ELIGIBILITY CRITERIA.

SEC. 605. ELIGIBILITY CRITERIA. Section 4(a) of the Federal Home Loan Bank Act (12 U.S.C. 1424(a)) is amended— (1) in paragraph (2)(A), by inserting “(other than a community financial institution)” after “institution”; (2) in the matter immediately following paragraph (2)(C)— (A) by striking “An insured” and inserting the following: “(3) Certain institutions.—An insured”; and (B) by striking “preceding sentence” and inserting “paragraph (2)”; and (3) by adding at the end the following new paragraph: “(4) Limited exemption for community financial institutions.—A community financial institution that otherwise meets the requirements of paragraph (2) may become a member without regard to the percentage of its total assets that is represented by residential mortgage loans, as described in subparagraph (A) of paragraph (2).”.