if requested by the Board. The Council may select its chairman, vice chairman, and secretary, and adopt methods of procedure, and shall have power "(1) To confer with the Board and board of trustees of the Federal Savings and Loan Insurance Corporation on general business conditions, and on special conditions affecting the Federal Home Loan Banks and their members and such Corporation. "(2) To request information, and to make recommendations with respect to matters within the jurisdiction of the Board and the board of trustees of such Corporation.' Recommendations Amend section 8a as follows: (1) by inserting in the second sentence, after the word "shall", the language "at the time of his election"; (2) by striking in subdivision numbered (1) the language "and board of trustees of the Federal Savings and Loan Insurance Corporation"; (3) by striking in subdivision numbered (1) the language "such Corporation" and inserting in lieu thereof the language "the Federal Savings and Loan Insurance Corporation"; and (4) by striking in subdivision numbered (2) the language "and the board of trustees of such Corporation". Reasons Amendment (1) is needed in order to make clear that a member of the Federal Savings and Loan Advisory Council who, at the time of his election, is a resident of the district for which he is elected does not cease to be a member if he ceases to be such a resident; since the term is only 1 year, it would appear that a change of residence should not require that the membership be vacated. Amendments (2), (3), and (4) would remove obsolete references to the board of trustees of the Federal Savings and Loan Insurance Corporation, which since Reorganization Plan No. 3 of 1947 has been under the present Federal Home Loan Bank Board rather than under a separate board of trustees. 125. ADVANCES BY FEDERAL HOME LOAN BANKS Existing law Section 10 of the Federal Home Loan Bank Act, as amended: "(a) Each Federal Home Loan Bank is authorized to make advances to its members, upon the security of home mortgages, or obligations of the United States, or obligations fully guaranteed by the United States, subject to such regulations, restrictions, and limitations as the Board may prescribe. Any such advance shall be subject to the following limitations as to amount: "(1) If secured by a mortgage insured under the provisions of title I, title II, title VI, title VIII, or title IX of the National Housing Act, the advance may be for an amount not in excess of 90 per centum of the unpaid principal of the mortgage loan. "(2) If secured by a home mortgage given in respect of an amortized home mortgage loan which was for an original term of six years or more, or in cases where shares of stock, which are pledged as security for such loan, mature in a period of six years or more, the advance may be for an amount not in excess of 65 per centum of the unpaid principal of the home mortgage loan; but in no case shall the amount of the advance exceed 60 per centum of the value of the real estate securing the home mortgage loan. "(3) If secured by a home mortgage given in respect of any other home mortgage loan, the advance shall not be for an amount in excess of 50 per centum of the unpaid principal of the home mortgage loan; but in no case shall the amount of such advance exceed 40 per centum of the value of the real estate securing the home mortgage loan. "(4) If secured by obligations of the United States, or obligations fully guaranteed by the United States, the advance shall not be for an amount in excess of the face value of such obligations. "(b) No home mortgage shall be accepted as collateral security for an advance by a Federal Home Loan Bank if, at the time such advance is made (1) the home mortgage loan secured by it has more than twenty-five years to run to maturity, unless such home mortgage is insured under the National Housing Act, as amended, or insured or guaranteed under the Servicemen's Readjustment Act of 1944, as amended, or (2) the home mortgage exceeds $35,000, or (3) is past due more than six months when presented, unless the amount of the debt secured by such home mortgage is less than 50 per centum of the value of the real estate with respect to which the home mortgage was given, as such real estate was appraised when the home mortgage was made. For the purposes of this subsection and subsection (a) the value of real estate shall be as of the time the advance is made and shall be established by such certification by the borrowing institution, or such other evidence, as the board may require. For the purposes of this section, each Federal Home Loan Bank shall have power to make, or to cause or require to be made, such appraisals and other investigations as it may deem necessary. No home mortgage otherwise eligible to be accepted as collateral security for an advance by a Federal Home Loan Bank shall be accepted if any director, officer, employee, attorney, or agent of the Federal Home Loan Bank or of the borrowing institution is personally liable thereon, unless the board has specifically approved by formal resolution such acceptance. (c) Such advances shall be made upon the note or obligation of the member or nonmember borrower secured as provided in this section, bearing such rate of interest as the board may approve or determine, and the Federal Home Loan Bank shall have a lien upon and shall hold the stock of such member as further collateral security for all indebtedness of the member to the Federal Home Loan Bank. At no time shall the aggregate outstanding advances made by any Federal Home Loan Bank to any member exceed twelve times the amounts paid in by such member for outstanding capital stock held by it, or made to a nonmember borrower exceed twelve times the value of the security required to be deposited under section 6 (e). "(d) The institution applying for an advance shall enter into a primary and unconditional obligation to pay off all advances, together with interest and any unpaid costs and expenses in connection therewith according to the terms under which they were made, in such form as shall meet the requirements of the bank and the approval of the board. The bank shall reserve the right to require at any time, when deemed necessary for its protection, deposits of additional collateral security or substitutions of security by the borrowing institu tion, and each borrowing institution shall assign additional or substituted security when and as so required. Subject to the approval of the board, any Federal Home Loan Bank shall have power to sell to any other Federal Home Loan Bank, with or without recourse, any advance made under the provisions of this Act, or to allow to such bank a participation therein, and any other Federal Home Loan Bank shall have power to purchase such advance or to accept a participation therein, together with an appropriate assignment of security therefor." Recommendation Amend section 10 as follows: (1) by striking in subdivision (1) of subsection (a) the language beginning "insured under" and ending "the National Housing Act" and inserting in lieu thereof the language "insured under any provision of the National Housing Act as heretofore or hereafter in force, or guaranteed under any provision of the Servicemen's Readjustment Act of 1944 as so in force"; (2) by striking in subdivision (2) of subsection (a) the language "which was for an original term of six years or more, or in cases where shares of stock, which are pledged as security for such loan, mature in a period of six years or more"; (3) by striking in subsection (b) the language "with respect to which the home mortgage was given, as such real estate was appraised when the home mortgage loan was made" and inserting in lieu thereof the language "securing the mortgage loan"; (4) by striking in the first sentence of subsection (c) the language "or nonmember borrower"; (5) by striking the last sentence of subsection (c) the language "or made to a nonmember borrower exceed twelve times the value of the security required to be deposited under section 6 (e)"; and (6) by adding at the end of said section a new subsection, to be lettered "(e)" and to read as follows: "(e) Subject to such restrictions, limitations, and conditions as the Board by regulations or otherwise may prescribe, security required or permitted to be taken by a Federal Home Loan Bank under this section or otherwise may be taken by pledge, assignment, or equitable or other lien, and may be placed with or left with the member or nonmember borrower under trust receipt or other agreement." Reasons Amendment (1) would obviate the necessity of future amendment of the Federal Home Loan Bank Act in the event that new mortgageinsurance titles are added to the National Housing Act and would place mortgages guaranteed under the Servicemen's Readjustment Act of 1944 on the same basis for the purpose of security for Federal home loan bank advances as mortgages insured under the National Housing Act. Amendment (2) would remove matter which is overlapping in view of the amendment to subdivision (8) of section 2 hereinbefore proposed. Amendment (3) would remove an inconsistency between the first sentence of subsection (b) and the second sentence of that subsection with respect to the time as of which the valuation of real-estate security is to be made. Amendments (4) and (5) would remove obsolete matter. Amendment (6) would provide a specific statutory basis for methods of handling collateral which are currently being followed. Existing law 126. ADVANCES FOR HOME REPAIRS Section 10a of the Federal Home Loan Bank Act, as amended: "Until July 1, 1936, each Federal Home Loan Bank is authorized to make advances to its members, in order to enable such members to finance home repairs, improvements, and alterations. Such advances shall not be subject to the provisions and restrictions of section 10 of this Act, but shall be made upon the security of notes representing obligations incurred pursuant to, and insurable under, section 2 of the National Housing Act. Advances made under the terms of this section shall be at such rates of interest and upon such terms and conditions as shall be determined by the Federal Home Loan Bank Board." Recommendation Repeal section 10a. Reason To remove an obsolete provision. 127. OBLIGATIONS OF FEDERAL HOME LOAN BANKS Existing law Subsections (a), (b), and (c) of section 11 of the Federal Home Loan Bank Act, as amended: "(a) Each Federal Home Loan Bank shall have power, subject to rules and regulations prescribed by the board to borrow and give security therefor and to pay interest thereon, to issue debentures, bonds, or other obligations upon such terms and conditions as the board may approve, and to do all things necessary for carrying out the provisions of this Act and all things incident thereto. "(b) The board may issue consolidated Federal Home Loan Bank debentures which shall be the joint and several obligations of all Federal Home Loan Banks organized and existing under this Act, in order to provide funds for any such bank or banks, and such debentures shall be issued upon such terms and conditions as the board may prescribe. No such debentures shall be issued at any time if any of the assets of any Federal Home Loan Bank are pledged to secure any debts or subject to any lien, and neither the board nor any Federal, Home Loan Bank shall have power to pledge any of the assets of any Federal Home Loan Bank, or voluntarily to permit any lien to attach to the same while any of such debentures so issued are outstanding. The debentures issued under this section and outstanding shall at no time exceed five times the total paid-in capital of all the Federal Home Loan Banks as of the time of the issue of such debentures. It shall be the duty of the board not to issue debentures under this section in excess of the notes or obligations of member institutions held and secured under section 10 (a) of this Act by all the Federal Home Loan Banks. "(c) At any time that no debentures are outstanding under this Act, or in order to refund all outstanding consolidated debentures issued under this section, the board may issue consolidated Federal Home Loan Bank bonds which shall be the joint and several obliga tions of all the Federal Home Loan Banks, and shall be secured and be issued upon such terms and conditions as the Board may prescribe." Recommendation Amend subsection (a) by adding thereto at the end thereof the following new sentence: "Debentures, bonds, or other obligations. issued or purporting to be issued under this subsection or under subsection (b) or subsection (c) shall be valid and binding notwithstanding that a person or persons purporting to have executed or attested the same may have died, become under disability, or ceased to hold office before the issuance thereof." Reason It is necessary to prepare the necessary documents for security issues, including facsimile signatures of executing and attesting officials, in advance of the date on which the same will be physically issued. The occurrence of the stated circumstances after such preparation and before actual issue would cause unnecessary confusion and expense. In the recent change of Chairmen of the Board it was not known from day to day when the successor of the existing Chairman might be appointed and take office, and it was necessary to make handstamped changes on a large number of unissued securities so as to provide for execution by a member other than the Chairman, in case the change of Chairmen should take place between the date of approval of the particular series and the date of issuance thereof. The suggested amendment would obviate the confusion and expense which may now arise. 128. INTERBANK TRANSACTIONS OF FEDERAL HOME LOAN BANKS Existing law Subsection (f) of section 11 of the Federal Home Loan Bank Act, as amended: "(f) The Board is authorized and empowered to permit, or whenever in the judgment of at least four members of the board an emergency exists requiring such action, to require, Federal Home Loan Banks, upon such terms and conditions as the board may prescribe, to rediscount the discounted notes of members held by other Federal Home Loan Banks, or to make loans to, or make deposits with, such other Federal Home Loan Banks, or to purchase any bonds or debentures issued under this section." Recommendations Amend subsection (f) as follows: (1) by striking the language "at least four members of", and (2) by striking the language "bonds or debentures" and inserting in lieu thereof "debentures, bonds, or other obligations". Reasons Amendment (1) would repeal an obsolete provision. The reference to "at least four members of" the Board applied to the original Federal Home Loan Bank Board of five members. By Reorganization Plan No. 3 of 1947, all of the powers of said Board, or of any member or members thereof (with certain exceptions not here material) were transferred to a new three-member board, now known as |