[Federal Register Volume 59, Number 55 (Tuesday, March 22, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-6621]


[[Page Unknown]]

[Federal Register: March 22, 1994]


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FEDERAL HOUSING FINANCE BOARD

[No. 93-88]

 

Members of the Federal Home Loan Banks

AGENCY: Federal Housing Finance Board.

ACTION: Notice of guidelines for calculation of minimum Federal Home 
Loan Bank capital stock purchase requirement.

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SUMMARY: The Federal Housing Finance Board (``Finance Board'') is 
issuing guidelines that set forth the instructions and definitions for 
calculating the minimum Federal Home Loan Bank (``FHLBank'') capital 
stock purchase requirements of members and applicants for FHLBank 
membership. These guidelines are intended to provide guidance to the 
FHLBanks in order to ensure uniform interpretation and application by 
the FHLBanks of the definitions for the calculation of FHLBank stock 
purchase requirements.

DATES: These guidelines were effective as of November 17, 1993.

FOR FURTHER INFORMATION CONTACT: Amy R. Maxwell, Assistant Director, 
District Banks Directorate, (202) 408-2882, or Sharon B. Like, 
Attorney-Advisor, Office of Legal and External Affairs, (202) 408-2930, 
Federal Housing Finance Board, 1777 F Street NW., Washington, DC 20006.

SUPPLEMENTARY INFORMATION: In order to address the significant changes 
that the Financial Institutions Reform, Recovery and Enforcement Act of 
1989, Public Law 101-73, 103 Stat. 183 (Aug. 9, 1989) (``FIRREA'') made 
to the membership provisions in the Federal Home Loan Bank Act (``Bank 
Act''), the Finance Board published, on August 17, 1993, a final rule 
concerning membership in the FHLBank System (``final membership 
regulation''), 58 FR 43522 (1993), codified at 12 CFR part 933.
    This notice sets forth the instructions and guidelines for 
calculating a FHLBank member's minimum stock requirement pursuant to 12 
U.S.C. 1426(b), 1430(e)(3) and 12 CFR 933.7.
GUIDELINES FOR CALCULATION OF FEDERAL HOME LOAN BANK CAPITAL STOCK 
REQUIREMENT

I. Background

    Section 6(b) of the Federal Home Loan Bank Act requires all members 
of the FHLBank System to purchase FHLBank stock equal to one percent of 
the member's aggregate unpaid loan principal, but not less than $500. 
12 U.S.C. 1426(b); see 12 CFR 933.7(a). Additionally, section 10(e)(3) 
requires each member to purchase FHLBank stock as if at least 30 
percent of its total assets were home mortgage loans. 12 U.S.C. 
1430(e)(3); see 12 CFR 933.7(b).
    Therefore, a member is required to maintain FHLBank stock equal to 
the greater of one percent of aggregate unpaid loan principal or one 
percent of 30% of total assets.
    To ensure that the FHLBanks are uniformly interpreting and applying 
the definitions for the FHLBank stock requirement calculation, these 
guidelines provide instructions and definitions for calculating the 
minimum capital stock requirement.

II. Documentation

    1. A certification indicating an agreement to purchase FHLBank 
stock must be completed at the time the membership application is filed 
with the FHLBank (see sample certification attached as Exhibit A). The 
certification must be signed by a majority of the Applicant's board 
members or by a representative delegated the authority to sign for the 
board and whose signature is attested to by the corporate secretary.
    The purpose of such a certification is to ensure that the Applicant 
understands the stock purchase requirement and knows the approximate 
amount of stock required to be purchased after approval.
    2. Exhibits B through D provide line item definitions and 
calculation methodology for the minimum FHLBank stock requirement for 
commercial banks, thrifts and credit unions.

    Note: The line item definitions contained on the attached forms 
also can be used during the annual FHLBank stock adjustment process 
or upon approval for membership. See 12 U.S.C. 1426(b)(1), 12 CFR 
933.9(b)(1).

III. Special Conditions

    1. Thrift Calculation. The line item definitions provided for the 
thrift calculation incorporate line items from the year-end Annual 
Supplement. Consequently, the FHLBank should develop a comparable 
quarterly line item definition for thrift applicants filing for 
membership after the first quarter of operation.
    2. Insurance Company Calculation. In calculating the FHLBank stock 
requirement for insurance company applicants, the FHLBank will need to 
obtain a complete listing of all permanent single and multifamily 
mortgages and all residential mortgage-backed securities.

    Dated: November 17, 1993.

    By the Federal Housing Finance Board.
Philip L. Conover,
Managing Director.

Exhibit A

Federal Home Loan Bank of

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Applicant Name:--------------------------------------------------------

Application for Membership and Purchase of Stock in Federal Home Loan 
Bank

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(Date of Application)

    The undersigned Applicant hereby applies for membership in the 
Federal Home Loan Bank of __________ (FHLBank) and, if approved for 
membership, will purchase __________ shares of stock in the par 
value of $100 each in the FHLBank, and agrees to make payment in the 
amount of $__________ as payment of said stock purchase within 60 
calendar days of approval for FHLBank membership.
    Applicant is of the opinion that it is eligible to become a 
member of the FHLBank and that it is authorized to purchase and hold 
capital stock in the FHLBank and to maintain deposits there. 
Applicant understands that this application must be considered, 
acted upon, and approved by the Federal Housing Finance Board 
(Finance Board) before becoming a member of the FHLBank.
    In submitting this application, Applicant understands and agrees 
that:
    (1) It will be advised whether or not its application for 
membership is approved.
    (2) If admitted to membership, it will conform to all 
requirements of the Federal Home Loan Bank Act, as now or hereafter 
amended, and to the rules and regulations thereunder.
    (3) In applying for, and if Applicant is admitted to membership, 
the Finance Board and the FHLBank are authorized to receive any 
information, examination reports and other supervisory materials 
provided by the appropriate State or Federal regulatory authority or 
officer exercising supervisory authority over Applicant regarding 
Applicant and its affairs.
    (4) It will not represent itself to be a member of the FHLBank 
until it has received notice of approval of membership and has 
purchased its minimum stock requirement.
Federal Home Loan Bank of----------------------------------------------
Applicant Name:--------------------------------------------------------
    Applicant by its duly authorized representative and the 
undersigned members of Applicant's board of directors severally 
represent that each such person has read this application and that 
in the opinion of each such person, he or she has made such 
examination and investigation as is necessary (or is relying in good 
faith upon information received from qualified persons) to enable 
him or her to express an informed opinion that this application 
complies, to the best of his or her knowledge and belief, with the 
applicable requirements of the Federal Home Loan Bank Act and the 
rules and regulations thereunder.

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(Exact Name of Applicant as Specified in Charter)

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(Street Address of Applicant)

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(City, State, and Zip Code)

By:--------------------------------------------------------------------
(Duly Authorized Representative)

Attest:

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(Secretary)

Signatures of at Least a Majority of the Directors/Trustees*

Name (print)

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Corporate Title

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Signature

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    *Optional

Exhibit B--Commercial Banks

Computation of FHLBank Stock Requirement

As of------------------------------------------------------------------
    (most recent quarter)


Sum of:                                                                 
  1-4 Family Mortgages--Revolving (RC-C, Line 1c(1))....      __________
  1-4 Family Mortgages--Other (RC-C, Line 1c(2)a+b).....      __________
  Multifamily Loans (RC-C, Line 1d).....................      __________
  FNMA & FHLMC PCs & Passthroughs (RC-B, Line 2a(1))....      __________
  GNMA PCs & Passthroughs (RC-B, Line 2a(2))............      __________
  Other Private Residential PCs & Passthroughs (RC-B,                   
   Line 4a).............................................      __________
Total Mortgage Assets...................................   (1)__________
1% of (1)...............................................   (2)__________
Total Assets............................................   (3)__________
.3% of (3)..............................................   (4)__________
Required Stock Purchase:                                                
  Greater of (2) or (4); Round (5) to next highest $100.   (5)__________
Please enter total (in thousands) as reported on the most recent        
 regulatory financial report.                                           
                                                                        

Exhibit C--Thrifts

Computation of FHLBank Stock Requirement

As of ----------------------------------------------------------------
    (most recent quarter)


  Mortgage Loans and Contracts (AS 150).................      __________
Minus:                                                                  
  Residential Construction Loans (SC 230 plus SC 235)...      __________
Minus:                                                                  
  Balance of loans in process/undisbursed commitments on                
   residential property (AS 140)........................      __________
Net Mortgage Loans......................................   (1)__________
1% of (1)...............................................   (2)__________
Total Assets (SC 060)...................................   (3)__________
.3% of (3)..............................................   (4)__________
Required Stock Purchase:                                                
  Greater of (2) or (4); Round (5) to next highest $100.   (5)__________
Please enter total (in thousands) as reported on the most recent Thrift 
 Financial Report.                                                      
                                                                        

Exhibit D--Credit Unions

Computation of FHLBank Stock Requirement

As of------------------------------------------------------------------
    (most recent quarter)


  First Mortgage Real Estate (NCUA 5300, Line 703)......      __________
Minus:                                                                  
  Portion of line 703 representing construction loans...      __________
Total Mortgage Real Estate Assets.......................   (1)__________
Plus:                                                                   
  Other Real Estate (NCUA 5300, Line 386)...............   (2)__________
Federal Agency Mortgage-Backed Securities (Include only                 
 the portion of NCUA 5300, Line 742c that is MBS).......   (3)__________
Net Mortgage Loans (1) + (2) + (3)......................   (4)__________
1% of (4)...............................................   (5)__________
Total Assets (NCUA 5300, Line 010)......................   (6)__________
.3% of (6)..............................................   (7)__________
Required Stock Purchase:                                                
  Greater of (5) or (7); Round (8) to next highest $100.   (8)__________
Please enter total (in thousands) as reported on the most recent NCUA   
 Financial Report.                                                      
                                                                        


[FR Doc. 94-6621 Filed 3-21-94; 8:45 am]
BILLING CODE 6725-01-P