Privately insured credit unions authorized to become members of a Federal home loan bank

(a)

In general

Section 4(a) of the Federal Home Loan Bank Act (12 U.S.C. 1424(a)) is amended by adding at the end the following new paragraph:

(5)

Certain privately insured credit unions

(A)

In general

Subject to the requirements of subparagraph (B), a credit union shall be treated as an insured depository institution for purposes of determining the eligibility of such credit union for membership in a Federal home loan bank under paragraphs (1), (2), and (3). (B)

Certification by appropriate supervisor

(i)

In general

For purposes of this paragraph and subject to clause (ii), a credit union which lacks Federal deposit insurance and which has applied for membership in a Federal home loan bank may be treated as meeting all the eligibility requirements for Federal deposit insurance only if the appropriate supervisor of the State in which the credit union is chartered has determined that the credit union meets all the eligibility requirements for Federal deposit insurance as of the date of the application for membership. (ii)

Certification deemed valid

If, in the case of any credit union to which clause (i) applies, the appropriate supervisor of the State in which such credit union is chartered fails to make a determination pursuant to such clause by the end of the 6-month period beginning on the date of the application, the credit union shall be deemed to have met the requirements of clause (i). (C)

Security interests of federal home loan bank not avoidable

Notwithstanding any provision of State law authorizing a conservator or liquidating agent of a credit union to repudiate contracts, no such provision shall apply with respect to— (i)any extension of credit from any Federal home loan bank to any credit union which is a member of any such bank pursuant to this paragraph; or (ii)any security interest in the assets of such credit union securing any such extension of credit. (D)

Protection for certain Federal home loan bank advances

Notwithstanding any State law to the contrary, if a Bank makes an advance under section 10 to a State-chartered credit union that is not federally insured— (i)the Bank’s interest in any collateral securing such advance has the same priority and is afforded the same standing and rights that the security interest would have had if the advance had been made to a federally-insured credit union; and (ii)the Bank has the same right to access such collateral that the Bank would have had if the advance had been made to a federally-insured credit union.

(b)

Copies of audits of private insurers of certain depository institutions required To be provided to supervisory agencies

Section 43(a)(2)(A) of the Federal Deposit Insurance Act (12 U.S.C. 1831t(a)(2)(A)) is amended— (1)in clause (i), by striking and at the end; (2)in clause (ii), by striking the period at the end and inserting a semicolon; and (3)by inserting at the end the following new clause:

(iii)in the case of depository institutions described in subsection (e)(2)(A) the deposits of which are insured by the private insurer which are members of a Federal home loan bank, to the Federal Housing Finance Agency, not later than 7 days after the audit is completed.