HB370 Alabama 2016 Session

Summary

Primary Sponsor

Artis McCampbellRepresentative

Democrat

Session

Regular Session 2016

Title

Banks and Banking, delinquency procedure regarding federal home loan banks, Sec. 5-8A-24.1 added

Summary

HB370 creates special rules for federal home loan banks and their insurer members in delinquency cases, focusing on collateral, stock, and the receiver's authority.

What This Bill Does

It restricts a receiver from voiding certain ordinary-course transfers or stock redemptions involving federal home loan bank securities, unless there is intent to defraud. It allows the federal home loan bank to repurchase excess stock held by an insurer member when rights to collateral are exercised, within legal and capital-plan limits. It requires the federal home loan bank to establish a process and timelines for collateral releases, handling of collateral remaining after repayment, payment of fees, and possible stock redemption. It also requires the bank to offer options to renew or restructure advances to defer prepayment fees, subject to market conditions and bank policies, and applies these rules regardless of other laws.

Who It Affects

• Insurer members of federal home loan banks: their collateral arrangements, stock ownership, and access to bank processes and options during delinquency are affected, with protections and new rights specified.
• Federal Home Loan Banks and receivers: gain defined authority and duties to manage collateral and stock, provide release timelines, respond to requests, and offer loan-renewal options during delinquency.

Key Provisions

• Adds §5-8A-24.1 defining Federal Home Loan Bank (FHLB) and Insurer Member for the article.
• Receiver may not void ordinary-course transfers or stock redemptions related to FHLB security agreements, except transfers intended to hinder or defraud.
• FHLB may repurchase excess capital stock of an insurer member when collateral rights are exercised, subject to applicable laws, regulations, and the bank's capital plan.
• Upon receiver request, FHLB must establish a process and timelines for collateral release, collateral remaining after repayment, payment of fees, and stock redemption options.
• FHLB must offer options to renew or restructure outstanding advances to defer prepayment fees, based on market conditions and bank policies.
• Section clarifies that receiver rights under other regulations are not affected (12 CFR 1266.4 references).
• After seven days into delinquency, FHLB may not be stayed from exercising collateral rights.
• Provisions apply notwithstanding other Alabama law.
• Effective date set as the first day of the third month after passage and governor approval.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Banks and Banking