12 U.S.C. § 1424 — Eligibility for membership

**(a) Criteria for eligibility** (1) **In general** — Any building and loan association, savings and loan association, cooperative bank, homestead association, insurance company, savings bank, community development financial institution, or any insured depository institution (as defined in [section 1422 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1422&num=0&edition=prelim)), shall be eligible to become a member of a Federal Home Loan Bank if such institution— (A) is duly organized under the laws of any State or of the United States; (B) is subject to inspection and regulation under the banking laws, or under similar laws, of the State or of the United States or, in the case of a community development financial institution, is certified as a community development financial institution under the Community Development Banking and Financial Institutions Act of 1994 [[12 U.S.C. 4701](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4701&num=0&edition=prelim) et seq.].; 11 So in original. and (C) makes such home mortgage loans as, in the judgment of the Director, are long-term loans (except that in the case of a savings bank, this subparagraph applies only if, in the judgment of the Director, its time deposits, as defined in [section 461 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section461&num=0&edition=prelim), warrant its making such loans). (2) **Qualified 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 (other than a community financial institution) has at least 10 percent of its total assets in residential mortgage loans; (B) the insured depository institution’s financial condition is such that advances may be safely made to such institution; and (C) the character of its management and its home-financing policy are consistent with sound and economical home financing. (3) **Certain institutions** — 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 Director for the 10 percent asset requirement (described in the 22 So in original. The word “the” probably should not appear. paragraph (2)) within one year after the commencement of its operations. (4) **Limited exemption for community financial institutions** — A community financial institution that otherwise meets the requirements of paragraph (2) may become a member without regard to the percentage of its total assets that is represented by residential mortgage loans, as described in subparagraph (A) of paragraph (2). (5) **Certain privately insured credit unions** (A) *In general* — Subject to the requirements of subparagraph (B), a credit union shall be treated as an insured depository institution for purposes of determining the eligibility of such credit union for membership in a Federal home loan bank under paragraphs (1), (2), and (3). (B) *Certification by appropriate supervisor* (i) *In general* — For purposes of this paragraph and subject to clause (ii), a credit union which lacks Federal deposit insurance and which has applied for membership in a Federal home loan bank may be treated as meeting all the eligibility requirements for Federal deposit insurance only if the appropriate supervisor of the State in which the credit union is chartered has determined that the credit union meets all the eligibility requirements for Federal deposit insurance as of the date of the application for membership. (ii) *Certification deemed valid* — If, in the case of any credit union to which clause (i) applies, the appropriate supervisor of the State in which such credit union is chartered fails to make a determination pursuant to such clause by the end of the 6-month period beginning on the date of the application, the credit union shall be deemed to have met the requirements of clause (i). (C) *Security interests of Federal home loan bank not avoidable* — Notwithstanding any provision of State law authorizing a conservator or liquidating agent of a credit union to repudiate contracts, no such provision shall apply with respect to— (i) any extension of credit from any Federal home loan bank to any credit union which is a member of any such bank pursuant to this paragraph; or (ii) any security interest in the assets of such credit union securing any such extension of credit. (D) *Protection for certain Federal home loan bank advances* — Notwithstanding any State law to the contrary, if a Bank makes an advance under [section 1430 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1430&num=0&edition=prelim) to a State-chartered credit union that is not federally insured— (i) the Bank’s interest in any collateral securing such advance has the same priority and is afforded the same standing and rights that the security interest would have had if the advance had been made to a federally insured credit union; and (ii) the Bank has the same right to access such collateral that the Bank would have had if the advance had been made to a federally insured credit union. **(b) Location requirement** An institution eligible to become a member under this section may become a member only of, or secure advances from, the Federal Home Loan Bank of the district in which is located the institution’s principal place of business, or of the bank of a district adjoining such district, if demanded by convenience and then only with the approval of the Director. **(c) Inspection and regulation requirements** Notwithstanding the provisions of clause (2) of subsection (a) of this section requiring inspection and regulation under law as a condition with respect to eligibility for membership, any building and loan association which would be eligible to become a member of a Federal Home Loan Bank except for the fact that it is not subject to inspection and regulation under the banking laws or similar laws of the State in which such association is organized shall, upon subjecting itself to such inspection and regulation as the Director shall prescribe, be eligible to become a member.