or from an organized trade association, may be filed with the Secretary to the Board either prior to or during any hearing, and such persons, institutions or associations may appear in person at such hearing before the Board, or may be represented at such hearing by any of their directors, officers, employees, agents, or attorneys-at-law, and be entitled to be

heard.

(Sec. 17, 47 Stat. 736; 12 U. S. C. 1437. Interprets or applies sec. 6 (1), 47 Stat. 727, as amended; 12 U. S. C. 1426 (1))

Part 108-Promulgation of Regulations and Amendments

Sec.

108.10 Reservation of right to amend. 108.11 Amendments of regulations without notice.

108.12 Notice of proposed amendments or regulations not within § 108.11. 108.13 Participation of interested persons in a proposed amendment or rule. 108.14 Repeal of rules and regulations. 108.15 Coordination of subchapters. AUTHORITY: §§ 108.10 to 108.15 issued under sec. 17, 47 Stat. 736; 12 U. S. C. 1437.

SOURCE: §§ 108.10 to 108.15 contained in Resolution 1285, 13 F. R. 8265.

to

§ 108.10 Reservation of right amend. The Board expressly reserves the right to amend (including the right to alter or repeal) the regulations set forth in Subchapters A, B, C, D and E of this chapter.

§ 108.10 Reservation of right to without notice. Any proposed amendment or rule may be adopted by the Board without compliance with the requirements of §§ 107.10 and 107.11, of this subchapter, and §§ 108.12 and 108.13, which involves any matter relating to Board management or personnel or to public property, loans, grants, benefits, or contracts, or which is deemed to apply to interpretative rules, general statements of policy, rules of Board organization, procedure, or practice, or unless all persons subject to any such proposed amendment or rule are named and either personally or otherwise have actual notice thereof in acordance with law, or in any situation in which the Board for good cause finds (and incorporates the findings and a brief statement of the reasons therefor in the amendments or rules issued) that notice and public procedure thereon are impracticable, unnecessary or contrary to the public interest.

§ 108.12 Notice of proposed amendments or regulations not within § 108.11. Excepting any proposed amendment or rule adopted pursuant to § 108.11 no proposed amendment or rule (except any substantive rule granting or recognizing exemption or relieving restriction) will be adopted by the Board until at least 30 days have elapsed after publication in the FEDERAL REGISTER of general notice of such proposed amendment or rule including (a) a statement of the time, place, and nature of public rule making proceedings, (b) reference to the authority under which the amendment or rule is proposed, and (c) either the terms or substance of the proposed amendment or rule or a description of the subjects and issues involved. Notice of such proposed amendment or rule shall also be mailed to each member of the Federal Savings and Loan Advisory Council and to the President of each Federal Home Loan Bank.

§ 108.13 Participation of interested persons in a proposed amendment or rule. At any time within 30 days after publication in the FEDERAL REGISTER of general notice of a proposed amendment or rule as prescribed in § 108.12, interested persons may participate in the making of such a proposed amendment or rule through the submission of written data, views, or arguments thereon delivered within the prescribed time to the Secretary to the Home Loan Bank Board, 101 Indiana Avenue NW., Washington 25, D. C. Interested persons may also petition for the issuance, amendment, or repeal of an amendment or rule and deliver any such petition to the Secretary to the Board at the address given in this section.

§ 108.14 Repeal of rules and regulations. This subchapter together with Subchapter B of this chapter repeals all prior rules and regulations, resolutions, orders and instructions of the Board inconsistent herewith.

§ 108.15 Coordination of subchapters. This subchapter shall be applied in conjunction with any related provisions of Subchapters B, C, D and E of this chapter together with such other material not inconsistent therewith as may be filed now or hereafter by the Home Loan Bank Board, Federal Savings and Loan Insurance Corporation, or Home Owners' Loan Corporation pursuant to section 5, 49 Stat. 501, 44 U. S. C. 305, and sections 3 and 4, 60 Stat. 234, 5 U. S. C. 1002, 1003.

AUTHORITY: §§ 121.1 to 121.11 issued under sec. 17, 47 Stat. 736; 12 U. S. C. 1437.

SOURCE: $§ 121.1 to 121.11 contained in Resolution 1285, 13 F. R. 8266.

§ 121.1 Act. The term "act" means the Federal Home Loan Bank Act, as amended.

§ 121.2 Bank. The term "Bank" means a Federal Home Loan Bank established under the authority of the act.

§ 121.3 Board. The term "Board" means the Home Loan Bank Board or one or more of its officials who has been duly authorized by the Home Loan Bank Board to act in its behalf.

§ 121.4 Creditor liabilities. The term "creditor liabilities" means every form of obligation or debt, secured or unsecured, including deposits, investment certificates, certificates of indebtedness, and all taxes, which the member is directly obligated to pay.

§ 121.5 Deposits in banks or trust companies. The term "deposits in banks or trust companies" includes a checking account maintained by a Federal Home Loan Bank with the Treasurer of the United States, or a deposit in another Federal Home Loan Bank.

§ 121.6 Home mortgage. The term "home mortgage" includes real estate sales contracts, and such other classes of first liens as are commonly given to secure indebtedness on real estate by institutions authorized under the act to become members, under the laws of the State in which the real estate is located, together with the credit instruments, if any, secured thereby.

§ 121.7 Member. The term "member" means an institution which has been

admitted to membership in a Federal Home Loan Bank.

§ 121.8 Net assets. The term "net assets" means gross assets less:

(a) An amount equivalent to the book value of shares pledged in connection with loans of the share account sinking fund type;

(b) An amount equivalent to unapplied credits on mortgage loans;

(c) An amount equivalent to mortgages in process carried as a liability;

(d) An amount equivalent to unassumed mortgages on real estate owned if carried as a liability;

(e) Inter-series loans;
(f) Delinquent dues;

(g) An amount equivalent to reserves for depreciation on office building and furniture and fixtures unless these assets are carried at net figures with the reserves shown as a deduction from the original cost;

(h) An amount equivalent to special reserves established pursuant to § 143.17 of Subchapter C of this chapter and similar reserves established by Statechartered institutions pursuant to rules and regulations of State supervisory authorities;

(i) Current expenses;

(j) Any other similar contra item of an off-setting, bookkeeping nature.

§ 121.9 Obligations of the United States. The term "obligations of the United States" means all evidences of indebtedness issued by the United States or fully guaranteed as to principal and interest by the United States.

§ 121.10 State. Except as defined in § 122.45 of this subchapter, the term "State" means any one of the 48 States, the District of Columbia, Puerto Rico, the Virgin Islands of the United States, or the Territory of Alaska or of Hawaii.

§ 121.11 Paid-in value. The term "paid-in value" of stock in a Federal Home Loan Bank means the aggregate par value of stock in such Bank which is fully paid, and the sum of payments on the par value of stock which is not fully paid.

§ 122.5 Par value and price of stock. The capital stock of each Bank, in excess of its minimum capital as established pursuant to the authority contained in section 6 (a) of the act, shall be sold at par unless a price in excess of par has been designated by the Board.

§ 122.6 Dividends. The board of directors of a Bank may, with the approval of the Board, declare dividends out of net earnings or undivided profits to stock. holders of record at the close of business on June 30 and/or December 31 upon the paid-in value of capital stock outstanding on such record date payable on a date to be specified in the resolution declaring said dividend. On payments made on account of stock during the dividend period (after deducting amounts of any stock repurchased), dividends shall be computed for the time such payments were invested in the Bank's stock.

§ 122.10 Issuance of stock certificates. When a Bank receives advice that an institution has been approved for membership by the Board, it shall issue as of the effective date of such membership, in the name of such member, a certificate of stock for the full amount of such member's stock subscription and upon the issuance of such certificate, such member shall be deemed a stockholder of record; but where such member has not made full and final payment on account of its stock subscription, the Bank shall hold the stock certificates so issued until full payment therefor has been received by the Bank. Upon the change in the name of a member, it shall surrender to the Bank its stock certificate or certificates, which shall be promptly canceled and a new certificate or certificates issued in lieu thereof.

§ 122.11 Stock certificates in consolidations. Upon the consolidation of two or more member institutions into a single institution operating under the charter of one of the consolidating institutions, the institutions other than the

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one surviving shall surrender their stock certificates to the Bank of which they are members, and upon the cancellation of such certificates by the Bank, the stock subscriptions of such institutions may be refunded to the consolidated institution after adjustment to the minimum number of shares required to be held by the consolidated institution under the provisions of section 6 (c) and/or section 10 (c) of the act.

§ 122.12 Stock certificates in reorganizations. If a member institution reorganizes by transferring all of its assets to another institution or by transferring a portion of its assets to such institution and retaining the remainder for liquidating, the member shall surrender its stock certificate to the Bank, and upon the cancellation of such certificate the Bank shall, subject to the approval of the Board, and providing no advances are outstanding necessitating the holding of the stock as collateral, either refund to the member the value thereof (which shall not exceed the amount paid in), or, at its discretion, to the institution acquiring the assets; except, however, in lieu of the latter, if the institution acquiring the assets has made application and has been approved for membership, the Bank is authorized to apply as a payment on the stock subscription of such institution the refund value of the liquidating member's stock.

§ 122.13 Lost or destroyed certificates. The Banks are authorized to issue certificates of stock to replace certificates lost or destroyed, upon presentation by the member of satisfactory evidence of such loss or destruction, and such certificates shall show on the face thereof that they are duplicates.

000 of the capital stock of a Bank when they have subscribed to a total of $1,000,000 par value of such stock, made the statutory payments thereon, such subscriptions have been accepted and the subscribers have been notified.

§ 122.23 Class directors. Two of such directors shall be known as Class A directors, two as Class B and two as Class C, and shall hold office for terms of 2 years. Each of these directors shall be a citizen of the United States, a bona fide resident of the district in which the Bank is located; shall be an officer or director of a member of the Bank in the group electing him and shall be deemed to be from the State in which such member is located.

§ 122.24 Directors-at-large. Two of the eight directors to be elected shall be elected by the membership-at-large without regard to classes; shall be known as directors-at-large; and shall hold office for terms of 2 years. Each of these directors shall be a citizen of the United States and a bona fide resident of the Bank district. Each of these directors who is an officer or director of a. member of the Bank shall be deemed to be from the State in which such member is located. Each of these directors who is not an officer or director of a member of the Bank, shall be deemed to be from the State in which he has established a bona fide residence.

§ 122.25 Conduct of election. The election of directors shall be held annually and shall be conducted by mail under the supervision of the Board. No nominations shall be accepted from members which were admitted to membership within the 10 days prior to the date nomination certificates are to be forwarded to members as set forth in § 122.26 and no votes for the election of candidates shall be accepted from members which were admitted to membership within the 10 days prior to the date election ballots are to be forwarded to members as set forth in §§ 122.30 and 122.36, respectively.

§ 122.26 Notification of nomination and classification. The Board will adjust the lines of class demarcation of members every 4 years or more often if it deems such action desirable. Before August 1 of each year, the Board will divide the member institutions into groups A, B, and C on the basis of the size of the members as determined, as of the May 31 immediately preceding said

August 1, from the aggregate unpaid principal of each member's home mortgage loans appearing on the most recent annual report of the member in the possession of its Bank or on the most recent financial statement of a member in the possession of its Bank in the event such Bank holds no annual report of such member. The Board will then notify each member not later than August 1 of each year of its right to nominate and of its classification and will furnish each member with a list of the members in its class and a list of those holding directorships at that time in the Bank of which it is a member, containing the name of each director, the date of expiration of the term of each director, the name and address of the member institution of which each class director is an officer or director, the name and address of the institution with which each director-atlarge is affiliated and his title, or, if not affiliated with an institution, his present or former occupation and the city and State of which he is a resident, indicating each class directorship and each directorship-at-large. At the same time each member will be furnished with the necessary nominating certificates and will be notified of each directorship to be filled from the membership-at-large and of each directorship to be filled in its class. Each Bank will be furnished with copies of all such information and certificates forwarded to its members. [Correction noted at 14 F. R. 123]

§ 122.27 Nominating certificates. Upon receipt of the nominating certificates each member, by resolution of its governing body, may nominate, or authorize one of its directors and one of its officers to nominate, a suitably qualified person for each directorship to be filled in its class and each directorship to be filled from the membership-at-large. The certificates shall then be duly executed and mailed to the Secretary to the Board, so as to be delivered to his office in Washington, D. C., not later than August 31.

§ 122.28 Notification to nominees. A letter will be forwarded to each nominee under registered mail so as to reach his address, as shown by the Board's records, before September 9, informing him of his nomination: Provided, however, No such letter shall be forwarded to any nominee holding a class directorship or a directorship-at-large whose term does not expire until after the close of the calendar year during which the election is being held or

to any nominee holding a public interest directorship, unless the Secretary to the Board has received from him before September 1 notice of his intention to be a candidate for a class directorship or directorship-at-large. With such letter each such nominee will be forwarded a list of nominees and the directorship or directorships for which each was nominated, and a questionnaire which will contain, among other things, a request for a brief biography and questions to ascertain whether the nominee is eligible for the directorship for which he has been nominated and whether he is willing to serve if elected. Such questionnaire must be completely filled in and mailed so as to be delivered to the office of the Secretary to the Board not later than September 15 in order for the nominee to have his name placed on an election ballot. No candidate shall be eligible for election to a directorship unless he is nominated and his name placed on an election ballot pursuant to the provisions of this section and § 122.29.

§ 122.29 Nominations for more than one directorship. In the event any person is nominated for two directorships, he will be so informed by the Board in the letter referred to in § 122.28 and given an opportunity to state which of said directorships he prefers; or in the event any person is nominated for more than two directorships, he will be so informed by the Board by said letter and given the opportunity to express his order of preference for the directorships for which he has been nominated. In each such case the nominee will be informed by said letter that it is necessary that the Board receive from him, not later than September 15, an expression of preference in order to have his name placed on an election ballot. In each such case where the Board has received from a nominee an expression of preference within the time referred to and the other information as required in this part, the Board will, in accordance with the preference expressed, designate the directorship for which the nominee shall be a candidate; however, if it appears to the Board that such action would impair, or result in such nominee having no chance of being elected on account of, the representation per State as set forth in § 122.32, the Board will designate such person as a candidate only for the directorship which appears to the Board to be the most suitable, if it also appears to the Board such person