ELIGIBILITY FOR MEMBERSHIP.

SEC. 704. ELIGIBILITY FOR MEMBERSHIP. (a) Insured Depository Institutions.—Section 4(a) of the Federal Home Loan Bank Act (12 U.S.C. 1424(a)) is amended to read as follows: “(a) Criteria for Eligibility.— “(1) In general.—Any building and loan association, savings and loan association, cooperative bank, homestead association, insurance company, savings bank, or any insured depository institution (as defined in section 2 of this Act), shall be eligible to become a member of a Federal Home Loan Bank if such institution— “(A) is duly organized under the laws of any State or of the United States; 103 STAT. 416 “(B) is subject to inspection and regulation under the banking laws, or under similar laws, of the State or of the United States; and “(C) makes such home mortgage loans as, in the judgment of the Board, are long-term loans (except that in the case of a savings bank, this subparagraph applies only if, in the judgment of the Board, its time deposits, as defined in section 19 of the Federal Reserve Act, warrant its making such loans). “(2) Qualified thrift lender.—An insured depository institution that is not a member on January 1, 1989, may become a member of a Federal Home Loan Bank only if— “(A) the insured depository institution has at least 10 percent of its total assets in residential mortgage loans; “(B) the insured depository institution’s financial condition is such that advances may be safely made to such institution; and “(C) the character of its management and its home-financing policy are consistent with sound and economical home financing. An insured depository institution commencing its initial business operations after January I, 1989, may become a member of a Federal Home Loan Bank if it complies with regulations and orders prescribed by the Board for the 10 percent asset requirement (described in the preceding sentence) within one year after the commencement of its operations.”. (c) Repeal of Section 27.—Section 27 of the Federal Home Loan Bank Act (12 U.S.C. 1447) is hereby repealed.