FEDERAL HOME LOAN BANK RESERVES.

SEC. 724. FEDERAL HOME LOAN BANK RESERVES. (a) In General.—Section 16(a) of the Federal Home Loan Bank Act (12 U.S.C. 1436(a)) is amended— (1) by striking the first three sentences and inserting in lieu thereof: “Each Federal Home Loan Bank may carry to a reserve 103 STAT. 429account from time-to-time such portion of its net earnings as may be determined by its board of directors.”; and (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, the preceding sentence shall be applied by substituting ‘previously retained earnings or current net earnings’ for ‘net earnings’.”. (b) Effective Date.—The amendment made by subsection (a)(1) shall take effect on January 1, 1992.