1 shall be declared only out of net earnings remaining after all 2 reserves and chargeoffs which may be required by the board 3 of directors have been provided for. Preferred stock, which 4 shall be issued only to Federal home loan banks, shall be 5 preferred as to the assets of the Corporation and shall be 6 entitled to cumulative preferred dividends at the rate of 2 7 per centum per annum of the outstanding amounts paid in 8 thereon, for the time that such amounts are outstanding. 9 Common stock shall be issued only in accordance with sec10 tion 5. No dividends shall be declared on common stock in 11 any semiannual period beginning January 1 or July 1 in excess of a total of 1 per centum of the par value thereof un13 less all preferred stock (except such preferred stock as is 14 included in the next to last sentence of subsection (d) of 15 this section) is accorded a pro rata participation to the extent 16 of such excess. Stock of each class shall be evidenced in such 17 manner, and shall be transferable only to such extent, to such 18 transferees, and in such manner, as the Corporation may pre19 scribe. Any amount of stock required or permitted by this 20 Act may be adjusted by the Corporation to the next higher or lower full share. 122 21 22 22 (b) The Federal home loan banks shall from time to 23 time subscribe, at such price not less than par as the Cor 24 poration shall from time to time fix, for such amounts of 25 preferred stock as the Corporation shall prescribe, and such 1 banks shall pay therefor at such time or times and in such 2 amount or amounts as may from time to time be fixed by 3 call of the Corporation. The amount of the payments for 4 which such banks may be obligated under such subscriptions 5 shall not exceed a cumulative total of $100,000,000. 6 (c) Subscriptions of the respective Federal home loan 7 banks to such stock shall be allocated by the Corporation in 8 proportion to the ratio which the outstanding amounts paid 9 in on capital stock of each of said banks at the end of the 10 calendar month which ends next prior to the date of the 11 enactment of this Act bears to the total of the outstanding amounts paid in on the capital stock of all of said banks at 13 the end of said calendar month. 12 (d) The Corporation at any time may retire all or any part of the stock of the Corporation, or may call for retirement all or any part of the stock of the Corporation by pub lishing a notice of the call in the Federal Register or in such other manner as the Corporation may determine and deposit ing with the Treasurer of the United States, for the purpose of such retirement, funds sufficient to effect such retirement: Provided, That no common stock shall be retired at any time when there is outstanding any preferred stock which has not been called for retirement: Provided further, That no call for the retirement of any stock shall be made, and no stock shall be retired without call, if, immediately after such 10 i action, the total of the stock not called for retirement and of 2 the reserves and surplus of the Corporation would be less 3 than $100,000,000. The retirement of stock shall be at the 4 par value thereof, or at the price at which such stock was 5 issued if such price is greater than such par value. No declara6 tion of any dividend on stock of the Corporation shall be 7 effective with respect to stock which at the time of such dec8 laration is the subject of an outstanding retirement call the 9 effective date of which has arrived. Notwithstanding any 10 other provision of this section, the Corporation, upon the 11 retirement of any preferred stock, shall become indebted to 12 the holder thereof for the amount of any unpaid cumulative 13 dividends thereon not theretofore declared. 14 15 MORTGAGE OPERATIONS 16 SEC. 5. (a) The Corporation is hereby authorized to purchase, and to make firm or other agreements or commit17 ments to purchase, residential mortgages from any member 18 of a Federal home loan bank, and to hold and deal with, and 19 sell or otherwise dispose of and make firm or other agree20 ments or commitments to sell or dispose of, any mortgage 21 or any interest therein. Any such purchase, and any such 22 sale or other disposition, may be with or without recourse 23 and may be upon such terms and conditions including without limitation on the generality of the foregoing such terms 25 and conditions as to resale or repurchase or as to guaranty, 24 11 1 substitution, or replacement as the Corporation may 2 prescribe. 3 (b) The terms of any such purchase or of any such 4 agreement or commitment to purchase, shall (except as here5 after provided in this section) require such member to pur6 chase from the Corporation common stock of the Corporation, 7 at par, in an amount equal to not less than 1 per centum of 8 the unpaid principal as determined by the Corporation by 9 regulations or otherwise, of the mortgage or mortgages pur10 chased. If at the time of any such purchase or at the time any 11 such agreement or commitment is made by the Corporation, 12 all stock of the Corporation has been retired or all outstanding 13 stock of the Corporation has been called for retirement, the 14 terms of such purchase or of such agreement or commitment 15 need not require such purchase of stock. The terms of any 16 such agreement or commitment may be such that if, at the 17 time of the purchase by the Corporation of the mortgage or mortgages involved, all stock of the Corporation has been 19 retired or all outstanding stock of the Corporation has been 20 called for retirement, such member shall not be required to 18 21 purchase stock. 22 2 22 24 (c) Legal authority to purchase, hold, and deal with or dispose of stock of the Corporation is hereby conferred on any Federal savings and loan association and on any Federal 12 1 home loan bank member as to which the Congress has power 2 to confer such authority. The Corporation is hereby author3 ized to accept a deposit of cash with it, or an agreement to 4 make such a deposit, in lieu of any purchase of stock or agree5 ment to purchase stock which would otherwise be required of 6 a Federal home loan bank member under this section, if such 7 member represents to it, or if the Corporation is of the 8 opinion, that such member does not have legal authority to 9 make such purchase or agreement to purchase. Any such de10 posit shall be upon such terms and conditions, including with 11 out limitation on the generality of the foregoing such terms 12 and conditions as to interest or other return on such deposit, 13 as the Corporation may prescribe, but the amount of any 14 such deposit shall not be less than an amount equal to 1 per centum of the unpaid principal, as determined by the Cor 15 16 poration, of the mortgage or mortgages involved, and any 17 such deposit shall be for a definite term, which shall not be 18 less than a period of two years beginning with the date on 19 which such deposit is made. Any such deposit may, prior to 20 its maturity, be retired or called for retirement in the same 21 manner as stock of the Corporation, but no deposit may be 222 23 so retired or called for retirement except at a time when common stock is being retired or called for retirement, unless 24 all stock of the Corporation has been retired or all outstand 25 ing stock of the Corporation has been called for retirement. 42-120 0-70- -3 |