(l) Temporary authority of Treasury to purchase obligations; conditions
(1) Authority to purchase
(A) General authority
In addition to the authority under subsection (i) of this section, the Secretary of the Treasury is authorized to purchase any obligations issued by any Federal Home Loan Bank under any section of this chapter, on such terms and conditions as the Secretary may determine and in such amounts as the Secretary may determine. Nothing in this subsection requires a Federal Home Loan Bank to issue obligations or securities to the Secretary without mutual agreement between the Secretary and the Federal Home Loan Bank. Nothing in this subsection permits or authorizes the Secretary, without the agreement of the Federal Home Loan Bank, to engage in open market purchases of the common securities of any Federal Home Loan Bank.
(B) Emergency determination required
In connection with any use of this authority, the Secretary must determine that such actions are necessary to—
(i) provide stability to the financial markets;
(ii) prevent disruptions in the availability of mortgage finance; and
(iii) protect the taxpayer.
(C) Considerations
To protect the taxpayers, the Secretary of the Treasury shall take into consideration the following in connection with exercising the authority contained in this paragraph:
(i) The need for preferences or priorities regarding payments to the Government.
(ii) Limits on maturity or disposition of obligations or securities to be purchased.
(iii) The Federal Home Loan Bank’s plan for the orderly resumption of private market funding or capital market access.
(iv) The probability of the Federal Home Loan Bank fulfilling the terms of any such obligation or other security, including repayment.
(v) The need to maintain the Federal Home Loan Bank’s status as a private shareholder-owned company.
(vi) Restrictions on the use of Federal Home Loan Bank resources, including limitations on the payment of dividends and executive compensation and any such other terms and conditions as appropriate for those purposes.
(D) Reports to Congress
Upon exercise of this authority, the Secretary shall report to the Committees on the Budget, Financial Services, and Ways and Means of the House of Representatives and the Committees on the Budget, Finance, and Banking, Housing, and Urban Affairs of the Senate as to the necessity for the purchase and the determinations made by the Secretary under subparagraph (B) and with respect to the considerations required under subparagraph (C), and the size, terms, and probability of repayment or fulfillment of other terms of such purchase.
(2) Rights; sale of obligations and securities
(A) Exercise of rights
The Secretary of the Treasury may, at any time, exercise any rights received in connection with such purchases.
(B) Sale of obligations
The Secretary of the Treasury may, at any time, subject to the terms of the security or otherwise upon terms and conditions and at prices determined by the Secretary, sell any obligation acquired by the Secretary under this subsection.
(C) Deficit reduction
The Secretary of the Treasury shall deposit in the General Fund of the Treasury any amounts received by the Secretary from the sale of any obligation acquired by the Secretary under this subsection, where such amounts shall be—
(i) dedicated for the sole purpose of deficit reduction; and
(ii) prohibited from use as an offset for other spending increases or revenue reductions.
(D) Application of sunset to purchased obligations
The authority of the Secretary of the Treasury to hold, exercise any rights received in connection with, or sell, any obligations purchased is not subject to the provisions of paragraph (4).
(3) Funding
For the purpose of the authorities granted in this subsection, the Secretary of the Treasury may use the proceeds of the sale of any securities issued under chapter 31 of title 31, and the purposes for which securities may be issued under chapter 31 of title 31 are extended to include such purchases and the exercise of any rights in connection with such purchases. Any funds expended for the purchase of, or modifications to, obligations and securities, or the exercise of any rights received in connection with such purchases under this subsection shall be deemed appropriated at the time of such purchase, modification, or exercise.
(4) Termination of authority
The authority under this subsection (l), with the exception of paragraphs (2) and (3) of this subsection, shall expire December 31, 2009.
(5) Authority of the Director with respect to executive compensation
The Director shall have the power to approve, disapprove, or modify the executive compensation of the Federal Home Loan Bank, as defined under Regulation S-K, 17 C.F.R. 229.
References in Text
Section 9105 of title 31, referred to in subsec. (j), was amended generally by Pub. L. 101–576, title III, § 305, Nov. 15, 1990, 104 Stat. 2853, and, as so amended, subsec. (a) does not contain a par. (1)(B). Prior to the general amendment, subsec. (a)(1)(B) related to audits of mixed-ownership Government corporations during periods in which capital of the United States Government was invested therein.
Codification
In subsecs. (i) (first par.) and (j), “chapter 31 of title 31” substituted for “the Second Liberty Bond Act”, and “section 9105(a)(1)(B) of title 31” and “sections 9107(c)(2) and 9108(d)(1) of title 31” substituted for “the first sentence of section 202 of the Government Corporation Control Act [31 U.S.C. 857]” and “the first sentence of subsection (d) of section 303 of the Government Corporation Control Act [31 U.S.C. 868(d)]”, respectively, on authority of Pub. L. 97–258, § 4(b), Sept. 13, 1982, 96 Stat. 1067, the first section of which enacted Title 31, Money and Finance.
Amendments
2010—Subsec. (l)(2)(C), (D). Pub. L. 111–203 added subpar. (C) and redesignated former subpar. (C) as (D).
2008—Pub. L. 110–289, § 1204(9), substituted “The Director” for “The Board” wherever appearing in subsecs. (d) to (f).
Pub. L. 110–289, § 1204(8), substituted “the Director” for “the Board” wherever appearing in subsecs. (a) and (e) to (i).
Subsec. (b). Pub. L. 110–289, § 1204(3)(A), substituted “The Office of Finance, as agent for the Banks,” for “The Board” and “such Office” for “the Board” in first sentence and “the Office of Finance” for “the Board” in second and fourth sentences.
Subsec. (c). Pub. L. 110–289, § 1204(3)(B), substituted “the Office of Finance, as agent for the Banks,” for “the Board” before “may issue” and “such Office” for “the Board” before “may prescribe”.
Subsec. (f). Pub. L. 110–289, § 1204(3)(C), struck out the two commas after “permit” and inserted “or” and struck out the comma after “require”.
Subsec. (l). Pub. L. 110–289, § 1117(c), added subsec. (l).
2006—Subsec. (k). Pub. L. 109–173 substituted “the Deposit Insurance Fund” for “SAIF” in heading and “Deposit Insurance Fund” for “Savings Association Insurance Fund” in pars. (1) and (2).
Pub. L. 109–171 repealed Pub. L. 104–208, § 2704(d)(11)(A). See 1996 Amendment note below.
2004—Subsec. (j). Pub. L. 108–271 substituted “Government Accountability Office” for “General Accounting Office”.
1996—Subsec. (h). Pub. L. 104–208, § 208(h)(2), substituted “section 681 of title 15” for “section 681(d) of title 15”.
Subsec. (k). Pub. L. 104–208, § 2704(d)(11)(A), which directed the amendment of subsec. (k) by substituting “the Deposit Insurance Fund” for “SAIF” in heading and “Deposit Insurance Fund” for “Savings Association Insurance Fund” in pars. (1) and (2), was repealed by Pub. L. 109–171. See Effective Date of 1996 Amendment note below and 2006 Amendment note above.
1989—Subsecs. (a) to (d). Pub. L. 101–73, § 701(b)(1), (3)(A), substituted “Board” for “board” wherever appearing.
Subsec. (e)(1). Pub. L. 101–73, § 709(1), inserted “incidental to activities” after “other business not”.
Pub. L. 101–73, § 701(b)(1), (3)(A), substituted “Board” for “board”.
Subsec. (e)(2)(C). Pub. L. 101–73, § 701(c)(1), which directed insertion of “Federal Home Loan” before “Banks,” was executed the second time that term appeared, because “Federal Home Loan” already preceded the term “Banks,” the first place it appeared.
Subsec. (f). Pub. L. 101–73, § 709(2), which directed amendment of subsec. (f) by striking out “or whenever in the judgment of at least 4 members of the board an emergency exists requiring such action” after “empowered to permit,”, was executed by striking out “or whenever in the judgment of at least four members of the board an emergency exists requiring such action”, as the probable intent of Congress. The amendment probably should also have struck out the comma after “empowered to permit” and the words “, to require,” after “such action”.
Pub. L. 101–73, § 701(b)(1), (3)(A), substituted “Board” for “board” wherever appearing.
Subsec. (g). Pub. L. 101–73, § 710(b)(6), struck out “or nonmember borrowers” after “made to members” wherever appearing.
Subsec. (h). Pub. L. 101–73, § 710(b)(6), struck out “or nonmember borrowers” after “advances to members”.
Pub. L. 101–73, § 701(b)(1), (3)(A), substituted “Board” for “board”.
Subsec. (i). Pub. L. 101–73, § 701(c)(2), inserted “Federal” before “Home Loan Bank System”.
Pub. L. 101–73, § 701(b)(1), (2), substituted “Chairperson of the Board” for “Chairman of the Federal Home Loan Bank Board”.
Subsec. (k). Pub. L. 101–73, § 709(3), amended subsec. (k) generally. Prior to amendment, subsec. (k) read as follows: “The Federal Home Loan Banks are hereby authorized, as directed by the Board, to make loans to the Federal Savings and Loan Insurance Corporation. All such loans shall be made in accordance with the provisions of section 1725(d) of this title.”
1982—Subsec. (k). Pub. L. 97–320 added subsec. (k).
1980—Subsec. (e). Pub. L. 96–221 designated existing provisions as par. (1) and added par. (2).
1979—Subsec. (h). Pub. L. 96–153 inserted provisions relating to stock, obligations, or other securities of any small business investment company formed pursuant to section 681(d) of title 15, for the purpose of aiding members of the Federal Home Loan Bank System.
1974—Subsec. (h). Pub. L. 93–383 inserted reference to mortgages, obligations, or other securities sold by the Federal Home Loan Mortgage Corporation pursuant to section 1454 or 1455 of this title.
Subsec. (i). Pub. L. 93–495 substituted “obligations under this paragraph” for “obligations under this subsection” wherever appearing in fourth sentence of initial par., in second par. substituted provisions authorizing purchase of obligations issued pursuant to this section in amounts not to exceed $2,000,000,000, for provisions relating to exercise of authority of this subsection by the Secretary of the Treasury, and added third par.
1970—Subsec. (g). Pub. L. 91–609 substituted “five years” for “one year” in items (3) and (4).
1969—Subsec. (i). Pub. L. 91–151 increased the borrowing limit to $4,000,000,000 and made it a requirement that the rate charged on such borrowing be set at the current market yield on Treasury obligations and added a new paragraph which allows the Secretary to permit members of the Home Loan Bank System to continue to supply funds to the mortgage market during tight market conditions.
1968—Subsec. (h). Pub. L. 90–448 inserted “or the Government National Mortgage Association, in the stock of the Federal National Mortgage Association”.
1964—Subsec. (h). Pub. L. 88–560 substituted “in obligations, participations, or other instruments of or issued by the Federal National Mortgage Association” for “in obligations of the Federal National Mortgage Association”.
1954—Subsec. (h). Act Aug. 2, 1954, inserted reference to obligations of the Federal National Mortgage Association.
1950—Subsec. (g). Act June 27, 1950, § 3, struck out requirement that sums paid in on outstanding capital subscriptions of members from the base for determining the amount of money which the Federal Home Loan Banks shall at all times have invested.
Subsecs. (i), (j). Act June 27, 1950, § 4, added subsecs. (i) and (j).
1934—Subsecs. (i), (j). Act June 27, 1934, among other changes, struck out subsecs. (i) and (j).
Effective Date of 2010 Amendment
Amendment by Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 of this title.
Effective Date of 2006 Amendment
Amendment by Pub. L. 109–173 effective Mar. 31, 2006, see section 9(j) of Pub. L. 109–173, set out as a note under section 24 of this title.
Amendment by Pub. L. 109–171 effective no later than the first day of the first calendar quarter that begins after the end of the 90-day period beginning Feb. 8, 2006, see section 2102(c) of Pub. L. 109–171, set out as a Merger of BIF and SAIF note under section 1821 of this title.
Effective Date of 1996 Amendment
Amendment by section 2704(d)(11)(A) of Pub. L. 104–208 effective Jan. 1, 1999, if no insured depository institution is a savings association on that date, see section 2704(c) of Pub. L. 104–208, formerly set out as a note under section 1821 of this title.
Effective Date of 1968 Amendment
For effective date of amendment by title VIII of Pub. L. 90–448, see section 808 of Pub. L. 90–448, set out as an Effective Date note under section 1716b of this title.