MANAGEMENT OF BANKS.

SEC. 606. MANAGEMENT OF BANKS. (a) Board of Directors.—Section 7 of the Federal Home Loan Bank Act (12 U.S.C. 1427(d)) is amended— (1) in subsection (a), by striking “and bona fide residents of the district in which such bank is located” and inserting 113 STAT. 1453“, and each of whom shall be either a bona fide resident of the district in which such bank is located or an officer or director of a member of such bank located in that district”; (2) in subsection (d), by striking the first sentence and inserting the following: “The term of each director, whether elected or appointed, shall be 3 years. The board of directors of each Federal home loan bank and the Finance Board shall adjust the terms of members first elected or appointed after the date of the enactment of the Federal Home Loan Bank System Modernization Act of 1999 to ensure that the terms of the members of the board of directors are staggered with approximately ⅓ of the terms expiring each year.”; and (3) by striking subsection (g) and inserting the following: “(g) Chairperson and Vice Chairperson.— “(1) Election.—The Chairperson and Vice Chairperson of the board of directors of each Federal home loan bank shall be elected by a majority of all the directors of such bank from among the directors of the bank. “(2) Terms.—The term of office of the Chairperson and the Vice Chairperson of the board of directors of a Federal home loan bank shall be 2 years. “(3) Acting chairperson.—In the event of a vacancy in the position of Chairperson of the board of directors or during the absence or disability of the Chairperson, the Vice Chairperson shall act as Chairperson. “(4) Procedures.—The board of directors of each Federal home loan bank shall establish procedures, in the bylaws of such board, for designating an acting chairperson for any period during which the Chairperson and the Vice Chairperson are not available to carry out the requirements of that position for any reason and removing any person from any such position for good cause.”. (b) Compensation.—Section 7(i) of the Federal Home Loan Bank Act (12 U.S.C. 1427(i)) is amended— (1) by striking “(i) Each bank may pay its directors” and inserting “(i) Directors’ Compensation.— “(1) In general.—Subject to paragraph (2), each bank may pay its directors”; and (2) by adding at the end the following new paragraph: “(2) Limitation.— “(A) In general.—The annual salary of each of the following members of the board of directors of a Federal home loan bank may not exceed the amount specified: “In the case of the— The annual compensation may not exceed— Chairperson ........................................................................... $25,000 Vice Chairperson ................................................................... $20,000 All other members ................................................................. $15,000. “(B) Adjustment.—Beginning January 1, 2001, each dollar amount referred to in the table in subparagraph (A) shall be adjusted annually by the Finance Board, based on the annual percentage increase, if any, in the Consumer Price Index for all urban consumers, as published by the Department of Labor. “(C) Expenses.—Subparagraph (A) shall not be construed as prohibiting the reimbursement of expenses 113 STAT. 1454incurred by members of the board of directors of any Federal home loan bank in connection with service on the board of directors.”. (c) Repeal of Sections 22A and 27.—The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.) is amended by striking sections 22A (12 U.S.C. 1442a) and 27 (12 U.S.C. 1447). (d) Section 12.—Section 12 of the Federal Home Loan Bank Act (12 U.S.C. 1432) is amended— (1) in subsection (a)— (A) by striking “, but, except” and all that follows through “ten years”; (B) by striking “subject to the approval of the Board” the first place that term appears; (C) by striking “and, by its Board of directors,” and all that follows through “agent of such bank,” and inserting “and, by the board of directors of the bank, to prescribe, amend, and repeal by-laws governing the manner in which its affairs may be administered, consistent with applicable laws and regulations, as administered by the Finance Board. No officer, employee, attorney, or agent of a Federal home loan bank”; and (D) by striking “Board of directors” where such term appears in the penultimate sentence and inserting “board of directors”; and (2) in subsection (b), by striking “loans banks” and inserting “loan banks”. (e) Powers and Duties of Federal Housing Finance Board.— (1) Issuance of notices of violations.—Section 2B(a) of the Federal Home Loan Bank Act (12 U.S.C. 1422b(a)) is amended by adding at the end the following new paragraphs: “(5) To issue and serve a notice of charges upon a Federal home loan bank or upon any executive officer or director of a Federal home loan bank if, in the determination of the Finance Board, the Bank, executive officer, or director is engaging or has engaged in, or the Finance Board has reasonable cause to believe that the Bank, executive officer, or director is about to engage in an unsafe or unsound practice in conducting the business of the bank, or any conduct that violates any provision of this Act or any law, order, rule, or regulation or any condition imposed in writing by the Finance Board in connection with the granting of any application or other request by the Bank, or any written agreement entered into by the Bank with the agency, in accordance with the procedures provided in subsection (c) or (f) of section 1371 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992. Such authority includes the same authority to issue an order requiring a party to take affirmative action to correct conditions resulting from violations or practices or to limit activities of a Bank or any executive officer or director of a Bank as appropriate Federal banking agencies have to take with respect to insured depository institutions under paragraphs (6) and (7) of section 8(b) of the Federal Deposit Insurance Act, and to have all other powers, rights, and duties to enforce this Act with respect to the Federal home loan banks and their executive officers and directors as the Office of Federal Housing Enterprise Oversight has to enforce the 113 STAT. 1455Federal Housing Enterprises Financial Safety and Soundness Act of 1992, the Federal National Mortgage Association Charter Act, or the Federal Home Loan Mortgage Corporation Act with respect to the Federal housing enterprises under subtitle C (other than section 1371) of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992. “(6) To address any insufficiencies in capital levels resulting from the application of section 5(f) of the Home Owners’ Loan Act. “(7) To act in its own name and through its own attorneys— “(A) in enforcing any provision of this Act or any regulation promulgated under this Act; or “(B) in any action, suit, or proceeding to which the Finance Board is a party that involves the Board’s regulation or supervision of any Federal home loan bank.”. (2) Technical amendment.—Section 111 of Public Law 93–495 (12 U.S.C. 250) is amended by striking “Federal Home Loan Bank Board,” and inserting “Director of the Office of Thrift Supervision, the Federal Housing Finance Board,”. (f) Eligibility to Secure Advances.— (1) Section 9.—Section 9 of the Federal Home Loan Bank Act (12 U.S.C. 1429) is amended— (A) in the second sentence, by striking “with the approval of the Board”; and (B) in the third sentence, by striking “, subject to the approval of the Board,”. (2) Section 10.—Section 10 of the Federal Home Loan Bank Act (12 U.S.C. 1430) is amended— (A) in subsection (c)— (i) in the first sentence, by striking “Board” and inserting “Federal home loan bank”; and (ii) by striking the second sentence; and (B) in subsection (d)— (i) in the first sentence, by striking “and the approval of the Board”; and (ii) by striking “Subject to the approval of the Board, any” and inserting “Any”. (g) Section 16.—Section 16(a) of the Federal Home Loan Bank Act (12 U.S.C. 1436(a)) is amended— (1) in the third sentence— (A) by striking “net earnings” and inserting “previously retained earnings or current net earnings”; and (B) by striking “, and then only with the approval of the Federal Housing Finance Board”; and (2) by striking the fourth sentence. (h) Section 18.—Section 18(b) of the Federal Home Loan Bank Act (12 U.S.C. 1438(b)) is amended by striking paragraph (4).