§ 1436. Reserves and dividends; emergency suspensions of requirements

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 1932

   Federal Home Loan Bank Act

   Pub. L. 72–522 § 16 · 47 Stat. 725

   Enacted · 12 U.S.C. § 1436

   July 22, 1932, ch. 522, § 16, 47 Stat. 736

   Source evidence

   Code source credit
   July 22, 1932, ch. 522, § 16, 47 Stat. 736

   Enacted provision · exact public law section
   Sec. 16. reserves and dividends 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. 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 board shall require from time to Payment of dividends. time. No dividends shall be paid except out of net earnings remaining after all reserves and charge-offs required under this Act have been provided for, and then only with the approval of the board. The reserves of each Federal Home Loan Bank shall be invested, subject to such regulations, restrictions, and limitations as may be prescribed by the board, in direct obligations of the United States 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.

2. 1964

   Housing Act of 1964

   Pub. L. 88–560 title VII § 701(d)(2) · 78 Stat. 769

   Substituted · 12 U.S.C. § 1436

   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”

   Source evidence

   Code amendment note
   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”.

   Enacted provision · exact public law section
   (2) The last sentence of section 16 of such Act is amended by striking out “in obligations of the Federal National Mortgage Association” and inserting in lieu thereof “in obligations, participations, or other instruments of or issued by the Federal National Mortgage Association”.

3. 1968

   Housing and Urban Development Act of 1968

   Pub. L. 90–448 title VIII § 807 · 82 Stat. 476

   Changed · 12 U.S.C. § 1436

   Pub. L. 90–448 authorized investments in obligations, participations, or other instruments issued by the Government National Mortgage Association

   Source evidence

   Code amendment note
   Pub. L. 90–448 authorized investments in obligations, participations, or other instruments issued by the Government National Mortgage Association.

   Enacted provision · exact public law section
   Sec. 807. amendments to other laws (a) Section 306(b) of the Housing Act of 1959 is amended by striking out “Federal National Mortgage Association pursuant” and inserting in lieu thereof “Government National Mortgage Association pursuant”. (b) Section 312(d) of the Housing Act of 1964 is amended by striking out “Federal” and inserting in lieu thereof “Government”. (c) Section 5(b) of the Department of Housing and Urban 79 stat. 669. 42 USC 3534. Development Act is amended— (1) by striking out “The Federal” and inserting in lieu thereof “The Government”; and (2) by striking out “, and the position of the President of said Association is hereby allocated among the positions referred to in section 7(c) hereof”. (d) Section 7(b) of the Department of Housing and Urban Development Act is repealed. (e) Section 101 of the Government Corporation Control Act is amended by striking out “Federal National Mortgage Association” and inserting in lieu thereof “Government National Mortgage Association” (f) Section 13(4) (F) of the Public Buildings Act of 1959 is amended by striking out “Federal” and inserting in lieu thereof “Government”. (g) Section 6(b) of the Participation Sales Act of 1966 is amended 80 stat. 167. 12 USC 1717 note. by striking out “secondary market operations carried on by the Federal” and inserting In lieu thereof “the Government”. (h) Section 1820(e) of title 38, United States Code, is amended by 78 stat. 800. striking out “Federal National” in three places and inserting in lieu thereof, in each such place, “Government National”. (i) Section 709 of title 18, United States Code, is amended by striking 68 stat. 609. out “Federal National Mortgage Association” each place it appears and inserting in lieu thereof, in each such place, “Government National Mortgage Association”. (j) Section 5136 of the Revised Statutes is amended by inserting 12 USC 24. “or the Government National Mortgage Association” immediately following “Federal National Mortgage Association”. (k) Section 11(h) of the Federal Home Loan Bank Act is amended 47 stat. 733; 68 stat. 622. 12 USC 1431. by inserting “or the Government National Mortgage Association, in the stock of the Federal National Mortgage Association” immediately following “Federal National Mortgage Association”. (l) Section 16 of the Federal Home Loan Bank Act is amended by inserting “or the Government National Mortgage Association” immediately following “Federal National Mortgage Association”. (m) Section 5(c) of the Home Owners’ Loan Act of 1933 is amended 48 stat. 132. 12 USC 1464. by inserting “or the Government National Mortgage Association,” immediately following “Federal National Mortgage Association” and fay inserting “or the stock of the Federal National Mortgage Association” immediately after “any other agency of the United States”. (n) Section 8(8) (E) of the Federal Credit Union Act is amended 73 stat. 630; 81 stat. 110. 12 USC 1757. by inserting “or the Government National Mortgage Association” immediately following “Federal National Mortgage Association”.

4. 1974

   Housing and Community Development Act of 1974

   Pub. L. 93–383 title VIII § 805(c)(3) · 88 Stat. 634

   Inserted · 12 U.S.C. § 1436

   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 section 1455 of this title

   Source evidence

   Code amendment note
   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 section 1455 of this title.

   Enacted provision · exact public law section
   (3) Section 16 of the Federal Home Loan Bank Act is amended by 12 USC 1436. inserting immediately after “Government National Mortgage Association” the following: “, in mortgages, obligations, or other securities which are or ever have been sold by the Federal Home Loan Mortgage Corporation pursuant to section 305 or section 306 of the Federal Home Loan Mortgage Corporation Act”.

5. 1982

   Garn-St Germain Depository Institutions Act of 1982

   Pub. L. 97–320 title I § 124 · 96 Stat. 1469

   1. Amended · 12 U.S.C. § 1436

      Pub. L. 97–320 designated existing provisions as subsec. (a)

   2. Added · 12 U.S.C. § 1436

      Pub. L. 97–320 added subsec. (b)

   Source evidence

   Code amendment note
   Pub. L. 97–320 designated existing provisions as subsec. (a) and added subsec. (b).

   Enacted provision · exact public law section
   Sec. 124. assistance to federal home loan banks members Section 16 of the Federal Home Loan Bank Act (12 U.S.C. 1436) is amended by inserting “(a)” after “Sec. 16.” and by adding at the end thereof the following: “(b) Notwithstanding subsection (a) or any other provision of this Act, if the Board determines that severe financial conditions exist threatening the stability of member institutions, the Board 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.”.

6. 1987

   Federal Savings and Loan Insurance Corporation Recapitalization Act of 1987

   Pub. L. 100–86 title III § 306(a) · 101 Stat. 552

   Added · 12 U.S.C. § 1436(c)

   Pub. L. 100–86 added subsec. (c)

   Source evidence

   Code amendment note
   Subsec. (c). Pub. L. 100–86 added subsec. (c).

   Enacted provision · exact public law section
   (a) Federal Home Loan Bank Dividends.— Section 16 of the Federal Home Loan Bank Act (12 U.S.C. 1436) is amended by adding at the end thereof the following new subsection: “(c) Exception in Case of Losses in Connection With Financing Corporation Stock.— “(1) In general.— Notwithstanding subsection (a) of this section, if— “(A) a Federal Home Loan Bank incurs a chargeoff or an expense in connection with such bank’s investment in the stock of the Financing Corporation under section 21; “(B) the Board determines there is an extraordinary need for the member institutions of the bank to receive dividends; and “(C) the bank has reduced all reserves (other than the reserve account required by the first 2 sentences of subsection (a)) to zero, the Board may authorize such bank to declare and pay dividends out of undivided profits (as such term is defined in section 21(d)(7)) or the reserve account required by the first 2 sentences Ante, p. 585. of subsection (a). “(2) Requirements of section 21 not affected.— Notwithstanding any payment of dividends by any Federal Home Loan Bank pursuant to an authorization by the Board under paragraph (1), the applicable provisions of section 21 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.”.

7. 1989

   Financial Institutions Reform, Recovery, and Enforcement Act of 1989

   Pub. L. 101–73 § 724(a)(1) · 103 Stat. 183

   Substituted · 12 U.S.C. § 1436(a)

   Pub. L. 101–73, § 724(a)(1), 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.”

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 101–73, § 724(a)(1), 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.”

   Enacted provision · exact public law section
   (1) by striking the first three sentences and inserting in lieu thereof: “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.”; and

   Effective date note
   Pub. L. 101–73, title VII, § 724(b), Aug. 9, 1989, 103 Stat. 429, provided that: “The amendment made by subsection (a)(1) [amending this section] shall take effect on January 1, 1992.”

8. 1989

   Financial Institutions Reform, Recovery, and Enforcement Act of 1989

   Pub. L. 101–73 § 724(a)(2) · 103 Stat. 183

   Substituted · 12 U.S.C. § 1436(a)

   Pub. L. 101–73, § 724(a)(2), 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 section 1441 of this title or payments relating to the Funding Corporation Principal Fund under section 1441b(e) of this title, and then only with the approval of the Federal Housing Finance Board. Beginning on January 1, 1992, 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.”

   Target inherited from the preceding amendment note.

   Source evidence

   Code amendment note
   Pub. L. 101–73, § 724(a)(2), 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 section 1441 of this title or payments relating to the Funding Corporation Principal Fund under section 1441b(e) of this title, and then only with the approval of the Federal Housing Finance Board. Beginning on January 1, 1992, 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.”

   Enacted provision · exact public law section
   (2) by striking the fifth sentence and inserting the following: “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 Act 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 section 21 or payments relating to the Funding Corporation Principal Fund under section 21B(e), and then only with the approval of the Federal Housing Finance Board. Beginning on January 1, 1992, Effective date. the preceding sentence shall be applied by substituting ‘previously retained earnings or current net earnings’ for ‘net earnings’.”.

   Effective date note
   Pub. L. 101–73, title VII, § 724(b), Aug. 9, 1989, 103 Stat. 429, provided that: “The amendment made by subsection (a)(1) [amending this section] shall take effect on January 1, 1992.”

9. 1989

   Financial Institutions Reform, Recovery, and Enforcement Act of 1989

   Pub. L. 101–73 § 701(b)(1) · 103 Stat. 183

   Substituted · 12 U.S.C. § 1436(a)

   Pub. L. 101–73, § 701(b)(1), (3)(A), substituted “Board” for “board” wherever appearing

   Target inherited from the preceding amendment note.

   Source evidence

   Code amendment note
   Pub. L. 101–73, § 701(b)(1), (3)(A), substituted “Board” for “board” wherever appearing.

   Enacted provision · exact public law section
   (1) In general— Except as otherwise specifically provided in 12 USC 1421 et seq. this title, the Federal Home Loan Bank Act is amended by striking “board” (other than in section 7) and “Federal Home Loan Bank Board” each place such terms appear and inserting “Board”.

   Effective date note
   Pub. L. 101–73, title VII, § 724(b), Aug. 9, 1989, 103 Stat. 429, provided that: “The amendment made by subsection (a)(1) [amending this section] shall take effect on January 1, 1992.”

10. 1999

    Pub. L. 106–102 title VI § 606(g) · 113 Stat. 1338

    1. Substituted · 12 U.S.C. § 1436(a)

       Pub. L. 106–102, in third sentence substituted “previously retained earnings or current net earnings” for “net earnings”

    2. Struck · 12 U.S.C. § 1436(a)

       Pub. L. 106–102, in third sentence struck out “, and then only with the approval of the Federal Housing Finance Board” after “section 1441b(e) of this title”

    3. Substituted · 12 U.S.C. § 1436(a)

       Pub. L. 106–102, in third sentence struck out fourth sentence which read as follows: “Beginning on January 1, 1992, the preceding sentence shall be applied by substituting ‘previously retained earnings or current net earnings’ for ‘net earnings’.”

    Source evidence

    Code amendment note
    Subsec. (a). Pub. L. 106–102, 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 “section 1441b(e) of this title” and struck out fourth sentence which read as follows: “Beginning on January 1, 1992, the preceding sentence shall be applied by substituting ‘previously retained earnings or current net earnings’ for ‘net earnings’.”

    Enacted provision · exact public law section
    (g) Section 16.— Section 16(a) of the Federal Home Loan Bank Act (12 U.S.C. 1436(a)) is amended— (1) in the third sentence— (A) by striking “net earnings” and inserting “previously retained earnings or current net earnings”; and (B) by striking “, and then only with the approval of the Federal Housing Finance Board”; and (2) by striking the fourth sentence.

11. 2008

    Federal Housing Finance Regulatory Reform Act of 2008

    Pub. L. 110–289 div. A title II § 1204(8) · 122 Stat. 2654

    Substituted · 12 U.S.C. § 1436

    Pub. L. 110–289 substituted “the Director” for “the Board” wherever appearing

    Source evidence

    Code amendment note
    Pub. L. 110–289 substituted “the Director” for “the Board” wherever appearing.

    Enacted provision · exact public law section
    (8) by striking 12 USC 1422 et al. “the Board” each place that term appears and inserting “the Director”;

14 of 14 references resolved to an enrolled provision