103 STAT. 416 PUBLIC LAW 101-73—AUG. 9, 1989 "(B) is subject to inspection and regulation under the banking laws, or under similar laws, of the State or of the United States; and "(C) makes such home mortgage loans as, in the judgment of the Board, are long-term loans (except that in the case of a savings bank, this subparagraph applies only if, in the judgment of the Board, its time deposits, as defined in section 19 of the Federal Reserve Act, warrant its making such loans). "(2) QuAUFiED THRIFT LENDER.— An insured depository institution that is not a member on January 1, 1989, may become a member of a Federal Home Loan Bank only if— "(A) the insured depository institution has at least 10 percent of its total assets in residential mortgage loans; "(B) the insured depository institution's financial condi- tion is such that advances may be safely made to such institution; and J,. "(C) the character of its management and its home- financing policy are consistent with sound and economical home financing. An insured depository institution commencing its initial business operations after January 1, 1989, may become a member of a Federal Home Loan Bank if it complies with regulations and orders prescribed by the Board for the 10 percent asset requirement (de- scribed in the preceding sentence) within one year after the commencement of its operations.". (c) REPEAL OF SECTION 27. —Section 27 of the Federal Home Loan Bank Act (12 U.S.C. 1447) is hereby repealed. SEC. 705. REPEAL OF PROVISION RELATING TO RATE OF INTEREST ON DEPOSITS. Section 5B of the Federal Home Loan Bank Act (12 U.S.C. 1425b) is hereby repealed.
SEC. 706. CAPITAL STOCK. Section 6 of the Federal Home Loan Bank Act (12 U.S.C. 1426) is amended— (1) by striking subsections (a), (e), (f), and (g) and redesignating subsections (b), (c), (d), (h), (i), (j), (k), and (m) as subsections (a), (b), (c), (d), (e), (f), (g), and (h), respectively; (2) by striking the second sentence of subsection (e) (as re- designated by paragraph (1) of this section) and inserting the following: "If any member's membership in a Federal Home Loan Bank is terminated, the indebtedness of such member to the Federal Home Loan Bank shall be liquidated in an orderly manner (as determined by the Federal Home Loan Bank), and upon completion of such liquidation, the capital stock in the Federal Home Loan Bank owned by such member shall be surrendered and canceled. Any such liquidation shall be deemed a prepayment of any such indebtedness, and shall be subject to any penalties or other fees applicable to such prepayment."; and (3) in subsection (h) (as redesignated by paragraph (1) of this section), by striking "charter" and all that follows through the end period and inserting "charter as a Federal savings associa- tion (as defined in section 3 of the Federal Deposit Insurance Act).".
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