12 U.S.C. § 1717a — Prohibition against sale of obligations by

Page 757 TITLE 12—BANKS AND BANKING § 1717a Executive Documents REORGANIZATION PLAN NO. 22 OF 1950 Eff. July 9, 1950, 15 F.R. 4365, 64 Stat. 1277 Prepared by the President and transmitted to the Sen- ate and the House of Representatives in Congress as- sembled, May 9, 1950, pursuant to the provisions of the Reorganization Act of 1949, approved June 20, 1949 [see 5 U.S.C. 901 et seq.]. FEDERAL NATIONAL MORTGAGE ASSOCIATION SECTION 1. TRANSFER OF ASSOCIATION AND ITS FUNCTIONS The Federal National Mortgage Association, together with its functions, is hereby transferred from the Re- construction Finance Corporation to the Housing and Home Finance Agency and shall be administered sub- ject to the direction and control of the Housing and Home Finance Administrator. SEC. 2. TRANSFERS TO THE HOUSING ADMINISTRATOR There are hereby transferred from the Reconstruc- tion Finance Corporation to the Housing and Home Fi- nance Administrator— (1) the notes of the Federal National Mortgage Asso- ciation payable to the Reconstruction Finance Cor- poration; (2) the capital stock of the Federal National Mort- gage Association; (3) the function of the Reconstruction Finance Cor- poration of making payments on its notes issued to the Secretary of the Treasury in an amount equal to (a) the unpaid principal of, and accrued interest on, the notes of the Federal National Mortgage Association trans- ferred under (1) above, (b) any funds of the Reconstruc- tion Finance Corporation transferred under the provi- sions of section 5 hereof, (c) the book value of any of- fice furniture and equipment of the Reconstruction Fi- nance Corporation transferred under the provisions of section 5 hereof, and (d) the par value of the capital stock of the Federal National Mortgage Association plus the amount of its surplus paid in by the Recon- struction Finance Corporation; (4) the function of issuing notes or other obligations to the Secretary of the Treasury, which may be pur- chased by the Secretary, under section 7 of the Recon- struction Finance Corporation Act, as amended [15 U.S.C. 606], in an amount not in excess of that nec- essary to finance at any one time the outstanding bal- ances of the investments, loans, and purchases held by the Federal National Mortgage Association, taking into consideration other balance-sheet items; (5) except as otherwise provided in this reorganiza- tion plan, all other functions of the Reconstruction Fi- nance Corporation (including functions of the Board of Directors of such Corporation and functions of the Chairman of the Board of Directors of such Corpora- tion) with respect to the Federal National Mortgage Association; and (6) all functions of the Federal Housing Commissioner with respect to the Federal National Mortgage Associa- tion. SEC. 3. BOARD OF DIRECTORS AND OFFICERS Functions with respect to serving, including eligi- bility to serve, as members of the Board of Directors of the Federal National Mortgage Association and as offi- cers of such Association are hereby transferred from the members of the Board of Directors of, and from the officers and employees of, the Reconstruction Finance Corporation to the officers and employees of the Hous- ing and Home Finance Agency (including those of the constituent agencies of the Housing and Home Finance Agency.) SEC. 4. PERFORMANCE OF FUNCTIONS OF ADMINISTRATOR The Housing and Home Finance Administrator may from time to time make such provisions as he shall deem appropriate authorizing the performance by any other officer, or by any agency or employee, of the Housing and Home Finance Agency of any function transferred to such Administrator by the provisions of this reorganization plan. SEC. 5. TRANSFER OF RECORDS, PROPERTY, PERSONNEL, AND FUNDS There are hereby transferred with the functions transferred by this reorganization plan, respectively, all of the assets, liabilities, contracts, property, records, and unexpended balances of authorizations, al- locations and other funds, available or to be made available, of the Federal National Mortgage Associa- tion, and so much of the assets, liabilities, contracts, property, records, personnel, and unexpended balances of authorizations, allocations, and other funds, avail- able or to be made available, of the Reconstruction Fi- nance Corporation and relating to functions transferred by the provisions of this reorganization plan, as the Di- rector of the Bureau of the Budget shall determine to be necessary for the administration of such functions, excluding, however, (1) the members of the Board of Di- rectors of the Federal National Mortgage Association in office immediately prior to the taking effect of the provisions of this reorganization plan, and (2) the offi- cers of the Association then in office. Such further measures and dispositions as the Director of the Bu- reau of the Budget shall determine to be necessary in order to effectuate the transfers provided for in this section shall be carried out in such manner as the Di- rector shall direct and by such agencies as he shall des- ignate. SEC. 6. EFFECTIVE DATE The provisions of this reorganization plan shall take effect 60 days after they would take effect under sec- tion 6(a) of the Reorganization Act of 1949 in the ab- sence of this section [Eff. date July 9, 1950, in operation Sept. 7, 1950]. [Housing and Home Finance Agency lapsed and func- tions were transferred to Secretary of Housing and Urban Development, see section 9(c) of Pub. L. 89–174, Sept. 9, 1965, 79 Stat. 670, set out as a note under 42 U.S.C. 3531.] ADMISSION OF ALASKA AND HAWAII TO STATEHOOD Alaska was admitted into the Union on Jan. 3, 1959, on issuance of Proc. No. 3269, Jan. 3, 1959, 24 F.R. 81, 73 Stat. c16, and Hawaii was admitted into the Union on Aug. 21, 1959, on issuance of Proc. No. 3309, Aug. 21, 1959, 24 F.R. 6868, 73 Stat. c74. For Alaska Statehood Law, see Pub. L. 85–508, July 7, 1958, 72 Stat. 339, set out as a note preceding section 21 of Title 48, Territories and Insular Possessions. For Hawaii Statehood Law, see Pub. L. 86–3, Mar. 18, 1959, 73 Stat. 4, set out as a note preceding section 491 of Title 48. § 1717a. Prohibition against sale of obligations by Federal departments and agencies after June 30, 1966, without compliance with require- ments of section 1717(c) of this title or with- out approval by Secretary of the Treasury; exemption After June 30, 1966, no department or agency listed in section 1717(c)(2) of this title may sell any obligation held by it except as provided in section 1717(c) of this title, or as approved by the Secretary of the Treasury, except that this prohibition shall not apply to the Government National Mortgage Association. (Pub. L. 89–429, § 6(b), May 24, 1966, 80 Stat. 167; Pub. L. 90–448, title VIII, § 807(g), Aug. 1, 1968, 82 Stat. 545.) Page 758 TITLE 12—BANKS AND BANKING § 1718 Editorial Notes CODIFICATION Section was enacted as a part of the Participation Sales Act of 1966, and not as a part of the National Housing Act, which comprises this chapter or the Fed- eral National Mortgage Association Charter Act which comprises this subchapter. AMENDMENTS 1968—Pub. L. 90–448 substituted ‘‘the Government Na- tional Mortgage Association’’ for ‘‘secondary market operations carried on by the Federal National Mort- gage Association’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1968 AMENDMENT For effective date of amendment by Pub. L. 90–448, see section 808 of Pub. L. 90–448, set out as an Effective Date note under section 1716b of this title. § 1718. Capitalization of Federal National Mort- gage Association (a) Common stock; preferred stock; transfer- ability of shares The corporation shall have common stock, without par value, which shall be vested with all voting rights, each share being entitled to one vote with rights of cumulative voting at all elections of directors. The corporation may eliminate such rights of cumulative voting by a resolution adopted by its board of directors and approved by the holders of a majority of the shares of common stock voting in person or by proxy at the annual meeting, or other special meeting, at which such resolution is considered. The corporation may have preferred stock on such terms and conditions as the board of direc- tors shall prescribe. The free transferability of the stock at all times to any person, firm, cor- poration, or other entity shall not be restricted except that, as to the corporation, it shall be transferable only on the books of the corpora- tion. The corporation may issue shares of com- mon stock in return for appropriate payments into capital or capital and surplus. (b) Fees and charges; annual transfer of earnings to general surplus account (1) The corporation may impose charges or fees, which may be regarded as elements of pric- ing, with the objective that all costs and ex- penses of the operations of the corporation should be within its income derived from such operations and that such operations should be fully self-supporting. (2) All earnings from the operations of the cor- poration shall annually be transferred to the general surplus account of the corporation. At any time, funds of the general surplus account may, in the discretion of the board of directors, be transferred to reserves. (c) Capital distributions from general surplus ac- count; minimum capitalization levels (1) Except as provided in paragraph (2), the corporation may make such capital distribu- tions (as such term is defined in section 4502 of this title) as may be declared by the board of di- rectors. All capital distributions shall be charged against the general surplus account of the corporation. (2) The corporation may not make any capital distribution that would decrease the total cap- ital of the corporation (as such term is defined in section 4502 of this title) to an amount less than the risk-based capital level for the corpora- tion established under section 4611 of this title or that would decrease the core capital of the corporation (as such term is defined in section 4502 of this title) to an amount less than the minimum capital level for the corporation es- tablished under section 4612 of this title, with- out prior written approval of the distribution by the Director of the Federal Housing Finance Agency. (d) Institutions eligible to purchase stock Notwithstanding any other provision of law, any institution, including a national bank or State member bank of the Federal Reserve Sys- tem or any member of the Federal Deposit In- surance Corporation, trust company, or other banking organization, organized under any law of the United States, including the laws relating to the District of Columbia, shall be authorized to purchase shares of common stock of the cor- poration and to hold or dispose of such stock, subject to the provisions of this subchapter. (June 27, 1934, ch. 847, title III, § 303, 48 Stat. 1254; Feb. 3, 1938, ch. 13, § 7, 52 Stat. 24; July 1, 1948, ch. 784, § 1, 62 Stat. 1206; Aug. 2, 1954, ch. 649, title II, § 201, 68 Stat. 613; Aug. 7, 1956, ch. 1029, title II, § 202, 70 Stat. 1096; Pub. L. 85–10, § 1(a), (b), Mar. 27, 1957, 71 Stat. 7; Pub. L. 85–104, title II, §§ 201, 202, July 12, 1957, 71 Stat. 298; Pub. L. 87–70, title VI, § 603(b), (c), June 30, 1961, 75 Stat. 176; Pub. L. 89–117, title X, § 1004(b), Aug. 10, 1965, 79 Stat. 501; Pub. L. 89–566, § 2, Sept. 10, 1966, 80 Stat. 738; Pub. L. 90–19, § 1(j)(2), (l), May 25, 1967, 81 Stat. 18; Pub. L. 90–448, title VIII, § 802 (i)–(n), (s), Aug. 1, 1968, 82 Stat. 537, 538; Pub. L. 91–609, title IX, § 902, Dec. 31, 1970, 84 Stat. 1808; Pub. L. 93–383, title VIII, § 806(g)–(i), Aug. 22, 1974, 88 Stat. 727, 728; Pub. L. 97–320, title VII, § 707(a), Oct. 15, 1982, 96 Stat. 1540; Pub. L. 100–242, title IV, § 442, Feb. 5, 1988, 101 Stat. 1921; Pub. L. 102–550, title XIII, § 1381(d), Oct. 28, 1992, 106 Stat. 3995; Pub. L. 110–289, div. A, title I, § 1161(b)(1), July 30, 2008, 122 Stat. 2779.) Editorial Notes AMENDMENTS 2008—Subsec. (c)(2). Pub. L. 110–289 substituted ‘‘Di- rector of the Federal Housing Finance Agency’’ for ‘‘Di- rector of the Office of Federal Housing Enterprise Over- sight of the Department of Housing and Urban Develop- ment’’. 1992—Subsec. (a). Pub. L. 102–550, § 1381(d)(1), inserted at end ‘‘The corporation may issue shares of common stock in return for appropriate payments into capital or capital and surplus.’’ Subsecs. (b), (c). Pub. L. 102–550, § 1381(d)(2), added subsecs. (b) and (c) and struck out former subsec. (b) which related to accumulation of surplus, fees and charges, and transfer of surplus funds to reserves and former subsec. (c) which related to issuance of common stock for capital contributions and payment of divi- dends. Subsecs. (d), (f). Pub. L. 102–550, § 1381(d)(3), (4), redes- ignated subsec. (f) as (d), struck out ‘‘to make pay- ments to the corporation of the nonrefundable capital contributions referred to in subsection (b) of this sec- tion, to receive stock of the corporation evidencing