12 C.F.R. PART 925—MEMBERS OF THE BANKS
Title 12 - Banks and Banking
Authority: 12 U.S.C. 1422, 1422a, 1422b, 1423, 1424, 1426, 1430, 1442.
Source: 58 FR 43542, Aug. 17, 1993, unless otherwise noted. Redesignated at 65 FR 8256, Feb. 18, 2000.
For purposes of this part: Adjusted net income means net income, excluding extraordinary items such as income received from, or expense incurred in, sales of securities or fixed assets, reported on a regulatory financial report. Aggregate unpaid loan principal means the aggregate unpaid principal of a subscriber's or member's home mortgage loans, home-purchase contracts and similar obligations. Allowance for loan and lease losses means a specified balance-sheet account held to fund potential losses on loans or leases, that is reported on a regulatory financial report. Appropriate regulator means a regulatory entity listed in §925.8, as applicable. Combination business or farm property means real property for which the total appraised value is attributable to residential, and business or farm uses. Community financial institution or CFI means an institution: (1) The deposits of which are insured under the Federal Deposit Insurance Act (12 U.S.C. 1811, et seq.); and (2) That has, as of the date of the transaction at issue, less than the community financial institution asset cap in total assets, based on an average of total assets over three years, which shall be calculated by the Bank based on the average of total assets drawn from the institution's regulatory financial reports filed with its appropriate regulator for the most recent calendar quarter and the immediately preceding 11 calendar quarters. Community financial institution asset cap means, for 2000, $500 million. Beginning in 2001 and for subsequent years, the cap shall be adjusted annually by the Finance Board to reflect any percentage increase in the preceding year's Consumer Price Index (CPI) for all urban consumers, as published by the U.S. Department of Labor. Each year, as soon as practicable after the publication of the previous year's CPI, the Finance Board shall publish notice by the Composite regulatory examination rating means a composite rating assigned to an institution following the guidelines of the Uniform Financial Institutions Rating System (Issued by the Federal Financial Institutions Examination Council; for availability contact the Federal Housing Finance Board, FOIA Office, 1777 F Street, NW., Washington, DC 20006), including a CAMEL rating, a MACRO rating, or other similar rating, contained in a written regulatory examination report. Consolidation includes a consolidation, a merger, or a purchase of all of the assets and assumption of all of the liabilities of an entity by another entity. Dwelling unit means a single room or a unified combination of rooms designed for residential use. Enforcement action means any written notice, directive, order or agreement initiated by an applicant for Bank membership or by its appropriate regulator to address any operational, financial, managerial or other deficiencies of the applicant identified by such regulator, but does not include a board of directors resolution adopted by the applicant in response to examination weaknesses identified by such regulator. Funded residential construction loan means the portion of a loan secured by real property made to finance the on-site construction of dwelling units on one-to-four family property or multifamily property disbursed to the borrower. Home mortgage loan means: (1) A loan, whether or not fully amortizing, or an interest in such a loan, which is secured by a mortgage, deed of trust, or other security agreement that creates a first lien on one of the following interests in property: (i) One-to-four family property or multifamily property, in fee simple; (ii) A leasehold on one-to-four family property or multifamily property under a lease of not less than 99 years that is renewable, or under a lease having a period of not less than 50 years to run from the date the mortgage was executed; or (iii) Combination business or farm property where at least 50 percent of the total appraised value of the combined property is attributable to the residential portion of the property or, in the case of any community financial institution, combination business or farm property, on which is located a permanent structure actually used as a residence (other than for temporary or seasonal housing), where the residence constitutes an integral part of the property; or (2) A mortgage pass-through security that represents an undivided ownership interest in: (i) Long-term loans, provided that, at the time of issuance of the security, all of the loans meet the requirements of paragraph (1) of this definition; or (ii) A security that represents an undivided ownership interest in long-term loans, provided that, at the time of issuance of the security, all of the loans meet the requirements of paragraph (1) of this definition. Insured depository institution means an insured depository institution as defined in section 2(12) of the Act (12 U.S.C. 1422(12)). Long-term means a term to maturity of five years or greater. Manufactured housing means a manufactured home as defined in section 603(6) of the Manufactured Home Construction and Safety Standards Act of 1974, as amended (42 U.S.C. 5402(6)). Multifamily property means: (1) Real property that is solely residential and includes five or more dwelling units; (2) Real property that includes five or more dwelling units combined with commercial units, provided that the property is primarily residential; or (3) Nursing homes, dormitories, or homes for the elderly. Nonperforming loans and leases means the sum of the following, reported on a regulatory financial report: (1) Loans and leases that have been past due for 90 days (60 days in the case of credit union applicants) or longer but are still accruing; (2) Loans and leases on a nonaccrual basis; and (3) Restructured loans and leases (not already reported as nonperforming). Nonresidential real property means real property that is not used for residential purposes, including business or industrial property, hotels, motels, churches, hospitals, educational and charitable institution buildings or facilities, clubs, lodges, association buildings, golf courses, recreational facilities, farm property not containing a dwelling unit, or similar types of property. One-to-four family property means: (1) Real property that is solely residential, including one-to-four family dwelling units or more than four family dwelling units if each dwelling unit is separated from the other dwelling units by dividing walls that extend from ground to roof, such as row houses, townhouses or similar types of property; (2) Manufactured housing if applicable state law defines the purchase or holding of manufactured housing as the purchase or holding of real property; (3) Individual condominium dwelling units or interests in individual cooperative housing dwelling units that are part of a condominium or cooperative building without regard to the number of total dwelling units therein; or (4) Real property which includes one-to-four family dwelling units combined with commercial units, provided the property is primarily residential. Other real estate owned means all other real estate owned (i.e., foreclosed and repossessed real estate), reported on a regulatory financial report, and does not include direct and indirect investments in real estate ventures. Regulatory examination report means a written report of examination prepared by the applicant's appropriate regulator, containing, in the case of insured depository institution applicants, a composite rating assigned to the institution following the guidelines of the Uniform Financial Institutions Rating System, including a CAMEL rating, a MACRO rating, or other similar rating. Regulatory financial report means a financial report that an applicant is required to file with its appropriate regulator on a specific periodic basis, including the quarterly call report for commercial banks, thrift financial report for savings associations, quarterly or semi-annual call report for credit unions, the National Association of Insurance Commissioners' annual or quarterly report for insurance companies, or other similar report, including such report maintained by the appropriate regulator on a computer on-line database. Residential mortgage loan means any one of the following types of loans, whether or not fully amortizing: (1) Home mortgage loans; (2) Funded residential construction loans; (3) Loans secured by manufactured housing whether or not defined by state law as secured by an interest in real property; (4) Loans secured by junior liens on one-to-four family property or multifamily property; (5) Mortgage pass-through securities representing an undivided ownership interest in: (i) Loans that meet the requirements of paragraphs (1) through (4) of this definition at the time of issuance of the security; (ii) Securities representing an undivided ownership interest in loans, provided that, at the time of issuance of the security, all of the loans meet the requirements of paragraphs (1) through (4) of this definition; or (iii) Mortgage debt securities as defined in paragraph (6) of this definition; (6) Mortgage debt securities secured by: (i) Loans, provided that, at the time of issuance of the security, substantially all of the loans meet the requirements of paragraphs (1) through (4) of this definition; (ii) Securities that meet the requirements of paragraph (5) of this definition; or (iii) Securities secured by assets, provided that, at the time of issuance of the security, all of the assets meet the requirements of paragraphs (1) through (5) of this definition; (7) Home mortgage loans secured by a leasehold interest, as defined in paragraph (1)(ii) of the definition of “home mortgage loan,” except that the period of the lease term may be for any duration; or (8) Loans that finance properties or activities that, if made by a member, would satisfy the statutory requirements for the CIP established under section 10(i) of the Act (12 U.S.C. 1430(i)), or the regulatory requirements established for any CICA program. Total assets means the total assets reported on a regulatory financial report. [67 FR 12846, Mar. 20, 2002] Source: 61 FR 42543 Aug. 16, 1996, unless otherwise noted.
(a) Application. An applicant for membership in a Bank shall submit to that Bank an application that satisfies the requirements of this part. The application shall include a written resolution or certification duly adopted by the applicant's board of directors, or by an individual with authority to act on behalf of the applicant's board of directors, of the following: (1) Applicant review. Applicant has reviewed the requirements of this part and, as required by this part, has provided to the best of applicant's knowledge the most recent, accurate and complete information available; and (2) Duty to supplement. Applicant will promptly supplement the application with any relevant information that comes to applicant's attention prior to the Bank's decision on whether to approve or deny the application, and if the Bank's decision is appealed pursuant to §925.5 of this part, prior to resolution of any appeal by the Finance Board. (b) Digest. The Bank shall prepare a written digest for each applicant stating whether or not the applicant meets each of the requirements in §§925.6 to 925.18 of this part, the Bank's findings and the reasons therefor. (c) File. The Bank shall maintain a membership file for each applicant for at least three years after the Bank decides whether to approve or deny membership and the resolution of any appeal to the Finance Board. The membership file shall contain at a minimum: (1) Digest. The digest required by paragraph (b) of this section. (2) Required documents. All documents required by §§925.6 to 925.18 of this part, including those documents required to establish or rebut a presumption under this part, shall be described in and attached to the digest. The Bank may retain in the file only the relevant portions of the regulatory financial reports required by this part. If an applicant's appropriate regulator requires return or destruction of a regulatory examination report, the date that the report is returned or destroyed shall be noted in the file. (3) Additional documents. Any additional document submitted by the applicant, or otherwise obtained or generated by the Bank, concerning the applicant. (4) Decision resolution. The decision resolution described in §925.3(b) of this part. [61 FR 42543, Aug. 16, 1996, as amended at 63 FR 40023, July 27, 1998; 65 FR 8261, Feb. 18, 2000; 70 FR 9510, Feb. 28, 2005] (a) Authority. The Finance Board authorizes the Banks to approve or deny all applications for membership, subject to the requirements of this part. The Bank may delegate the authority to approve membership applications only to a committee of the Bank's board of directors, the Bank president, or a senior officer who reports directly to the Bank president other than an officer with responsibility for business development. (b) Decision resolution. For each applicant, the Bank shall prepare a written resolution duly adopted by the Bank's board of directors, by a committee of the board of directors, or by an officer with delegated authority to approve membership applications. The decision resolution shall state: (1) That the statements in the digest are accurate to the best of the Bank's knowledge, and are based on a diligent and comprehensive review of all available information identified in the digest; and (2) The Bank's decision and the reasons therefor. Decisions to approve an application should state specifically that: the applicant is authorized under the laws of the United States and the laws of the appropriate state to become a member of, purchase stock in, do business with, and maintain deposits in, the Bank to which the applicant has applied; and the applicant meets all of the membership eligibility criteria of the Act and this part. (c) Action on applications. The Bank shall act on an application within 60 calendar days of the date the Bank deems the application to be complete. An application is “complete” when a Bank has obtained all the information required by this part, and any other information the Bank deems necessary, to process the application. If an application that was deemed complete subsequently is deemed incomplete because the Bank determines during the review process that additional information is necessary to process the application, the Bank may stop the 60-day clock until the application again is deemed complete, and then resume the clock where it left off. The Bank shall notify an applicant in writing when its application is deemed by the Bank to be complete, and shall maintain a copy of such letter in the applicant's membership file. The Bank shall notify an applicant if the 60-day clock is stopped, and when the clock is resumed, and shall maintain a written record of such notifications in the applicant's membership file. Within 3 business days of a Bank's decision on an application, the Bank shall provide the applicant and the Finance Board's Secretary to the Board with a copy of the Bank's decision resolution. [61 FR 42543, Aug. 16, 1996, as amended at 63 FR 40023, July 27, 1998; 65 FR 8261, Feb. 18, 2000; 67 FR 12848, Mar. 20, 2002; 70 FR 9510, Feb. 28, 2005] (a) Automatic membership for certain charter conversions. An insured depository institution member that converts from one charter type to another automatically shall become a member of the Bank of which the converting institution was a member on the effective date of such conversion, provided that the converting institution continues to be an insured depository institution and the assets of the institution immediately before and immediately after the conversion are not materially different. In such case, all relationships existing between the member and the Bank at the time of such conversion may continue. (b) Automatic membership for transfers. Any member whose membership is transferred pursuant to §925.18(d) of this part automatically shall become a member of the Bank to which it transfers. (c) Automatic membership, in the Bank's discretion, for certain consolidations. (1) If a member institution (or institutions) and a nonmember institution are consolidated and the consolidated institution has its principal place of business in a state in the same Bank district as the disappearing institution (or institutions), and the consolidated institution will operate under the charter of the nonmember institution, on the effective date of the consolidation, the consolidated institution may, in the discretion of the Bank of which the disappearing institution (or institutions) was a member immediately prior to the effective date of the consolidation, automatically become a member of such Bank upon the purchase of stock in that Bank pursuant to §925.20, provided that: (i) 90 percent or more of the total assets of the consolidated institution are derived from the total assets of the disappearing member institution (or institutions); and (ii) The consolidated institution provides written notice to such Bank, within 60 calendar days after the effective date of the consolidation, that it desires to be a member of the Bank. (2) The provisions of §925.25(b)(4)(i) shall apply, and upon approval of automatic membership by the Bank, the provisions of §§925.24(c) and (d) shall apply. [61 FR 42543, Aug. 16, 1996, as amended at 63 FR 40024, July 27, 1998; 65 FR 8261, Feb. 18, 2000; 65 FR 13870, Mar. 15, 2000; 67 FR 12848, Mar. 20, 2002] (a) Appeals by applicants—(1) Filing procedure. Within 90 calendar days of the date of a Bank's decision to deny an application for membership, the applicant may file a written appeal of the decision with the Finance Board. (2) Documents. The applicant's appeal shall be addressed to the Secretary to the Board, Federal Housing Finance Board, 1777 F Street, NW., Washington, DC 20006, with a copy to the Bank, and shall include the following documents: (i) Bank's decision resolution. A copy of the Bank's decision resolution; and (ii) Basis for appeal. A statement of the basis for the appeal by the applicant with sufficient facts, information, analysis and explanation to rebut any applicable presumptions and otherwise support the applicant's position. (b) Record for appeal—(1) Copy of membership file. Upon receiving a copy of an appeal, the Bank whose action has been appealed (appellee Bank) shall provide the Finance Board with a copy of the applicant's complete membership file. Until the Finance Board resolves the appeal, the appellee Bank shall supplement the materials provided to the Finance Board as any new materials are received. (2) Additional information. The Finance Board may request additional information or further supporting arguments from the appellant, the appellee Bank or any other party that the Finance Board deems appropriate. (c) Deciding appeals. The Finance Board shall consider the record for appeal described in paragraph (b) of this section and shall resolve the appeal based on the requirements of the Act and this part within 90 calendar days of the date the appeal is filed with the Finance Board. In deciding the appeal, the Finance Board shall apply the presumptions in this part, unless the appellant or appellee Bank presents evidence to rebut a presumption as provided in §925.17 of this part. [61 FR 42543, Aug. 16, 1996, as amended at 65 FR 8261, Feb. 18, 2000; 67 FR 12848, Mar. 20, 2002; 70 FR 9510, Feb. 28, 2005] Source: 61 FR 42545, Aug. 16, 1996, unless otherwise noted.
(a) Requirements. Any building and loan association, savings and loan association, cooperative bank, homestead association, insurance company, savings bank, or insured depository institution, upon application satisfying all of the requirements of the Act and this part, shall be eligible to become a member of a Bank if: (1) It is duly organized under the laws of any State or of the United States; (2) It is subject to inspection and regulation under the banking laws, or under similar laws, of any State or of the United States; (3) It makes long-term home mortgage loans; (4) Its financial condition is such that advances may be safely made to it; (5) The character of its management is consistent with sound and economical home financing; and (6) Its home financing policy is consistent with sound and economical home financing. (b) Additional eligibility requirement for insured depository institutions other than community financial institutions. In order to be eligible to become a member of a Bank, an insured depository institution applicant other than a community financial institution also must have at least 10 percent of its total assets in residential mortgage loans. (c) Additional eligibility requirement for applicants that are not insured depository institutions. In order to be eligible to become a member of a Bank, an applicant that is not an insured depository institution also must have mortgage-related assets that reflect a commitment to housing finance, as determined by the Bank in its discretion. (d) Ineligibility. Except as otherwise provided in this part, if an applicant does not satisfy the requirements of this part, the applicant is ineligible for membership. [61 FR 42545, Aug. 16, 1996, as amended at 65 FR 13870, Mar. 15, 2000; 70 FR 9510, Feb. 28, 2005] An applicant shall be deemed to be duly organized as required by section 4(a)(1)(A) of the Act (12 U.S.C. 1424(a)(1)(A)) and §925.6(a)(1) of this part, if it is chartered by a state or federal agency as a building and loan association, savings and loan association, cooperative bank, homestead association, insurance company, savings bank or insured depository institution. [61 FR 42545, Aug. 16, 1996, as amended at 65 FR 8261, Feb. 18, 2000; 67 FR 12848, Mar. 20, 2002; 70 FR 9510, Feb. 28, 2005] An applicant shall be deemed to be subject to inspection and regulation as required by section 4(a)(1)(B) of the Act (12 U.S.C. 1424(a)(1)(B)) and §925.6(a)(2) of this part, if, in the case of a depository institution applicant, it is subject to inspection and regulation by the FDIC, FRB, NCUA, OCC, OTS, or other appropriate state regulator, and, in the case of an insurance company applicant, it is subject to inspection and regulation by an appropriate state regulator accredited by the National Association of Insurance Commissioners. [61 FR 42545, Aug. 16, 1996, as amended at 65 FR 8261, Feb. 18, 2000; 67 FR 12848, Mar. 20, 2002; 70 FR 9510, Feb. 28, 2005] An applicant shall be deemed to make long-term home mortgage loans as required by section 4(a)(1)(C) of the Act (12 U.S.C. 1424(a)(1)(C)) and §925.6(a)(3) of this part, if, based on the applicant's most recent regulatory financial report filed with its appropriate regulator, the applicant originates or purchases long-term home mortgage loans. [61 FR 42545, Aug. 16, 1996, as amended at 63 FR 40023, July 27, 1998; 65 FR 8261, Feb. 18, 2000; 67 FR 12848, Mar. 20, 2002; 70 FR 9510, Feb. 28, 2005] An insured depository institution applicant that is subject to the 10 percent requirement of section 4(a)(2)(A) of the Act (12 U.S.C. 1424(a)(2)(A))and section 925.6(b) of this part, shall be deemed to be in compliance with such requirement if, based on the applicant's most recent regulatory financial report filed with its appropriate regulator, the applicant has at least 10 percent of its total assets in residential mortgage loans, except that any assets used to secure mortgage debt securities as described in paragraph (6) of the definition of “residential mortgage loan” set forth in §925.1 of this part shall not be used to meet this requirement. [65 FR 13870, Mar. 15, 2000, as amended at 67 FR 12848, Mar. 20, 2002] (a) Review requirement. In determining whether an applicant other than an insurance company has complied with the financial condition requirement of section 4(a)(2)(B) of the Act (12 U.S.C. 1424(a)(2)(B)) and §925.6(a)(4) of this part, the Bank shall obtain as a part of the membership application and review each of the following documents: (1) Regulatory financial reports. The regulatory financial reports filed by the applicant with its appropriate regulator for the last six calendar quarters and three year-ends preceding the date the Bank receives the application; (2) Financial statement. In order of preference: the most recent independent audit of the applicant conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the applicant; the most recent independent audit of the applicant's parent holding company conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the consolidated holding company but not on the applicant separately; the most recent Directors' examination of the applicant conducted in accordance with generally accepted auditing standards by a certified public accounting firm; the most recent Directors' examination of the applicant performed by other external auditors; the most recent review of the applicant's financial statements by external auditors; the most recent Compilation of the applicant's financial statements by external auditors; or the most recent audit of other procedures of the applicant; (3) Regulatory examination report. The applicant's most recent available regulatory examination report prepared by its appropriate regulator, a summary prepared by the Bank of the applicant's strengths and weaknesses as cited in the regulatory examination report, and a summary prepared by the Bank or applicant of actions taken by the applicant to respond to examination weaknesses; (4) Enforcement actions. A description prepared by the Bank or applicant of any outstanding enforcement actions against the applicant, responses by the applicant, reports as required by the enforcement action, and verbal or written indications, if available, from the appropriate regulator of how the applicant is complying with the terms of the enforcement action; and (5) Additional information. Any other relevant document or information concerning the applicant that comes to the Bank's attention in reviewing the applicant's financial condition. (b) Standards. An applicant other than an insurance company shall be deemed to be in compliance with the financial condition requirement of section 4(a)(2)(B) of the Act (12 U.S.C. 1424(a)(2)(B)) and §925.6(a)(4) of this part, if: (1) Recent composite regulatory examination rating. The applicant has received a composite regulatory examination rating from its appropriate regulator within two years preceding the date the Bank receives the application; (2) Capital requirement. The applicant meets all of its minimum statutory and regulatory capital requirements as reported in its most recent quarter-end regulatory financial report filed with its appropriate regulator; and (3) Minimum performance standard. (i) The applicant's most recent composite regulatory examination rating from its appropriate regulator within the past two years was “1;” or was “2” or “3” and, based on the applicant's most recent regulatory financial report filed with its appropriate regulator, the applicant satisfied all of the following performance trend criteria: (A) Earnings. The applicant's adjusted net income was positive in four of the six most recent calendar quarters; (B) Nonperforming assets. The applicant's nonperforming loans and leases plus other real estate owned, did not exceed 10 percent of its total loans and leases plus other real estate owned, in the most recent calendar quarter; and (C) Allowance for loan and lease losses. The applicant's ratio of its allowance for loan and lease losses plus the allocated transfer risk reserve to nonperforming loans and leases was 60 percent or greater during 4 of the 6 most recent calendar quarters. (ii) For applicants that are not required to report financial data to their appropriate regulator on a quarterly basis, the information required in paragraph (b)(3)(i) of this section may be reported on a semiannual basis. (c) Eligible collateral not considered. The availability of sufficient eligible collateral to secure advances to the applicant is presumed and shall not be considered in determining whether an applicant is in the financial condition required by section 4(a)(2)(B) of the Act (12 U.S.C. 1424(a)(2)(B)) and §925.6(a)(4) of this part. [61 FR 42545, Aug. 16, 1996, as amended at 63 FR 40023, 40024, July 27, 1998; 65 FR 8261, Feb. 18, 2000; 67 FR 12848, Mar. 20, 2002; 70 FR 9510, Feb. 28, 2005] An applicant shall be deemed to be in compliance with the character of management requirement of section 4(a)(2)(C) of the Act (12 U.S.C. 1424(a)(2)(C)) and §925.6(a)(5) of this part, if the applicant provides to the Bank an unqualified written certification duly adopted by the applicant's board of directors, or by an individual with authority to act on behalf of the applicant's board of directors, that: (a) Enforcement actions. Neither the applicant nor any of its directors or senior officers is subject to, or operating under, any enforcement action instituted by its appropriate regulator; (b) Criminal, civil or administrative proceedings. Neither the applicant nor any of its directors or senior officers has been the subject of any criminal, civil or administrative proceedings reflecting upon creditworthiness, business judgment, or moral turpitude since the most recent regulatory examination report; and (c) Criminal, civil or administrative monetary liabilities, lawsuits or judgments. There are no known potential criminal, civil or administrative monetary liabilities, material pending lawsuits, or unsatisfied judgments against the applicant or any of its directors or senior officers since the most recent regulatory examination report, that are significant to the applicant's operations. [61 FR 42545, Aug. 16, 1996, as amended at 63 FR 40023, July 27, 1998; 65 FR 8261, Feb. 18, 2000; 67 FR 12848, Mar. 20, 2002; 70 FR 9510, Feb. 28, 2005] (a) Standard. An applicant shall be deemed to be in compliance with the home financing policy requirement of section 4(a)(2)(C) of the Act (12 U.S.C. 1424(a)(2)(C)) and §925.6(a)(6) of this part, if the applicant has received a Community Reinvestment Act (CRA) rating of “Satisfactory” or better on its most recent formal, or if unavailable, informal or preliminary, CRA performance evaluation. (b) Written justification required. An applicant that is not subject to the CRA shall file as part of its application for membership a written justification acceptable to the Bank of how and why the applicant's home financing policy is consistent with the Bank System's housing finance mission. [61 FR 42545, Aug. 16, 1996, as amended at 65 FR 8261, Feb. 18, 2000; 67 FR 12848, Mar. 20, 2002; 70 FR 9510, Feb. 28, 2005] (a) Duly organized, subject to inspection and regulation, financial condition and character of management requirements. An insured depository institution applicant whose date of charter approval is within three years prior to the date the Bank receives the applicant's application for membership in the Bank (de novo applicant) is deemed to meet the requirements of §§925.7, 925.8, 925.11 and 925.12. (b) Makes long-term home mortgage loans requirement. A de novo applicant shall be deemed to make long-term home mortgage loans as required by §925.9 if it has filed as part of its application for membership a written justification acceptable to the Bank of how its home financing credit policy and lending practices will include originating or purchasing long-term home mortgage loans. (c) 10 percent requirement—(1) One-year requirement. A de novo applicant that is subject to the 10 percent requirement of section 4(a)(2)(A) of the Act (12 U.S.C. 1424(a)(2)(A)) and §925.6(b) shall have until one year after commencing its initial business operations to meet the 10 percent requirement of §925.10. (2) Conditional approval. A de novo applicant shall be conditionally deemed to be in compliance with the 10 percent requirement of section 4(a)(2)(A) of the Act (12 U.S.C. 1424(a)(2)(A)) and §925.6(b). A de novo applicant that receives such conditional membership approval is subject to the stock purchase requirements of §925.20 and the advances provisions of part 950 of this chapter. (3) Approval. A de novo applicant shall be deemed to be in compliance with the 10 percent requirement of section 4(a)(2)(A) of the Bank Act (12 U.S.C. 1424(a)(2)(A)) and §925.6(b) upon receipt by the Bank from the applicant, within one year after commencement of the applicant's initial business operations, of evidence acceptable to the Bank that the applicant satisfies the 10 percent requirement. (4) Conditional approval deemed null and void. If the requirements of paragraph (c)(3) of this section are not satisfied, a de novo applicant shall be deemed to be in noncompliance with the 10 percent requirement of section 4(a)(2)(A) of the Act (12 U.S.C. 1424(a)(2)(A)) and §925.6(b), and its conditional membership approval is deemed null and void. (5) Treatment of outstanding advances and Bank stock. If a de novo applicant's conditional membership approval is deemed null and void pursuant to paragraph (c)(4) of this section, the liquidation of any outstanding indebtedness owed by the applicant to the Bank and redemption of stock of such Bank shall be carried out in accordance with §925.29. (d) Home financing policy requirement—(1) Conditional approval. A de novo applicant that has not received its first formal, or, if unavailable, informal or preliminary, Community Reinvestment Act (CRA) performance evaluation, shall be conditionally deemed to be in compliance with the home financing policy requirement of section 4(a)(2)(C) of the Act (12 U.S.C. 1424(a)(2)(C)) and §925.6(a)(6), if the applicant has filed as part of its application for membership a written justification acceptable to the Bank of how and why its home financing credit policy and lending practices will meet the credit needs of its community. An applicant that receives such conditional membership approval is subject to the stock purchase requirements of §925.20 and the advances provisions of part 950 of this chapter. (2) Approval. A de novo applicant that has been granted conditional approval under paragraph (d)(1) of this section shall be deemed to be in compliance with the home financing policy requirement of section 4(a)(2)(C) of the Act (12 U.S.C. 1424(a)(2)(C)) and §925.6(a)(6) upon receipt by the Bank of evidence from the applicant that it received a CRA rating of “Satisfactory” or better on its first formal, or if unavailable, informal or preliminary, CRA performance evaluation. (3) Conditional approval deemed null and void. If the de novo applicant's first such CRA rating is “Needs to Improve” or “Substantial Non-Compliance,” the applicant shall be deemed to be in noncompliance with the home financing policy requirement of section 4(a)(2)(C) of the Act (12 U.S.C. 1424(a)(2)(C)) and §925.6(a)(6), subject to rebuttal by the applicant under §925.17(f), and its conditional membership approval is deemed null and void. (4) Treatment of outstanding advances and Bank stock. If the applicant's conditional membership approval is deemed null and void pursuant to paragraph (d)(3) of this section, the liquidation of any outstanding indebtedness owed by the applicant to the Bank and redemption of stock of such Bank shall be carried out in accordance with §925.29. [67 FR 12848, Mar. 20, 2002] An applicant that merged with or acquired another institution prior to the date the Bank receives its application for membership is subject to the requirements of §§925.7 to 925.13 of this part except as provided in this section. (a) Financial condition requirement—(1) Regulatory financial reports. For purposes of §925.11(a)(1) of this part, an applicant that, as a result of a merger or acquisition preceding the date the Bank receives its application for membership, has not yet filed regulatory financial reports with its appropriate regulator for the last six calendar quarters and three year-ends preceding such date, shall provide any regulatory financial reports that the applicant has filed with its appropriate regulator. (2) Performance trend criteria. For purposes of §925.11(b)(3)(i) (A) to (C) of this part, an applicant that, as a result of a merger or acquisition preceding the date the Bank receives its application for membership, has not yet filed combined regulatory financial reports with its appropriate regulator for the last six calendar quarters preceding such date, shall provide pro forma combined financial statements for those calendar quarters in which actual combined regulatory financial reports are unavailable. (b) Home financing policy requirement. For purposes of §925.13 of this part, an applicant that, as a result of a merger or acquisition preceding the date the Bank receives its application for membership, has not received its first formal, or if unavailable, informal or preliminary, Community Reinvestment Act performance evaluation, shall file as part of its application a written justification acceptable to the Bank of how and why the applicant's home financing credit policy and lending practices will meet the credit needs of its community. (c) Makes long-term home mortgage loans requirement; 10 percent requirement. For purposes of determining compliance with §§925.9 and 925.10, a Bank may, in its discretion, permit an applicant that, as a result of a merger or acquisition preceding the date the Bank receives its application for membership, has not yet filed a consolidated regulatory financial report as a combined entity with its appropriate regulator, to provide the combined pro forma financial statement for the combined entity filed with the regulator that approved the merger or acquisition. [61 FR 42545, Aug. 16, 1996, as amended at 63 FR 40023, 40024, July 27, 1998; 65 FR 8261, Feb. 18, 2000; 70 FR 9510, Feb. 28, 2005] An insurance company applicant shall be deemed to meet the financial condition requirement of section 4(a)(2)(B) of the Act (12 U.S.C. 1424(a)(2)(B)) and §925.6(a)(4) of this part, if, based on the information contained in the applicant's most recent regulatory financial report filed with its appropriate regulator, the applicant meets all of its minimum statutory and regulatory capital requirements and the capital standards established by the National Association of Insurance Commissioners. [61 FR 42545, Aug. 16, 1996, as amended at 63 FR 40023, July 27, 1998; 65 FR 8261, Feb. 18, 2000; 67 FR 12849, Mar. 20, 2002; 70 FR 9510, Feb. 28, 2005] (a) Rebutting presumptive compliance. The presumption that an applicant meeting the requirements of §§925.7 to 925.16 of this part is in compliance with section 4(a) of the Act (12 U.S.C. 1424(a)) and §925.6 (a) and (b) of this part, may be rebutted, and the Bank may deny membership to the applicant, if the Bank obtains substantial evidence to overcome the presumption of compliance. (b) Rebutting presumptive noncompliance. The presumption that an applicant not meeting a particular requirement of §§925.8, 925.11, 925.12, 925.13, or 925.16 of this part is in noncompliance with section 4(a) of the Act (12 U.S.C. 1424(a)) and §925.6(a)(2), (4), (5), or (6) of this part, may be rebutted, and the applicant shall be deemed to meet such requirement, if the applicable requirements in this section are satisfied. (c) Presumptive noncompliance by insurance company applicant with “subject to inspection and regulation” requirement of §925.8. If an insurance company applicant is not subject to inspection and regulation by an appropriate state regulator accredited by the National Association of Insurance Commissioners (NAIC), as required by §925.8 of this part, the applicant or the Bank shall prepare a written justification that provides substantial evidence acceptable to the Bank that the applicant is subject to inspection and regulation as required by §925.6(a)(2) of this part, notwithstanding the lack of NAIC accreditation. (d) Presumptive noncompliance with financial condition requirements of §§925.11 and 925.16—(1) Applicants other than insurance companies. For applicants other than insurance companies, in the case of an applicant's lack of a composite regulatory examination rating within the two-year period required by §925.11(b)(1) of this part, a variance from the rating required by §925.11(b)(3)(i) of this part, or a variance from a performance trend criterion required by §925.11(b)(3)(i) of this part, the applicant or the Bank shall prepare a written justification pertaining to such requirement that provides substantial evidence acceptable to the Bank that the applicant is in the financial condition required by §925.6(a)(4) of this part, notwithstanding the lack of rating or variance. (2) Insurance company applicants. In the case of an insurance company applicant's variance from a capital requirement or standard of §925.16 of this part, the applicant or the Bank shall prepare a written justification pertaining to such requirement or standard that provides substantial evidence acceptable to the Bank that the applicant is in the financial condition required by §925.6(a)(4) of this part, notwithstanding the variance. (e) Presumptive noncompliance with character of management requirement of §925.12—(1) Enforcement actions. If an applicant or any of its directors or senior officers is subject to, or operating under, any enforcement action instituted by its appropriate regulator, the applicant shall provide or the Bank shall obtain: (i) Regulator confirmation. Written or verbal confirmation from the applicant's appropriate regulator that the applicant or its directors or senior officers are in substantial compliance with all aspects of the enforcement action; or (ii) Written analysis. A written analysis acceptable to the Bank indicating that the applicant or its directors or senior officers are in substantial compliance with all aspects of the enforcement action. The written analysis shall state each action the applicant or its directors or senior officers are required to take by the enforcement action, the actions actually taken by the applicant or its directors or senior officers, and whether the applicant regards this as substantial compliance with all aspects of the enforcement action. (2) Criminal, civil or administrative proceedings. If an applicant or any of its directors or senior officers has been the subject of any criminal, civil or administrative proceedings reflecting upon creditworthiness, business judgment, or moral turpitude since the most recent regulatory examination report, the applicant shall provide or the Bank shall obtain: (i) Regulator confirmation. Written or verbal confirmation from the applicant's appropriate regulator that the proceedings will not likely result in enforcement action; or (ii) Written analysis. A written analysis acceptable to the Bank indicating that the proceedings will not likely result in enforcement action. The written analysis shall state the severity of the charges, and any mitigating action taken by the applicant or its directors or senior officers. (3) Criminal, civil or administrative monetary liabilities, lawsuits or judgments. If there are any known potential criminal, civil or administrative monetary liabilities, material pending lawsuits, or unsatisfied judgments against the applicant or any of its directors or senior officers since the most recent regulatory examination report, that are significant to the applicant's operations, the applicant shall provide or the Bank shall obtain: (i) Regulator confirmation. Written or verbal confirmation from the applicant's appropriate regulator that the liabilities, lawsuits or judgments will not likely cause the applicant to fall below its applicable capital requirements set forth in §§925.11(b)(2) and 925.16 of this part; or (ii) Written analysis. A written analysis acceptable to the Bank indicating that the liabilities, lawsuits or judgments will not likely cause the applicant to fall below its applicable capital requirements set forth in §§925.11(b)(2) and 925.16 of this part. The written analysis shall state the likelihood of the applicant or its directors or senior officers prevailing, and the financial consequences if the applicant or its directors or senior officers do not prevail. (f) Presumptive noncompliance with home financing policy requirements of §§925.13 and 925.14(d). If an applicant received a “Substantial Non-Compliance” rating on its most recent formal, or if unavailable, informal or preliminary, Community Reinvestment Act (CRA) performance evaluation, or a “Needs to Improve” CRA rating on its most recent formal, or if unavailable, informal or preliminary, CRA performance evaluation and a CRA rating of “Needs to Improve” or better on any immediately preceding CRA performance evaluation, the applicant shall provide or the Bank shall obtain: (1) Regulator confirmation. Written or verbal confirmation from the applicant's appropriate regulator of the applicant's recent satisfactory CRA performance, including any corrective action that substantially improved upon the deficiencies cited in the most recent CRA performance evaluation(s); or (2) Written analysis. A written analysis acceptable to the Bank demonstrating that the CRA rating is unrelated to home financing, and providing substantial evidence of how and why the applicant's home financing credit policy and lending practices meet the credit needs of its community. [61 FR 42545, Aug. 16, 1996, as amended at 63 FR 40023, July 27, 1998; 65 FR 8261, Feb. 18, 2000; 67 FR 12849, Mar. 20, 2002; 70 FR 9510, Feb. 28, 2005] (a) Eligibility. (1) An institution eligible to become a member of a Bank under the Act and this part may become a member only of the Bank of the district in which the institution's principal place of business is located, except as provided in paragraph (a)(2) of this section. A member shall promptly notify its Bank in writing whenever it relocates its principal place of business to another state and the Bank shall inform the Finance Board in writing of any such relocation. (2) An institution eligible to become a member of a Bank under the Act and this part may become a member of the Bank of a district adjoining the district in which the institution's principal place of business is located, if demanded by convenience and then only with the approval of the Finance Board. (b) Principal place of business. Except as otherwise designated in accordance with this section, the principal place of business of an institution is the state in which the institution maintains its home office established as such in conformity with the laws under which the institution is organized. (c) Designation of principal place of business. (1) A member or an applicant for membership may request in writing to the Bank in the district where the institution maintains its home office that a state other than the state in which it maintains its home office be designated as its principal place of business. Within 90 calendar days of receipt of such written request, the board of directors of the Bank in the district where the institution maintains its home office shall designate a state other than the state where the institution maintains its home office as the institution's principal place of business, provided all of the following criteria are satisfied: (i) At least 80 percent of the institution's accounting books, records and ledgers are maintained, located or held in such designated state; (ii) A majority of meetings of the institution's board of directors and constituent committees are conducted in such designated state; and (iii) A majority of the institution's five highest paid officers have their place of employment located in such designated state. (2) Written notice of a designation made pursuant to paragraph (c)(1) of this section shall be sent to the Bank in the district containing the designated state, the Finance Board and the institution. (3) The notice of designation made pursuant to paragraph (c)(1) of this section shall include the state designated as the principal place of business and the resulting Bank to which membership will be transferred. (4) If the board of directors of the Bank in the district where the institution maintains its home office fails to make the designation requested by the member or applicant pursuant to paragraph (c)(1) of this section, then the member or applicant may request in writing that the Finance Board make the designation. (d) Transfer of membership. (1) No transfer of membership from one Bank to another Bank shall take effect until the Banks involved reach agreement on a method of orderly transfer. (2) In the event that the Banks involved fail to agree on a method of orderly transfer, the Finance Board shall determine the conditions under which the transfer shall take place. (e) Effect of transfer. A transfer of membership pursuant to this section shall be effective for all purposes, but shall not affect voting rights in the year of the transfer and shall not be subject to the provisions on termination of membership set forth in section 6 of the Act (12 U.S.C. 1426) or §§925.26 and 925.27, nor the restriction on reacquiring Bank membership set forth in §925.30. [61 FR 42545, Aug. 16, 1996, as amended at 63 FR 65692, Nov. 30, 1998; 65 FR 8261, Feb. 18, 2000; 65 FR 13870, Mar. 15, 2000; 67 FR 12849, Mar. 20, 2002; 70 FR 9510, Feb. 28, 2005] Source: 58 FR 43542, Aug. 17, 1993, unless otherwise noted. Redesignated at 61 FR 42542, Aug. 16, 1996.
The capital stock of each Bank shall be sold at par, unless the Board has fixed a higher price. (a) Minimum stock purchase. Each member shall purchase stock in the Bank in which it is a member in an amount equal to the greater of: (1) $500; (2) 1 percent of the member's aggregate unpaid loan principal; or (3) 5 percent of the member's aggregate amount of outstanding advances. (b) Timing of minimum stock purchase. (1) Within 60 calendar days after an institution is approved for membership in a Bank pursuant to §925.3 of this part, or an institution is automatically approved for membership pursuant to §925.4(c) of this part, the institution shall purchase its minimum stock requirement as set forth in paragraph (a) of this section. (2) At the election of an institution approved for membership, including those automatically approved under §925.4(c) of this part, the institution may purchase its minimum stock requirement in installments, provided that not less than one-fourth of the total amount shall be purchased within 60 calendar days of the date of approval of membership, and that a further sum of not less than one-fourth of such total shall be purchased at the end of each succeeding period of four months from the date of approval of membership. (c) Commencement of membership. An institution that has been approved for membership shall become a member at the time it purchases its minimum stock requirement or the first installment thereof pursuant to this section. (d) Failure to purchase minimum stock requirement. If an institution that has submitted an application and been approved for membership fails to purchase its minimum stock requirement or its first installment within 60 calendar days of the date of its approval for membership, such approval shall be null and void and the institution, if it wants to be a member, shall be required to submit a new application for membership. (e) Reports. The Bank shall make reports to the Finance Board setting forth purchases by institutions approved for membership of their minimum stock requirement pursuant to this section in accordance with the instructions provided in the Data Reporting Manual issued by the Finance Board, as amended from time to time. [58 FR 43542, Aug. 17, 1993; 58 FR 47181, Sept. 7, 1993. Redesignated and amended at 61 FR 42542, 42549, Aug. 16, 1996; 63 FR 40024, July 27, 1998; 63 FR 65692, Nov. 30, 1998; 65 FR 8261, Feb. 18, 2000; 65 FR 13870, Mar. 15, 2000; 71 FR 35500, June 21, 2006] (a) A Bank shall issue to each new member, as of the effective date of membership, stock in the member's name for the amount of stock purchased and paid for in full. (b) If the member purchases stock in installments, the stock shall be issued in installments with the appropriate number of shares issued after each payment is made. (c) Stock may be issued in certificated or uncertificated form at the discretion of the Bank. (d) A Bank may convert all outstanding certificated stock to uncertificated form at its discretion. (a) Adjustment in general. A Bank may from time to time increase or decrease the amount of stock any member is required to hold. (b)(1) Annual adjustment. A Bank shall calculate annually, in the manner set forth in §925.20(a) of this part, each member's required minimum holdings of stock in the Bank in which it is a member using calendar year-end financial data provided by the member to the Bank, pursuant to §925.31(d) of this part, and shall notify each member of the adjustment. The notice shall clearly state that the Bank's calculation of each member's minimum stock holdings is to be used to determine the number of votes that the member may cast in that year's election of directors and shall identify the state within the district in which the member will vote. A member that does not agree with the Bank's calculation of the minimum stock requirement or with the identification of its voting state may request the Finance Board to review the Bank's determination. The Finance Board shall promptly determine the member's minimum required holdings and its proper voting state, which determination shall be final. (2) Redemption of excess shares. If, after the annual adjustment required by paragraph (b)(1) of this section is made, the amount of stock that a member is required to hold is decreased, the Bank may, in its discretion and upon proper application of the member, retire such excess stock, and the Bank shall pay for each share upon surrender of the stock an amount equal to the par value thereof (except that if at any time the Finance Board finds that the paid-in capital of a Bank is or is likely to be impaired as a result of losses in or depreciation of the assets held, the Bank shall on the order of the Finance Board withhold from the amount to be paid in retirement of the stock a pro rata share of the amount of such impairment as determined by the Finance Board) or, at its election, the Bank may credit any part of such payment against the member's debt to the Bank. (c) A member's stock holdings shall not be reduced under this section to an amount less than required by sections 6(b), 10(c) and 10(e) of the Act (12 U.S.C. 1426(b), 1430(c), 1430(e)). [58 FR 43542, Aug. 17, 1993, as amended at 58 FR 50837, Sept. 29, 1993; 58 FR 53023, Oct. 13, 1993; 58 FR 58231, Oct. 29, 1993. Redesignated and amended at 61 FR 42542, 42549, Aug. 16, 1996; 63 FR 65692, Nov. 30, 1998; 65 FR 8261, Feb. 18, 2000; 67 FR 12849, Mar. 20, 2002; 70 FR 9510, Feb. 28, 2005] A member may purchase stock in excess of the minimum amount required by §925.20(a) of this part as long as such purchase is approved by the member's Bank and the laws under which the member operates permit such purchase. [58 FR 43542, Aug. 17, 1993. Redesignated and amended at 61 FR 42542, 42549, Aug. 16, 1996; 65 FR 8262, Feb. 18, 2000] Source: 58 FR 43542, Aug. 17, 1993, unless otherwise noted. Redesignated at 61 FR 42542, Aug. 16, 1996.
(a) Consolidation of members. Upon the consolidation of two or more institutions that are members of the same Bank into one institution operating under the charter of one of the consolidating institutions, the membership of the surviving institution shall continue and the membership of each disappearing institution shall terminate on the cancellation of its charter. Upon the consolidation of two or more institutions, at least two of which are members of different Banks, into one institution operating under the charter of one of the consolidating institutions, the membership of the surviving institution shall continue and the membership of each disappearing institution shall terminate upon cancellation of its charter, provided, however, that if more than 80 percent of the assets of the consolidated institution are derived from the assets of a disappearing institution, then the consolidated institution shall continue to be a member of the Bank of which that disappearing institution was a member prior to the consolidation, and the membership of the other institutions shall terminate upon the effective date of the consolidation. (b) Consolidation into nonmember—(1) In general. Upon the consolidation of a member into an institution that is not a member of a Bank, where the consolidated institution operates under the charter of the nonmember institution, the membership of the disappearing institution shall terminate upon the cancellation of its charter. (2) Notification. If a member has consolidated into a nonmember that has its principal place of business in a state in the same Bank district as the former member, the consolidated institution shall have 60 calendar days after the cancellation of the charter of the former member within which to notify the Bank of the former member that the consolidated institution intends to apply for membership in such Bank. If the consolidated institution does not so notify the Bank by the end of the period, the Bank shall require the liquidation of any outstanding indebtedness owed by the former member, shall settle all outstanding business transactions with the former member, and shall redeem or repurchase the Bank stock owned by the former member in accordance with §925.29. (3) Application. If such a consolidated institution has notified the appropriate Bank of its intent to apply for membership, the consolidated institution shall submit an application for membership within 60 calendar days of so notifying the Bank. If the consolidated institution does not submit an application for membership by the end of the period, the Bank shall require the liquidation of any outstanding indebtedness owed by the former member, shall settle all outstanding business transactions with the former member, and shall redeem or repurchase the Bank stock owned by the former member in accordance with §925.29. (4) Outstanding indebtedness. If a member has consolidated into a nonmember institution, the Bank need not require the former member or its successor to liquidate any outstanding indebtedness owed to the Bank or to redeem its Bank stock, as otherwise may be required under §925.29, during: (i) The initial 60 calendar-day notification period; (ii) The 60 calendar-day period following receipt of a notification that the consolidated institution intends to apply for membership; and (iii) The period of time during which the Bank processes the application for membership. (5) Approval of membership. If the application of such a consolidated institution is approved, the consolidated institution shall become a member of that Bank upon the purchase of the amount of Bank stock required by section 6 of the Act (12 U.S.C. 1426). If a Bank's capital plan has not taken effect, the amount of stock that the consolidated institution is required to own shall be as provided in §925.20 and §925.22. If the capital plan for the Bank has taken effect, the amount of stock that the consolidated institution is required to own shall be equal to the minimum investment established by the capital plan for that Bank. (6) Disapproval of membership. If the Bank disapproves the application for membership of the consolidated institution, the Bank shall require the liquidation of any outstanding indebtedness owed by, and the settlement of all other outstanding business transactions with, the former member, and shall redeem or repurchase the Bank stock owned by the former member in accordance with §925.29. (c) Dividends on acquired Bank stock. A consolidated institution shall be entitled to receive dividends on the Bank stock that it acquires as a result of a consolidation with a member in accordance with §931.4(a) of this chapter. (d) Stock transfers. With regard to any transfer of Bank stock from a disappearing member to the surviving or consolidated member, as appropriate, for which the approval of the Finance Board is required pursuant to section 6(f) of the Act (12 U.S.C. 1426(f)), as in effect prior to November 12, 1999, such transfer shall be deemed to be approved by the Finance Board by compliance in all applicable respects with the requirements of this section. [66 FR 8308, Jan. 30, 2001, as amended at 67 FR 12849, Mar. 20, 2002; 70 FR 9510, Feb. 28, 2005] Source: 58 FR 43542, Aug. 17, 1993, unless otherwise noted. Redesignated at 61 FR 42542, Aug. 16, 1996.
(a) In general. (1) Any institution may withdraw from membership by providing to the Bank written notice of its intent to withdraw from membership. A member that has so notified its Bank shall be entitled to have continued access to the benefits of membership until the effective date of its withdrawal, but the Bank need not commit to providing any further services, including advances, to a withdrawing member that would mature or otherwise terminate subsequent to the effective date of the withdrawal. A member may cancel its notice of withdrawal at any time prior to its effective date by providing a written cancellation notice to the Bank. A Bank may impose a fee on a member that cancels a notice of withdrawal, provided that the fee or the manner of its calculation is specified in the Bank's capital plan. (2) A Bank shall notify the Finance Board within 10 calendar days of receipt of any notice of withdrawal or notice of cancellation of withdrawal from membership. (b) Effective date of withdrawal. The membership of an institution that has submitted a notice of withdrawal shall terminate as of the date on which the last of the applicable stock redemption periods ends for the stock that the member is required to hold, as of the date that the notice of withdrawal is submitted, under the terms of a Bank's capital plan as a condition of membership, unless the institution has cancelled its notice of withdrawal prior to the effective date of the termination of its membership. (c) Stock redemption periods. The receipt by a Bank of a notice of withdrawal shall commence the applicable 6-month and 5-year stock redemption periods, respectively, for all of the Class A and Class B stock held by that member that is not already subject to a pending request for redemption. In the case of an institution the membership of which has been terminated as a result of a merger or other consolidation into a nonmember or into a member of another Bank, the applicable stock redemption periods for any stock that is not subject to a pending notice of redemption shall be deemed to commence on the date on which the charter of the former member is cancelled. (d) Certification. No institution may withdraw from membership unless, on the date that the membership is to terminate, there is in effect a certification from the Finance Board that the withdrawal of a member will not cause the Bank System to fail to satisfy its requirements under section 21B(f)(2)(C) of the Act (12 U.S.C. 1441b(f)(2)(C)) to contribute toward the interest payments owed on obligations issued by the Resolution Funding Corporation. [66 FR 8309, Jan. 30, 2001, as amended at 66 FR 54107, Oct. 26, 2001; 67 FR 12849, Mar. 20, 2002; 70 FR 9510, Feb. 28, 2005] (a) Grounds. The board of directors of a Bank may terminate the membership of any institution that: (1) Fails to comply with any requirement of the Act, any regulation adopted by the Finance Board, or any requirement of the Bank's capital plan; (2) Becomes insolvent or otherwise subject to the appointment of a conservator, receiver, or other legal custodian under federal or state law; or (3) Would jeopardize the safety or soundness of the Bank if it were to remain a member. (b) Stock redemption periods. The applicable 6-month and 5-year stock redemption periods, respectively, for all of the Class A and Class B stock owned by a member and not already subject to a pending request for redemption, shall commence on the date that the Bank terminates the institution's membership. (c) Membership rights. An institution whose membership is terminated involuntarily under this section shall cease being a member as of the date on which the board of directors of the Bank acts to terminate the membership, and the institution shall have no right to obtain any of the benefits of membership after that date, but shall be entitled to receive any dividends declared on its stock until the stock is redeemed or repurchased by the Bank. [66 FR 8309, Jan. 30, 2001, as amended at 66 FR 54107, Oct. 26, 2001] (a) In general. If an institution withdraws from membership or its membership is otherwise terminated, the Bank shall determine an orderly manner for liquidating all outstanding indebtedness owed by that member to the Bank and for settling all other claims against the member. After all such obligations and claims have been extinguished or settled, the Bank shall return to the member all collateral pledged by the member to the Bank to secure its obligations to the Bank. (b) Bank stock. If an institution that has withdrawn from membership or that otherwise has had its membership terminated remains indebted to the Bank or has outstanding any business transactions with the Bank after the effective date of its termination of membership, the Bank shall not redeem or repurchase any Bank stock that is required to support the indebtedness or the business transactions until after all such indebtedness and business transactions have been extinguished or settled. [66 FR 8310, Jan. 30, 2001] (a) In general. An institution that has withdrawn from membership or otherwise has had its membership terminated and which has divested all of its shares of Bank stock, may not be readmitted to membership in any Bank, or acquire any capital stock of any Bank, for a period of 5 years from the date on which its membership terminated and it divested all of its shares of Bank stock. (b) Exceptions. An institution that transfers membership between two Banks without interruption shall not be deemed to have withdrawn from Bank membership or had its membership terminated. Any institution that withdrew from Bank membership prior to December 31, 1997, and for which the 5-year period has not expired, may apply for membership in a Bank at any time, subject to the approval of the Finance Board and the requirements of this part 925. [66 FR 8310, Jan. 30, 2001] As a condition precedent to Bank membership, each member: (a) Consents to such examinations as the Bank or the Finance Board may require for purposes of the Act; (b) Agrees that reports of examinations by local, state or federal agencies or institutions may be furnished by such authorities to the Bank or the Finance Board upon request; (c) Agrees to give the Bank or the appropriate Federal banking agency, upon request, such information as the Bank or the appropriate Federal banking agency may need to compile and publish cost of funds indices and to publish other reports or statistical summaries pertaining to the activities of Bank members; (d) Agrees to provide the Bank with calendar year-end financial data each year, for purposes of making the calculation described in §925.22(b)(1) of this part; and (e) Agrees to provide the Bank with copies of reports of condition and operations required to be filed with the member's appropriate Federal banking agency, if applicable, within 20 calendar days of filing, as well as copies of any annual report of condition and operations required to be filed. [58 FR 43542, Aug. 17, 1993; 58 FR 50837, Sept. 29, 1993; 58 FR 53023, Oct. 13, 1993. Redesignated and amended at 61 FR 42542, 42549, Aug. 16, 1996; 65 FR 8262, Feb. 18, 2000; 67 FR 12849, Mar. 20, 2002; 70 FR 9510, Feb. 28, 2005] Members may display the approved insignia of membership on their documents, advertising and quarters, and likewise use the words “Member Federal Home Loan Bank System.” [58 FR 43542, Aug. 17, 1993. Redesignated at 61 FR 42542, Aug. 16, 1996]
Title 12: Banks and Banking
PART 925—MEMBERS OF THE BANKS
Section Contents
§ 925.1 Definitions.
§ 925.2 Membership application requirements.
§ 925.3 Decision on application.
§ 925.4 Automatic membership.
§ 925.5 Appeals.
§ 925.6 General eligibility requirements.
§ 925.7 Duly organized requirement.
§ 925.8 Subject to inspection and regulation requirement.
§ 925.9 Makes long-term home mortgage loans requirement.
§ 925.10 10 percent requirement for certain insured depository institution applicants.
§ 925.11 Financial condition requirement for applicants other than insurance companies.
§ 925.12 Character of management requirement.
§ 925.13 Home financing policy requirement.
§ 925.14 De novo insured depository institution applicants.
§ 925.15 Recent merger or acquisition applicants.
§ 925.16 Financial condition requirement for insurance company applicants.
§ 925.17 Rebuttable presumptions.
§ 925.18 Determination of appropriate Bank district for membership.
§ 925.19 Par value and price of stock.
§ 925.20 Stock purchase.
§ 925.21 Issuance and form of stock.
§ 925.22 Adjustments in stock holdings.
§ 925.23 Purchase of excess stock.
§ 925.24 Consolidations involving members.
§ 925.26 Voluntary withdrawal from membership.
§ 925.27 Involuntary termination of membership.
§ 925.29 Disposition of claims.
§ 925.30 Readmission to membership.
§ 925.31 Reports and examinations.
§ 925.32 Official membership insignia.
Subpart A—Definitions
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§ 925.1 Definitions.
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Subpart B—Membership Application Process
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§ 925.2 Membership application requirements.
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§ 925.3 Decision on application.
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§ 925.4 Automatic membership.
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§ 925.5 Appeals.
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Subpart C—Eligibility Requirements
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§ 925.6 General eligibility requirements.
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§ 925.7 Duly organized requirement.
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§ 925.8 Subject to inspection and regulation requirement.
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§ 925.9 Makes long-term home mortgage loans requirement.
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§ 925.10 10 percent requirement for certain insured depository institution applicants.
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§ 925.11 Financial condition requirement for applicants other than insurance companies.
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§ 925.12 Character of management requirement.
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§ 925.13 Home financing policy requirement.
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§ 925.14 De novo insured depository institution applicants.
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§ 925.15 Recent merger or acquisition applicants.
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§ 925.16 Financial condition requirement for insurance company applicants.
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§ 925.17 Rebuttable presumptions.
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§ 925.18 Determination of appropriate Bank district for membership.
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Subpart D—Stock Requirements
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§ 925.19 Par value and price of stock.
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§ 925.20 Stock purchase.
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§ 925.21 Issuance and form of stock.
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§ 925.22 Adjustments in stock holdings.
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§ 925.23 Purchase of excess stock.
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Subpart E—Consolidations Involving Members
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§ 925.24 Consolidations involving members.
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Subpart F—Withdrawal and Removal From Membership
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§ 925.26 Voluntary withdrawal from membership.
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§ 925.27 Involuntary termination of membership.
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Subpart G—Orderly Liquidation of Advances and Redemption of Stock
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§ 925.29 Disposition of claims.
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Subpart H—Reacquisition of Membership
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§ 925.30 Readmission to membership.
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Subpart I—Bank Access to Information
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§ 925.31 Reports and examinations.
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Subpart J—Membership Insignia
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§ 925.32 Official membership insignia.
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