporation shall repay to Comerica, Inc. of Detroit, Michigan, an amount equal to any exit fee or equivalent thereof paid by Comerica, Inc.

(5) Payment to Financing Corporation

All assessments assessed by the Financing Corporation under paragraph (1), (2), or (4) shall be paid to the Financing Corporation. (g) Use and disposition of assets of Financing Corporation not invested in FSLIC

(1) In general

Subject to such regulations, restrictions, and limitations as may be prescribed by the Board, 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, shall be invested in

(A) direct obligations of the United States;

(B) obligations, participations, or other instruments of, or issued by, the Federal National Mortgage Association or the Government National Mortgage Association;

(C) 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

(D) any other security in which it is lawful for fiduciary and trust funds to be invested under the laws of any State.

(2) Segregated account for zero coupon instruments held to assure payment of principal The Financing Corporation shall invest in, and hold in a segregated account, noninterest bearing instruments

(A) which are securities described in paragraph (1); and

(B) 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,

to assure the repayment of principal on obligations of the Financing Corporation. (3) Dollar amount limitation on investment in zero coupon instruments for segregated account 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).

(4) Exception for payment of issuance costs, interest, and custodian fees

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

(A) issuance costs;

(B) any interest on (and any redemption premium with respect to) any obligation of the Financing Corporation; and

(C) custodian fees.

(5) Definitions

For purposes of this subsection

(A) Issuance costs

The term "issuance costs"

(i) 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

(ii) 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. (B) Custodian fees

The term "custodian fee" means

(i) 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

(ii) any other expense incurred by the Financing Corporation in connection with the establishment or maintenance of such account.

(h) Miscellaneous provisions relating to Financing Corporation

(1) Treatment for certain purposes

Except as provided in subsection (e)(8)(B) of this section, the Financing Corporation shall be treated as a Federal Home Loan Bank for purposes of sections 1433 and 1443 of this title.

(2) Federal Reserve banks as depositaries and fiscal agents

The Federal Reserve banks are authorized to act as depositaries for or fiscal agents or custodians of the Financing Corporation. (3) Applicability of certain provisions relating to Government 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, 9107, and 9108 of title 31, as a mixed-ownership Government corporation which has capital of

the Government.

(i) Federal Savings and Loan Insurance Corporation Industry Advisory Committee

(1) Establishment

There is hereby established the Federal Savings and Loan Insurance Corporation Industry Advisory Committee (hereinafter in this subsection referred to as the "Committee").

(2) Membership

(A) Appointment

The Committee shall consist of 13 members selected as follows:

(i) 1 member appointed by the Chairman of the Board from among individuals who are officers of insured institutions

and who are not members of the Board or employees of the Board, the Federal Savings and Loan Insurance Corporation, or the Board of Directors of any Federal Home Loan Bank.

(ii) 1 member elected from each Federal Home Loan Bank district (by the members of the Board of Directors of each such bank who were elected by the members of such bank) from among individuals who are officers of insured institutions.

(B) Terms

Members shall be appointed or elected for terms of 1 year.

(C) Chairperson

The member appointed under subparagraph (A)(i) shall be the chairperson of the Committee.

(D) Vacancies

Any vacancy on the Committee shall be filled in the manner in which the original appointment was made.

(E) Pay and expenses

Members of the Committee shall serve without pay but each member of the Committee shall be reimbursed, in such manner as the Board may prescribe by regulation, by the Federal Home Loan Bank which elected such member (and, in the case of the member appointed by the Chairman of the Board, by the Board) for expenses incurred in connection with attendance of such members at meetings of the Committee.

(F) Meetings

The Committee shall meet from time to time at the call of the chairperson or a majority of the members.

(3) Duties of the Committee

The duties of the Committee are as follows: (A) To review the reports and budgets prepared pursuant to section 1725(k) of this title and any other matter which the Board may present for the Committee's consideration.

(B) To confer with the Board on the reports, budgets, and other matters reviewed under subparagraph (A).

(C) To prepare written comments and recommendations for the Board and the Federal Savings and Loan Insurance Corporation with respect to the reports, budgets, and other matters reviewed under subparagraph (A) (which shall be submitted to the Board in a timely manner after each meeting). (4) Annual report

(A) Required

Not later than January 15 of each year, the Committee shall submit a report to 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.

(B) Contents

The report required under subparagraph (A) shall describe the activities of the Committee during the preceding year and the reports and recommendations made by the Committee to the Board and the Federal Savings and Loan Insurance Corporation during such year.

(5) Regulations

The Board shall prescribe such regulations as the Board determines to be appropriate to avoid conflicts of interest with respect to the disclosure to and use by members of the Committee of information relating to the Board, the Federal Savings and Loan Insurance Corporation, the Federal Home Loan Banks, and the Federal Asset Disposition Association. (6) Federal Advisory Committee Act does not apply The Federal Advisory Committee Act shall not apply to the Committee.

(7) Termination

The Committee shall terminate when the Financing Corporation terminates under subsection (j) of this section.

(j) Termination of Financing Corporation (1) In general

The Financing Corporation shall be dissolved, as soon as practicable, after the earlier of

(A) the date by which all stock purchased by the Financing Corporation in the Federal Savings and Loan Insurance Corporation has been retired; or

(B) December 31, 2026.

(2) Board authority to conclude the affairs of Financing Corporation

Effective on the date of the dissolution of the Financing Corporation under paragraph (1), the Board may exercise, on behalf of the Financing Corporation, any power of the Financing Corporation which the Board determines to be necessary to settle and conclude the affairs of the Financing Corporation. (k) Regulations

The Board may prescribe such regulations as may be necessary to carry out the provisions of this section, including regulations defining terms used in this section.

(1) Definitions

For purposes of this section

(1) Insured institution

The term "insured institution" has the meaning given to such term by section 1724(a) of this title.

(2) Insured member

The term "insured member" has the meaning given to such term by section 1724(b) of this title.

(3) Directorate

The term "Directorate" means the directorate established in the manner provided in subsection (b)(1) of this section to manage the Financing Corporation.

(July 22, 1932, ch. 522, § 21, as added Aug. 10, 1987, Pub. L. 100-86, title III, § 302, 101 Stat. 585.)

REFERENCES IN TEXT

August 10, 1987, referred to the second time in subsec. (f)(4)(E), was in the original "the date of the enactment of this Act", which was translated as meaning the date of enactment of Pub. L. 100-86, which enacted this section, to reflect the probable intent of Congress.

The Federal Advisory Committee Act, referred to in subsec. (i)(6), is Pub. L. 92-463, Oct. 6, 1972, 86 Stat. 770, as amended, which is set out in the Appendix to Title 5, Government Organization and Employees.

PRIOR PROVISIONS

A prior section 1441, act July 22, 1932, ch. 522, § 21, 47 Stat. 738, which related to unlawful acts and penalties, was repealed by act June 25, 1948, ch. 645, § 21, 62 Stat. 862, eff. Sept. 1, 1948. See sections 433, 493, 657, 659, 660, 709, 1006, 1014, and 2117 of Title 18, Crimes and Criminal Procedure.

STATE COOPERATIVE BANKS DEEMED INSURED
INSTITUTIONS UNDER Subsection (f)(4)(F)

Pub. L. 100-202, § 101(f) [title III, § 3011, Dec. 22, 1987, 101 Stat. 1329-187, 1329-211, provided in part that: "Any cooperative bank established under the law of any State which was directed by the State banking authority of such State to obtain Federal deposit insurance between January 1, 1985, and January 1, 1987, shall be deemed to be an insured institution described in section 21(f)(4)(F) of the Federal Home Loan Bank Act [12 U.S.C. 1441(f)(4)(F)]."

SUNSET PROVisions; SavinGS PROVISIONS Section 416 of Pub. L. 100-86 provided that:

"(a) IN GENERAL.-The following provisions shall cease to be effective on the date that a notice is published in the Federal Register by the Financing Corporation pursuant to subsection (b):

“(1) Paragraphs (2), (3), and (5) of—

"(A) section 9(a) of the Home Owners' Loan Act of 1933 [12 U.S.C. 1467(a)(2), (3), (5)]; and

"(B) section 415(a) of the National Housing Act [12 U.S.C. 1730h(a)(2), (3), (5)],

(as added by subsections (a) and (b), respectively, of section 402 of this title).

"(2) Section 10 of the Home Owners' Loan Act of 1933 [12 U.S.C. 1467a] and section 416 of the National Housing Act [12 U.S.C. 1730i) (as added by subsections (a) and (b), respectively, of section 404 of this title).

"(3) Paragraph (6) of section 406(f) of the National Housing Act [12 U.S.C. 1729(f)(6)] (as added by section 405 of this title).

"(4) Section 22A of the Federal Home Loan Bank Act [12 U.S.C. 1442a) (as added by section 407(d) of this title).

"(5) Section 411 of this title [12 U.S.C. 1437 note]. "(b) NOTICE OF COMPLETION OF NET NEW BORROWING BY FINANCING CORPORATION.-When the Financing Corporation established pursuant to section 21 of the Federal Home Loan Bank Act [12 U.S.C. 1441] has completed all net new borrowing under such section, the Financing Corporation shall publish a notice of such fact in the Federal Register.

"(c) SAVINGS PROVISION.-The termination by subsection (a) of the effectiveness of any provision described in such subsection shall not be construed to affect or limit any authority of the Federal Home Loan Bank Board or the Federal Savings and Loan Insurance Corporation to prescribe any regulation or engage in any activity with respect to any association or insured institution under any other provision of law."