CAPITAL STOCK.

SEC. 706. CAPITAL STOCK. Section 6 of the Federal Home Loan Bank Act (12 U.S.C. 1426) is amended— (1) by striking subsections (a), (e), (f), and (g) and redesignating subsections (b), (c), (d), (h), (i), (j), (k), and (m) as subsections (a), (b), (c), (d), (e), (f), (g), and (h), respectively; (2) by striking the second sentence of subsection (e) (as redesignated by paragraph (1) of this section) and inserting the following: “If any member’s membership in a Federal Home Loan Bank is terminated, the indebtedness of such member to the Federal Home Loan Bank shall be liquidated in an orderly manner (as determined by the Federal Home Loan Bank), and upon completion of such liquidation, the capital stock in the Federal Home Loan Bank owned by such member shall be surrendered and canceled. Any such liquidation shall be deemed a prepayment of any such indebtedness, and shall be subject to any penalties or other fees applicable to such prepayment.”; and (3) in subsection (h) (as redesignated by paragraph (1) of this section), by striking “charter” and all that follows through the end period and inserting “charter as a Federal savings association (as defined in section 3 of the Federal Deposit Insurance Act).”.