DIRECTORS.

SEC. 1202. DIRECTORS. Section 7 of the Federal Home Loan Bank Act (12 U.S.C. 1427) is amended—(1) by striking subsection (a) and inserting the following:“(a) Number; Election; Qualifications; Conflicts of Interest.—“(1) In general.—Subject to paragraphs (2) through (4), the management of each Federal Home Loan Bank shall be vested in a board of 13 directors, or such other number as the Director determines appropriate.“(2) Board makeup.—The board of directors of each Bank shall be comprised of—“(A) member directors, who shall comprise at least the majority of the members of the board of directors; and“(B) independent directors, who shall comprise not fewer than ⅖ of the members of the board of directors.“(3) Selection criteria.—“(A) In general.—Each member of the board of directors shall be—“(i) elected by plurality vote of the members, in accordance with procedures established under this section; and“(ii) a citizen of the United States.“(B) Independent director criteria.—“(i) In general.—Each independent director that is not a public interest director under clause (ii) shall have demonstrated knowledge of, or experience in, financial management, auditing and accounting, risk management practices, derivatives, project development, or organizational management, or such other knowledge or expertise as the Director may provide by regulation.“(ii) Public interest.—Not fewer than 2 of the independent directors shall have more than 4 years of experience in representing consumer or community interests on banking services, credit needs, housing, or financial consumer protections.“(iii) Conflicts of interest.—No independent director may, during the term of service on the board of directors, serve as an officer of any Federal Home Loan Bank or as a director, officer, or employee of any member of a Bank, or of any person that receives advances from a Bank.“(4) Definitions.—For purposes of this section, the following definitions shall apply:“(A) Independent director.—The terms ‘independent director’ and ‘independent directorship’ mean a member of the board of directors of a Federal Home Loan Bank who is a bona fide resident of the district in which the Federal Home Loan Bank is located, or the directorship held by such a person, respectively.“(B) Member director.—The terms ‘member director’ and ‘member directorship’ mean a member of the board 122 STAT. 2784 of directors of a Federal Home Loan Bank who is an officer or director of a member institution that is located in the district in which the Federal Home Loan Bank is located, or the directorship held by such a person, respectively.”;(2) by striking “elective” each place that term appears, other than in subsections (d), (e), and (f), and inserting “member”;(3) in subsection (b)—(A) by striking the subsection heading and all that follows through “Each elective directorship” and inserting the following:“(b) Directorships.—“(1) Member directorships.—Each member directorship”; and(B) by adding at the end the following:“(2) Independent directorships.—“(A) Elections.—Each independent director—“(i) shall be elected by the members entitled to vote, from among eligible persons nominated, after consultation with the Advisory Council of the Bank, by the board of directors of the Bank; and“(ii) shall be elected by a plurality of the votes of the members of the Bank at large, with each member having the number of votes for each such directorship as it has under paragraph (1) in an election to fill member directorships.“(B) Criteria.—Nominees shall meet all applicable requirements prescribed in this section.“(C) Nomination and election procedures.—Procedures for nomination and election of independent directors shall be prescribed by the bylaws of each Federal Home Loan Bank, in a manner consistent with the rules and regulations of the Agency.”;(4) in subsection (c)—(A) by striking “elective” each place that term appears and inserting “member”, except—(i) in the second sentence, the second place that term appears; and(ii) each place that term appears in the fifth sentence; and(B) in the second sentence—(i) by inserting “(A) except as provided in clause (B) of this sentence,” before “if at any time”; and(ii) by inserting before the period at the end the following: “, and (B) clause (A) of this sentence shall not apply to the directorships of any Federal Home Loan Bank resulting from the merger of any 2 or more such Banks”;(5) in subsection (d)—(A) in the first sentence—(i) by striking “, whether elected or appointed,”; and(ii) by striking “3 years” and inserting “4 years”;(B) in the second sentence—122 STAT. 2785(i) by striking “Federal Home Loan Bank System Modernization Act of 1999” and inserting “Federal Housing Finance Regulatory Reform Act of 2008”;(ii) by striking “⅓” and inserting “¼”; and(iii) by striking “or appointed”; and(C) in the third sentence—(i) by striking “an elective” each place that term appears and inserting “a”; and(ii) by striking “in any elective directorship or elective directorships”;(6) in subsection (f)—(A) by striking paragraph (2);(B) by striking “appointed or” each place that term appears; and(C) in paragraph (3)—(i) by striking “(3) Elected bank directors.—” and inserting “(2) Election process.—”; and(ii) by striking “elective” each place that term appears;(7) in subsection (i)—(A) in paragraph (1), by striking “Subject to paragraph (2), each” and inserting “Each”; and(B) by striking paragraph (2) and inserting the following:“(2) Annual report.—The Director shall include, in the annual report submitted to the Congress pursuant to section 1319B of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, information regarding the compensation and expenses paid by the Federal Home Loan Banks to the directors on the boards of directors of the Banks.”; and(8) by adding at the end the following:“(l) Transition Rule.—Any member of the board of directors of a Bank elected or appointed in accordance with this section prior to the date of enactment of this subsection may continue to serve as a member of that board of directors for the remainder of the existing term of service.”.