II
114th CONGRESS
1st Session
S. 1367
IN THE SENATE OF THE UNITED STATES
May 18, 2015
Mr. Donnelly (for himself and Mr. Portman) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs
A BILL
To amend the Federal Home Loan Bank Act with respect to membership eligibility of certain institutions.
Privately insured credit unions authorized to become members of a Federal home loan bank
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:
Certain privately insured credit unions
In general
Subject to the requirements of subparagraph (B), a credit union that lacks insurance of its member accounts under Federal law shall be treated as an insured depository institution for purposes of this Act.
Certification by appropriate State supervisor
For purposes of this paragraph, a credit union that lacks insurance of its member accounts under Federal law and that has applied for membership in a Federal home loan bank shall be treated as an insured depository institution if the following has occurred:
Determination by State supervisor of the credit union
In general
Subject to subclause (II), the appropriate supervisor of the State in which the credit union is chartered has determined that the credit union meets all the eligibility requirements under section 201(a) of the Federal Credit Union Act (12 U.S.C. 1781(a)) to apply for insurance of its member accounts as of the date of the application for membership.
Certification deemed valid
In the case of any credit union to which subclause (I) applies, if the appropriate supervisor of the State in which such credit union is chartered fails to make the determination required pursuant to such subclause by the end of the 12-month period beginning on the date on which the application is submitted to the supervisor, the credit union shall be deemed to have met the requirements of subclause (I).
Determination by State supervisor of the private deposit insurer
The licensing entity of the private deposit insurer that is insuring the member accounts of the credit union—
receives, on an annual basis, an independent actuarial opinion that the private insurer has set aside sufficient reserves for losses; and
obtains, as frequently as appropriate, but not less frequently than every 36 months, an independent actuary’s study of the capital adequacy of the private insurer.
Submission of financial information
The credit union or the appropriate supervisor of the State in which such credit union is chartered makes available, and continues to make available for such time as the credit union is a member of a Federal home loan bank, to the Federal Housing Finance Agency or to the Federal home loan bank all reports, records, and other information related to any examinations or inquiries performed by the supervisor concerning the financial condition of the credit union, as soon as is practicable.
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—
any extension of credit from any Federal home loan bank to any credit union that is a member of any such bank pursuant to this paragraph; or
any security interest in the assets of such a credit union securing any such extension of credit.
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—
the Bank’s interest in any collateral securing the 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
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.
.
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—
in clause (i), by striking and
at the end;
in clause (ii), by striking the period at the end and inserting a semicolon; and
by inserting at the end the following:
in the case of depository institutions described in subsection (e)(2)(A), the member accounts of which are insured by the private deposit 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.
.
GAO Report
Not later than 18 months after the date of enactment of this Act, the Comptroller General of the United States shall conduct a study and submit a report to Congress—
on the adequacy of insurance reserves held by a private deposit insurer that insures the member accounts of an entity described in section 43(e)(2)(A) of the Federal Deposit Insurance Act (12 U.S.C. 1831t(e)(2)(A)); and
for an entity described in paragraph (1), the member accounts of which are insured by a private deposit insurer, information on the level of compliance with Federal regulations relating to the disclosure of a lack of Federal deposit insurance.