ADVANCES TO MEMBERS; COLLATERAL.

SEC. 604. ADVANCES TO MEMBERS; COLLATERAL. (a) In General.—Section 10(a) of the Federal Home Loan Bank Act (12 U.S.C. 1430(a)) is amended— (1) by redesignating paragraphs (1) through (4) as subparagraphs (A) through (D), respectively, and indenting appropriately; (2) by striking “(a) Each” and inserting the following: “(a) In General.— “(1) All advances.—Each”; (3) by striking the second sentence and inserting the following: “(2) Purposes of advances.—A long-term advance may only be made for the purposes of— “(A) providing funds to any member for residential housing finance; and “(B) providing funds to any community financial institution for small businesses, small farms, and small agribusinesses.”; (4) by striking “A Bank” and inserting the following: “(3) Collateral.—A Bank”; (5) in paragraph (3) (as so designated by paragraph (4) of this subsection)— (A) in subparagraph (C) (as so redesignated by paragraph (1) of this subsection) by striking “Deposits” and inserting “Cash or deposits”; (B) in subparagraph (D) (as so redesignated by paragraph (1) of this subsection), by striking the second sentence; and (C) by inserting after subparagraph (D) (as so redesignated by paragraph (1) of this subsection) the following new subparagraph: “(E) Secured loans for small business, agriculture, or securities representing a whole interest in such secured loans, in the case of any community financial institution.”; (6) in paragraph (5)— (A) in the second sentence, by striking “and the Board”; (B) in the third sentence, by striking “Board” and inserting “Federal home loan bank”; and (C) by striking “(5) Paragraphs (1) through (4)” and inserting the following: “(4) Additional bank authority.—Subparagraphs (A) through (E) of paragraph (3)”; and (7) by adding at the end the following: “(5) Review of certain collateral standards.—The Board may review the collateral standards applicable to each Federal home loan bank for the classes of collateral described in subparagraphs (D) and (E) of paragraph (3), and may, if necessary for safety and soundness purposes, require an 113 STAT. 1452increase in the collateral standards for any or all of those classes of collateral. “(6) Definitions.—For purposes of this subsection, the terms ‘small business’, ‘agriculture’, ‘small farm’, and ‘small agribusiness’ shall have the meanings given those terms by regulation of the Finance Board.”. (b) Clerical Amendment.—The section heading for section 10 of the Federal Home Loan Bank Act (12 U.S.C. 1430) is amended to read as follows: “SEC. 10. ADVANCES TO MEMBERS.”. (c) Qualified Thrift Lender Status.—Section 10 of the Federal Home Loan Bank Act (12 U.S.C. 1430) is amended by striking the first of the 2 subsections designated as subsection (e). (d) Federal Home Loan Bank Access.—Section 10(m)(3)(B) of the Home Owners’ Loan Act (12 U.S.C. 1467a(m)(3)(B)) is amended— (1) in clause (i), by striking subclause (III) and redesignating subclause (IV) as subclause (III); and (2) by striking clause (ii) and inserting the following: “(ii) Additional restrictions effective after 3 years.—Beginning 3 years after the date on which a savings association should have become a qualified thrift lender, or the date on which the savings association ceases to be a qualified thrift lender, as applicable, the savings association shall not retain any investment (including an investment in any subsidiary) or engage, directly or indirectly, in any activity, unless that investment or activity— “(I) would be permissible for the savings association if it were a national bank; and “(II) is permissible for the savings association as a savings association.”.