entire time to the business of the board. Before entering upon his duties each of the members shall take an oath faithfully to discharge the duties of his office. The President of the United States shall designate one of the members of the board to serve for a term of two years, one for three years, one for four years, one for five years, and one for six years from the date of the enactment hereof, and thereafter the term of each member shall be six years from the date of the expiration of the term for which his predecessor was appointed. Whenever a vacancy shall occur among the members the person appointed to fill such vacancy shall hold office for the unexpired portion of the term of the member whose place he is selected to fill. Each of the members of the board shall receive a salary at the rate of $10,000 per annum: Provided, That during the fiscal year 1933 the salary shall be $9,000 per annum. The President shall designate one of the members as chairman of the board. The chairman shall be the chief executive officer of the board and in his absence or disability the duties of his office shall be performed by some one of the other members to be designated as acting chairman by the chairman in such order as he may determine. The board shall supervise the Federal Home Loan Banks created by this Act, shall perform the other duties specifically prescribed by this Act, and shall have power to adopt, amend, and require the observance of such rules, regulations, and orders as shall be necessary from time to time for carrying out the purposes of the provisions of this Act. The board shall have power to suspend or remove any director, officer, employee, or agent of any Federal Home Loan Bank, the cause of such suspension or removal to be communicated in writing forthwith to such director, officer, employee, or agent and to such Federal Home Loan Bank. "(b) The Home Loan Bank Board which was, pursuant to Reorganization Plan Numbered 3 of 1947, established and made a constituent agency of the Housing and Home Finance Agency shall, from the effective date of the Housing Amendments of 1955, cease to be such a constituent agency and shall be an independent agency (including the Federal Savings and Loan Insurance Corporation) in the executive branch of the Government: Provided, That the functions vested in the Chairman of said board under clause (2) of the last sentence of subsection (b) of section 2 of said reorganization plan are hereby transferred to said board. Notwithstanding any other provision of law, said board, the Chairman thereof except as herein otherwise provided, and the Federal Savings and Loan Insurance Corporation, respectively, shall have and may exercise all functions which they respectively had or could exercise, immediately prior to the effective date of the Housing Amendments of 1955 or immediately prior to the effective date of the Independent Office Appropriation Act, 1955. Said board shall annually make a report of its operations (including those of the Fedreal Savings and Loan Insurance Corporation) to the Congress as soon as practicable after the first day of January in each year. The name of the Home Loan Bank Board is hereby changed to 'Federal Home Loan Bank Board.'

Recommendations

Amend section 17 as follows: (1) by striking all of subsection (a) except the last two sentences; (2) by adding to subsection (a), at the end of said subsection, the following new sentence: "Upon the expiration of their terms of office members of the Board shall continue to serve until their successors are appointed and have qualified; and if at any time there shall be less than three members serving on the Board, all functions vested in or exercisable by the Board shall vest in and be exercisable by the member or members serving, and authority is hereby conferred on such remaining member or members to act by formal resolution or otherwise. The Board may from time to time make such provisions as it may deem appropriate for the exercise of its functions through meetings or otherwise and such provisions as it may deem appropriate authorizing the performance by any officer or employee of the Board or of the Federal Savings and Loan Insurance Corporation of any function of the Board or authorizing the performance by any such officer or employee of any function of said Corporation."; and (3) by adding to said section, at the end thereof, a new subsection to be lettered "(c)" and to read as follows:

"(c) In connection with any of their functions, and without regard to any provisions of law except those thereafter enacted expressly limiting this sentence, the Board and the Federal Savings and Loan Insurance Corporation, without limitation on the powers or authority otherwise vested in them, shall hereafter respectively have with respect to their financial transactions, including administrative and other expenses, their personnel, and their property, funds, and receipts, including procurement, disposal, custody, and disbursement thereof,

the powers and authority provided in section 19 of this Act and subsection (b) of section 402 of the National Housing Act (all of which powers and authority shall hereafter be vested both in said Board and in said Corporation) and the same powers and authority as the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation, respectively, now have, subject respectively to no other requirements, scrutiny, or review than are now applicable to said Board of Governors and said Federal Deposit Insurance Corporation, respectively. Notwithstanding the foregoing provisions of this subsection, title I of the Act of November 26, 1940 (54 Stat. 1211), and the Act of May 29, 1930 (46 Stat. 468), as now or hereafter in force, shall continue to be applicable except as the Board may otherwise determine upon a finding that such determination is necessary or advisable for the efficient conduct of operations."

Reasons

Amendment (1) is proposed for the reason that all of the existing language of subsection (a) relates solely to the original Federal Home Loan Bank Board and is now obsolete; the number, terms of office, and other matters relating to the present three-member Board are governed by Reorganization Plan No. 3 of 1947 and subdivision (b) of this section of the act. Amendment (2) is proposed for the purpose of affording continuity for the exercise of the functions of the Board and the Federal Savings and Loan Insurance Corporation, with clear statutory authorization for action otherwise than through formal meetings, and with provision for effective delegation of functions. Amendment (3) would recognize the fact that none of the funds used by the Board and the Insurance Corporation come from the United States Treasury or from the taxpayers, and the further fact that these agencies, with functions essentially comparable to those of the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation, have the same need as those agencies for the ability to incur proper expenditures without the necessity for annual budgeting and authorization and for freedom to operate without regard to restrictive statutes. It is to be noted, however, that under the language proposed they would remain subject to the Civil Service Act and the Civil Service Retirement Act except as the Board might otherwise determine upon a finding that departure therefrom was necessary or advisable for the efficient conduct of operations.

136. EXPENSES OF THE BOARD AND ASSESSMENTS ON THE BANK

Existing law

Section 18 of the Federal Home Loan Bank Act, as amended: "(a) There is hereby authorized to be appropriated the sum of not to exceed $300,000 for salaries, travel and subsistence expenses, rents, printing and binding, furniture and equipment, law books, books of reference, periodicals, newspapers, maps, contract stenographic reporting services, telephone and telegraph services, and all other necessary expenses of the board, together with expenses preliminary to the organization and establishment of the banks created hereunder, until the end of the fiscal year 1933.

"(b) The board shall have power to levy semiannually upon the Federal Home Loan Banks, and they shall pay, on such equitable basis as the board shall determine, an assessment sufficient in its judgment to provide for the payment of its estimated expenses for the half year succeeding the levying of each such assessment, beginning with the second half of the calendar year 1933. All expenses of the board incurred in carrying out the provisions of this Act, as determined by it, beginning July 1, 1933, shall be paid from the proceeds of such assessments, and if any deficiency shall occur in such fund at any time between such semiannual assessments the board shall have power to make an immediate assessment againt the banks to cover uch deficiency on the same basis as the original assessment. If any surplus shall remain from any assessment after the expiration of the semiannual period for which it was levied, such surplus may be deducted from the next following assessment." Recommendations

(1) Repeal subsection (a) and strike the language "(b)" at the beginning of subsection (b); (2) amend the first sentence of subsection (b) by striking the language "beginning with the second half of the calendar year 1933" and inserting in lieu thereof the language "(except to the extent that it is estimated that such expenses will be borne from other sources), including such amount as the Board

may include for the purpose of providing reasonable working capital, together with any deficit carried forward from the preceding half year"; (3) amend the second sentence of subsection (b) by striking all language preceding the word "if", and by amending said word to read "If"; and (4) amend the last sentence by striikng the language "the next" and inserting in lieu thereof the word "any". Reasons

Amendment (1) would remove an obsolete provision which merely provided for expenses until the end of the fiscal year 1933. Amendment (2) would strike obsolete language and insert in lieu thereof language intended to make clear that assessments on the banks may reflect in reduced amount the estimated expenses to be borne otherwise than from such assessments, such as examination fees paid by institutions examined, and to make clear that such assessments may include provision for reasonable working capital and for making good any deficit from the preceding half year (the language as to deficits is taken from sec. 10 of the Federal Reserve Act, as amended). Amendment (3) would remove obsolete language. Amendment (4) is proposed for the reason that, at least in some cases, it may be necessary to make the semiannual assessment on the Federal home loans banks before the existence or amount of a surplus from the next prior assessment can be definitely ascertained.

Existing law

137. POWERS AND DUTIES OF EXAMINERS

The last sentence of section 20 of the Federal Home Loan Bank Act, as amended:

"For the purposes of this Act, examiners appointed by the Board shall be subject to the same requirements, responsibilities, and penalties as are applicable to examiners under the National Bank Act and the Federal Reserve Act, and shall have, in the exercise of functions under this Act, the same powers and privileges as are vested in such examiners by law."

Recommendations

Amend this sentence (1) by inserting, after the comma following "this Act", the language "the Home Owners' Loan Act of 1933 as now or hereafter in force, or title IV of the National Housing Act so as in force", followed by a comma, and (2) by striking the language "functions under this Act" and inserting in lieu thereof the language "their functions".

Reasons

Examiners appointed by the Board exercise functions not only under the Federal Home Loan Bank Act but also under section 5 of the Home Owners' Loan Act of 1933 (relating to Federal savings and loan associations) and under title VI of the National Housing Act (relating to institutions the accounts of which are insured by the Federal Savings and Loan Insurance Corporation). The proposed amendments appropriately broaden the language of the sentence by recognition of these functions under the other two acts.

Existing law

138. INTERAGENCY SERVICES

Subsection (a) of section 22 of the Federal Home Loan Bank Act, as amended: "(a) In order to enable the board to carry out the provisions of this Act, the Treasury Department, the Comptroller of the Currency, the Federal Reserve Board, and the Federal reserve banks are hereby authorized, under such conditions as they may prescribe, to make available to the board in confidence for its use and the use of any Federal Home Loan Bank such reports, records, or other information as may be available, relating to the condition of institutions with respect to which any such Federal Home Loan Bank has had or contemplates having transactions under this Act or relating to persons whose obligations are offered to or held by any Federal Home Loan Bank, and to make through their examiners or other employees, for the confidential use of the board or any Federal Home Loan Bank, examinations of such institutions."

Recommendation

Amend subsection (a) by striking the language "Federal Reserve Board" and inserting in lieu thereof the language "Board of Governors of the Federal Reserve System".

Reason

To reflect in the act the present name of the board in question.

Existing law

139. INTERBANK ADJUSTMENTS

Section 26 of the Federal Home Loan Bank Act, as amended: "Whenever the board finds that the efficient and economical accomplishment of the purposes of this Act will be aided by such action, and in accordance with such rules, regulations, and orders as the board may prescribe, any Federal Home Loan Bank may be liquidated or reorganized, and its stock paid off and retired in whole or in part in connection therewith after paying or making provision for the payment of its liabilities. In the case of any such liquidation or reorganization, any other Federal Home Loan Bank may, with the approval of the board, acquire assets of any such liquidated or reorganized bank and assume liabilities thereof, in whole or in part."

Recommendation

Amend section 26 by inserting at the end thereof the following new sentence: "In case of the readjustment or creation of any district or districts, the Board may, subject to the provisions of subsection (b) of section 4, require such transfer of assets and membership, such assumption of liabilities, and such other adjustments as it may deem necessary or advisable, but notwithstanding this sentence or any other provision of law all debentures and bonds issued under subsections (b) and (c) of section 11 and from time to time outstanding shall at all times be the joint and several obligations of all Federal home-loan banks."

Reason

This amendment is proposed for the purpose of providing clear authority for the Board to make necessary adjustments in case of the readjustment or creation of any Federal home loan bank district or districts, at the same time making it clear that notwithstanding such adjustments any consolidated debentures or consolidated bonds are to be and remain the joint and several obligations of all Federal home loan banks.

Existing law

140. TERRITORIAL APPLICABILITY OF ACT

Section 29 of the Federal Home Loan Bank Act, as amended:

"That notwithstanding any provisions of law prohibiting bonds of the United States from bearing the circulation privilege, for a period of three years from the date of enactment of this Act all outstanding bonds of the United States heretofore issued or issued during such period, bearing interest at a rate not exceeding 3% per centum per annum, shall be receivable by the Treasurer of the United States as security for the issuance of circulating notes to national banking associations, and upon the deposit with the Treasurer of the United States by a national banking association of any such bonds, such association shall be entitled to receive circulating notes in the same manner and to the same extent and subject to the same conditions and limitations now provided by law in the case of 2 per centum gold bonds of the United States bearing the circulation privilege; except that the limitation contained in section 9 of the Act of July 12, 1882, as amended, with respect to the amount of lawful money which may be deposited with the Treasurer of the United States by national banking associations for the purpose of withdrawing bonds held as security for their circulating notes, shall not apply to the bonds of the United States to which the circulation privilege is extended by this section and which are held as security for such notes. Nothing contained in this section shall be construed to modify, amend, or repeal any law relating to bonds of the United States which now bear the circulation privilege.

"As used in this section, the word 'bonds' shall not include notes, certificates, or bills issued by the United States.

"There are hereby authorized to be appropriated such sums as may be necessary to carry out the provisions of this section."

Recommendation

Amend section 29 to read as follows:

"SEC. 29. Notwithstanding any other provision of law now or hereafter in force, the provisions of this Act shall apply to the several States, the District of Columbia, and the Territories and possessions of the United States."

Reason

This amendment is proposed in order to repeal the existing provisions of section 29, which are now obsolete, and to make clear that the act applies to all the States, to the District of Columbia, to Territories now existing or hereafter created, and to the possessions of the United States.

Existing law

HOME OWNERS' LOAN ACT OF 1933

141. REFERENCES TO HOME LOAN BANK BOARD

The Home Owners' Loan Act of 1933, as amended (too long for reproduction here).

Recommendation

Amend the Home Owners' Loan Act of 1933, as amended, by striking the language "Home Loan Bank Board", wherever the same appears therein, and inserting in lieu thereof in each place the word "Board".

Reason

References in the existing act to "Home Loan Bank Board" do not accurately reflect the name of the Board (the present Federal Home Loan Bank Board).

Existing law

142. DEFINITIONS

Section 2 of the Home Owners' Loan Act of 1933, as amended:

"As used in this Act

"(a) The term 'Board' means the Federal Home Loan Bank Board created under the Federal Home Loan Bank Act.

"(b) The term 'Corporation' means the Home Owners' Loan Corporation created under section 4 of this Act.

66

"(c) The term 'home mortgage' means a first mortgage on real estate in fee simple or on a leasehold (1) under a lease for not less than ninety-nine years which is renewable, or (2) under a lease having a period of not less than fifty years to run from the date the mortgage was executed, upon which there is located a dwelling or dwellings for not more than four families, which is used in whole or in part by the owner as a home or held by him as his homestead, and which has a value of not to exceed $20,000; and the term 'first mortgage' includes such classes of first liens as are commonly given to secure advances on real estate under the laws of the State in which the real estate is located, together with the credit instruments, if any, secured thereby.

"(d) The term 'association' means a Federal Savings and Loan Association chartered by the Board as provided in section 5 of this Act."

Recommendation

Amend section 2 as follows: (1) by striking all in subdivision (a) after "Federal Home Loan Bank Board" and before the period and inserting in lieu thereof the language "referred to in subsection (b) of section 17 of the Federal Home Loan Bank Act", and (2) by striking subdivison (b) and relettering subdivisions (c) and (d) as (b) and (c), respectively.

Reason

Existing references in the act to the original Federal Home Loan Bank Board created in 1932 by the Federal Home Loan Bank Act should now be changed to references to the present Federal Home Loan Bank Board created by Reorganization Plan No. 3 of 1947 and referred to in subsection (b) of section 17 of the Federal Home Loan Bank Act, as amended. Also, subdivision (b) is obsolete and should be deleted.