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U.S. Code as of:
01/19/04
Section 1427. Directors
(a) Number; appointment and election; qualifications; conflicts of
interest
The management of each Federal home loan bank shall be vested in
a board of fourteen directors, eight of whom shall be elected by
the members as hereinafter provided in this section and six of whom
shall be appointed by the Board referred to in section 1422a of
this title, all of whom shall be citizens of the United States, 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: Provided, That in any
district which includes five or more States the Board may by
regulation increase the elective directors to a number not
exceeding thirteen and may increase the appointive directors to a
number not exceeding three-fourths the number of elective
directors: Provided further, That if at any time the number of
elective directors in the case of any district is not at least
equal to the number of States in such district the Board shall
exercise the authority conferred by the next preceding proviso so
as to increase such elective directors to a number at least equal
to the number of States in such district. At least 2 of the Federal
Home Loan Bank directors who are appointed by the Board shall be
representatives chosen from organizations with more than a 2-year
history of representing consumer or community interests on banking
services, credit needs, housing, or financial consumer protections.
No Federal Home Loan Bank director who is appointed pursuant to
this subsection may, during such Bank director's term of office,
serve as an officer of any Federal Home Loan Bank or a director or
officer of any member of a Bank, or hold shares, or any other
financial interest in, any member of a Bank.
(b) Elective directorships; qualifications; nominations and
election
Each elective directorship shall be designated by the Board as
representing the members located in a particular State, and shall
be filled by a person who is an officer or director of a member
located in that State, each of which members shall be entitled to
nominate an eligible person for such directorship, and such office
shall be filled from such nominees by a plurality of the votes
which such members may cast in an election held for the purpose of
filling such office, in which election each such member may cast
for such office a number of votes equal to the number of shares of
stock in such bank required by this chapter to be held by such
member at the end of the calendar year next preceding the election,
as determined pursuant to regulation of the Board, but not in
excess of the average number of shares of stock in such bank
required by this chapter to be held at the end of such calendar
year by the respective members of such bank located in such State,
as so determined. No person who is an officer or director of a
member that fails to meet any applicable capital requirement is
eligible to hold the office of Federal Home Loan Bank director. As
used in this subsection and in subsection (c) of this section, the
term "member" means a member of a Federal home loan bank which was
a member of such bank at the end of such calendar year.
(c) Apportionment among States in bank district; designation of
State location
The number of elective directorships designated as representing
the members located in each separate State in a bank district shall
be determined by the Board in the approximate ratio of the
percentage of the required stock, as determined pursuant to
regulation of the Board, of the members located in that State at
the end of the calendar year next preceding the date of the
election to the total required stock, as so determined, of all
members of such bank at the end of such year, except that in the
case of each State such number shall not be less than one and shall
not be more than six. Notwithstanding any other provision of this
section, if at any time the number of elective directorships so
designated as representing the members located in any State would
not be at least equal to the total number of elective directorships
which, on December 31, 1960, were filled by officers or directors
of members whose principal places of business were located in such
State, the Board shall add to the board of directors of the bank of
the district in which such State is located such number of elective
directorships, and shall so designate the directorship or
directorships thus added, that the number of elective directorships
designated as representing the members located in such State will
equal said total number. Any elective directorship so added shall
exist only until the expiration of its first term. The Board shall,
with respect to each member of a Federal home loan bank, designate
the State in the district of such bank in which such member shall,
for the purposes of this subsection and subsection (b) of this
section, be deemed to be located, and may from time to time change
any such designation, but if the principal place of business of any
such member is located in a State of such district it shall be the
duty of the Board to designate such State as the State in which
such member shall, for said purposes, be deemed to be located. As
used in the second sentence of this subsection, the term "total
number of elective directorships" means the total number of
elective directorships on the board of directors of the bank of the
district in which such State was located on December 31, 1960, and
the term "members" where used for the second time in such sentence
means members of such bank.
(d) Terms; rules and regulations governing nominations and
elections
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 November 12, 1999, to ensure that the terms of
the members of the board of directors are staggered with
approximately 1/3 of the terms expiring each year. If any person,
before or after, or partly before and partly after, September 8,
1961, has been elected to each of three consecutive full terms as
an elective director of a Federal home loan bank in any elective
directorship or elective directorships and has served for all or
part of each of said terms, such person shall not be eligible for
election to an elective directorship of such bank for a term which
begins earlier than two years after the expiration of the last
expiring of said three terms. The Board is authorized to prescribe
such rules and regulations as it may deem necessary or appropriate
for the nomination and election of directors of Federal home loan
banks, including, without limitation on the generality of the
foregoing, rules and regulations with respect to the breaking of
ties and with respect to the inclusion of more than one
directorship on a single ballot and the methods of voting and of
determining the results of voting in such cases.
(e) Continuation of existing terms; directorship for the
Commonwealth of Puerto Rico
Each term, outstanding on the effective date of the amendment to
this section abolishing the division of elective directors into
classes, of an elective or appointive directorship then existing
shall continue until its original date of expiration, and any
elective or appointive directorship in existence on said date shall
continue to exist to the same extent as if it had been established
by or under this section on or after said date. The Board in its
discretion may shorten the next succeeding term of any such
elective directorship to one year, and may fill such term by
appointment. The term "States" or "State" as used in this section
shall mean the States of the Union, the District of Columbia, and
the Commonwealth of Puerto Rico. The Board, by regulation or
otherwise, may add an additional elective directorship to the board
of directors of the bank of any district in which the Commonwealth
of Puerto Rico is included at the time such directorship is added
and which does not then include five or more States, may fix the
commencement and the duration, which shall not exceed two years, of
the initial term of any directorship so added, and may fill any
such initial term by appointment: Provided, That (1) any
directorship added pursuant to the foregoing provisions of this
sentence shall be designated by the Board, pursuant to subsection
(b) of this section, as representing the members located in the
Commonwealth of Puerto Rico, (2) such designation of such
directorship shall not be changed, and (3) such directorship shall
automatically cease to exist if and when the Commonwealth of Puerto
Rico ceases to be included in such district.
(f) Vacancies
(1) In general
A Bank director appointed or elected to fill a vacancy shall be
appointed or elected for the unexpired term of his or her
predecessor in office.
(2) Appointed Bank directors
In the event of a vacancy in any appointive Bank directorship,
such vacancy shall be filled through appointment by the Board for
the unexpired term. If any appointive Bank director shall cease
to have the qualifications set forth in subsection (a) of this
section, the office held by such person shall immediately become
vacant, but such person may continue to act as a Bank director
until his or her successor assumes the vacated office or the term
of such office expires, whichever occurs first.
(3) Elected Bank directors
In the event of a vacancy in any elective Bank directorship,
such vacancy shall be filled by an affirmative vote of a majority
of the remaining Bank directors, regardless of whether such
remaining Bank directors constitute a quorum of the Bank's board
of directors. A Bank director so elected shall satisfy the
requirements for eligibility which were applicable to his
predecessor. If any elective Bank director shall cease to have
any qualification set forth in this section, the office held by
such person shall immediately become vacant, and such person
shall not continue to act as a Bank director.
(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.
(h) Appointment where members hold less than $1,000,000 of capital
stock
If at any time when nominations are required members shall hold
less than $1,000,000 of the capital stock of the Federal home loan
bank, the Board shall appoint a director or directors to fill the
place or places for which such nominations are required, and the
Board may, prior to the filing of the certificate mentioned in
section 1432 of this title, appoint directors who shall be
respectively designated by it as appointive directors and as
elective directors, in accordance with the provisions of this
section.
(i) Directors' compensation
(1) In general
Subject to paragraph (2), each bank may pay its directors
reasonable compensation for the time required of them, and their
necessary expenses, in the performance of their duties, in
accordance with the resolutions adopted by such directors,
subject to the approval of the board.
(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 incurred by members of the board of
directors of any Federal home loan bank in connection with
service on the board of directors.
(j) Duties of directors
Such board of directors shall administer the affairs of the bank
fairly and impartially and without discrimination in favor of or
against any member, and shall, subject to the provisions hereof,
extend to each institution authorized to secure advances such
advances as may be made safely and reasonably with due regard for
the claims and demands of other institutions, and with due regard
to the maintenance of adequate credit standing for the Federal Home
Loan Bank and its obligations.
(k) Indemnification of directors, officers, and employees
The board of directors of each Bank shall determine the terms and
conditions under which such Bank may indemnify its directors,
officers, employees or agents.
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