12 U.S.C. § 1424 : US Code - Section 1424: Eligibility for membership

Search 12 U.S.C. § 1424 : US Code - Section 1424: Eligibility for membership

(a) Criteria for eligibility
(1) In general
Any building and loan association, savings and loan
association, cooperative bank, homestead association, insurance
company, savings bank, or any insured depository institution (as
defined in section 1422 of this title), shall be eligible to
become a member of a Federal Home Loan Bank if such institution -

(A) is duly organized under the laws of any State or of the
United States;
(B) is subject to inspection and regulation under the banking
laws, or under similar laws, of the State or of the United
States; and
(C) makes such home mortgage loans as, in the judgment of the
Board, are long-term loans (except that in the case of a
savings bank, this subparagraph applies only if, in the
judgment of the Board, its time deposits, as defined in section
461 of this title, warrant its making such loans).
(2) Qualified thrift lender
An insured depository institution that is not a member on
January 1, 1989, may become a member of a Federal Home Loan Bank
only if -
(A) the insured depository institution (other than a
community financial institution) has at least 10 percent of its
total assets in residential mortgage loans;
(B) the insured depository institution's financial condition
is such that advances may be safely made to such institution;
and
(C) the character of its management and its home-financing
policy are consistent with sound and economical home financing.
(3) Certain institutions
An insured depository institution commencing its initial
business operations after January 1, 1989, may become a member of
a Federal Home Loan Bank if it complies with regulations and
orders prescribed by the Board for the 10 percent asset
requirement (described in the (!1) paragraph (2)) within one year
after the commencement of its operations.
(4) Limited exemption for community financial institutions
A community financial institution that otherwise meets the
requirements of paragraph (2) may become a member without regard
to the percentage of its total assets that is represented by
residential mortgage loans, as described in subparagraph (A) of
paragraph (2).
(b) Location requirement
An institution eligible to become a member under this section may
become a member only of, or secure advances from, the Federal Home
Loan Bank of the district in which is located the institution's
principal place of business, or of the bank of a district adjoining
such district, if demanded by convenience and then only with the
approval of the Board.
(c) Inspection and regulation requirements
Notwithstanding the provisions of clause (2) of subsection (a) of
this section requiring inspection and regulation under law as a
condition with respect to eligibility for membership, any building
and loan association which would be eligible to become a member of
a Federal Home Loan Bank except for the fact that it is not subject
to inspection and regulation under the banking laws or similar laws
of the State in which such association is organized shall, upon
subjecting itself to such inspection and regulation as the Board
shall prescribe, be eligible to become a member.