Accumulation and maintenance of reserves; payment of dividends
section 1441 of this titlesection 1441b(e) of this titlesection 1455 of this titleEach Federal Home Loan Bank may carry to a reserve account from time-to-time such portion of its net earnings as may be determined by its board of directors. Each Federal Home Loan Bank shall establish such additional reserves and/or make such charge-offs on account of depreciation or impairment of its assets as the Director shall require from time to time. No dividends shall be paid except out of previously retained earnings or current net earnings remaining after reductions for all reserves, chargeoffs, purchases of capital certificates of the Financing Corporation, and payments relating to the Funding Corporation required under this chapter have been provided for, other than chargeoffs or expenses incurred by a Bank in connection with the purchase of capital stock of the Financing Corporation under or payments relating to the Funding Corporation Principal Fund under . The reserves of each Federal Home Loan Bank shall be invested, subject to such regulations, restrictions, and limitations as may be prescribed by the Director, in direct obligations of the United States, in obligations, participations, or other instruments of or issued by the Federal National Mortgage Association or the Government National Mortgage Association, in mortgages, obligations, or other securities which are or ever have been sold by the Federal Home Loan Mortgage Corporation pursuant to section 1454 or , and in such securities as fiduciary and trust funds may be invested in under the laws of the State in which the Federal Home Loan Bank is located.
Assistance to member institutions in event of severe financial conditions
Notwithstanding subsection (a) or any other provision of this chapter, if the Director determines that severe financial conditions exist threatening the stability of member institutions, the Director may suspend temporarily the requirements of subsection (a) that a portion of net earnings be set aside semiannually by each Federal Home Loan Bank to a reserve account and permit each Federal Home Loan Bank to declare and pay dividends out of undivided profits.
Exception in case of losses in connection with Financing Corporation stock
In general
section 1441 of this title Requirements of not affected
section 1441 of this titleNotwithstanding any payment of dividends by any Federal Home Loan Bank pursuant to an authorization by the Director under paragraph (1), the applicable provisions of shall continue to apply with respect to such bank, and to such bank’s investment in the Financing Corporation, in the same manner and to the same extent as if such payment had not been made.
July 22, 1932, ch. 522, § 1647 Stat. 736Aug. 2, 1954, ch. 64968 Stat. 622Pub. L. 88–560, title VII, § 701(d)(2)78 Stat. 800Pub. L. 90–448, title VIII, § 807l82 Stat. 545Pub. L. 93–383, title VIII, § 805(c)(3)88 Stat. 727Pub. L. 97–320, title I, § 12496 Stat. 1485Pub. L. 100–86, title III, § 306(a)101 Stat. 600Pub. L. 101–73, title VII103 Stat. 412Pub. L. 106–102, title VI, § 606(g)113 Stat. 1455Pub. L. 110–289, div. A, title II, § 1204(8)122 Stat. 2786(, ; , title II, § 204(a), ; , , ; (), , ; , , ; , , ; , , ; , §§ 701(b)(1), (3)(A), 724(a), , , 428; , , ; , , .)
Editorial Notes
Amendments
Pub. L. 110–2892008— substituted “the Director” for “the Board” wherever appearing.
Pub. L. 106–102section 1441b(e) of this title1999—Subsec. (a). , in third sentence substituted “previously retained earnings or current net earnings” for “net earnings” and struck out “, and then only with the approval of the Federal Housing Finance Board” after “” and struck out fourth sentence which read as follows: “Beginning on , the preceding sentence shall be applied by substituting ‘previously retained earnings or current net earnings’ for ‘net earnings’.”
Pub. L. 101–73, § 724(a)(1)1989—Subsec. (a). , substituted “Each Federal Home Loan Bank may carry to a reserve account from time-to-time such portion of its net earnings as may be determined by its board of directors.” for “Each Federal Home Loan Bank shall carry to a reserve account semiannually 20 per centum of its net earnings until said reserve account shall show a credit balance equal to 100 per centum of the paid-in capital of such bank. After said reserve has reached 100 per centum of the paid-in capital of said bank, 5 per centum of its net earnings shall be added thereto semiannually. Whenever said reserve shall have been impaired below 100 per centum of the paid-in capital it shall be restored before any dividends are paid.”
Pub. L. 101–73, § 724(a)(2)section 1441 of this titlesection 1441b(e) of this title, substituted “No dividends shall be paid except out of net earnings remaining after reductions for all reserves, chargeoffs, purchases of capital certificates of the Financing Corporation, and payments relating to the Funding Corporation required under this chapter have been provided for, other than chargeoffs or expenses incurred by a Bank in connection with the purchase of capital stock of the Financing Corporation under or payments relating to the Funding Corporation Principal Fund under , and then only with the approval of the Federal Housing Finance Board. Beginning on , the preceding sentence shall be applied by substituting ‘previously retained earnings or current net earnings’ for ‘net earnings’.” for “No dividends shall be paid except out of net earnings remaining after all reserves and charge-offs required under this chapter have been provided for, and then only with the approval of the board.”
Pub. L. 101–73, § 701(b)(1), (3)(A), substituted “Board” for “board” wherever appearing.
Pub. L. 100–861987—Subsec. (c). added subsec. (c).
Pub. L. 97–3201982— designated existing provisions as subsec. (a) and added subsec. (b).
Pub. L. 93–383section 1455 of this title1974— inserted reference to mortgages, obligations, or other securities sold by the Federal Home Loan Mortgage Corporation pursuant to section 1454 or .
Pub. L. 90–4481968— authorized investments in obligations, participations, or other instruments issued by the Government National Mortgage Association.
Pub. L. 88–5601964— 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—Act , inserted reference to obligations of Federal National Mortgage Association in last sentence.
Statutory Notes and Related Subsidiaries
Effective Date of 1989 Amendment
Pub. L. 101–73, title VII, § 724(b)103 Stat. 429
Effective Date of 1968 Amendment
Pub. L. 90–448section 808 of Pub. L. 90–448section 1716b of this titleFor effective date of amendment by title VIII of , see , set out as an Effective Date note under .