FILED ON: 7/24/2024

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 4905

The Commonwealth of Massachusetts

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In the One Hundred and Ninety-Third General Court
(2023-2024)

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An Act relative to certain loans by the Federal Home Loan Bank.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

SECTION 1. Section 19G of chapter 175 of the General Laws, as appearing in the 2022 Official Edition, is hereby amended by striking out, in line 53, the figure “180L” and inserting in place thereof the following figure:- 180L3/4. 

SECTION 2. Section 19K of said chapter 175, as so appearing, is hereby amended by striking out, in lines 137 and 160, the figure “180L” and inserting in place thereof, in each instance, the following figure:- 180L3/4.

SECTION 3. Section 180A of said chapter 175, as so appearing, is hereby amended by striking out, in lines 2 and 89, the figure “180L1/2” and inserting in place thereof, in each instance, the following figure:- 180L3/4. 

SECTION 4. Said section 180A of said chapter 175, as so appearing, is hereby further amended by inserting after the definition of “Domiciliary state” the following definition:-

“Federal Home Loan Bank”, an institution chartered under the Federal Home Loan Bank Act of 1932, 12 U.S.C. 1421, et seq.

SECTION 5. Said chapter 175 is hereby further amended by inserting after section 180 L1/2 the following section:-

Section 180L3/4. (a) Notwithstanding any provision of sections 180A to 180L3/4, inclusive, to the contrary, no person, for more than 10 days shall be stayed, enjoined or prohibited from exercising or enforcing any right or cause of action under any pledge, security, credit, collateral, loan, advances, reimbursement or guarantee agreement or arrangement or any similar agreement, arrangement or other credit enhancement to which a federal home loan bank is a party. 

(b) Notwithstanding any provision of sections 180A to 180L3/4, inclusive, to the contrary, no receiver, rehabilitator, liquidator or other person shall avoid any transfer of, or any obligation to transfer, money or any other property arising under or in connection with any pledge, security, credit, collateral, loan, advances, reimbursement or guarantee agreement or arrangement or any similar agreement, arrangement or other credit enhancement to which a federal home loan bank, is a party, that is made, incurred or assumed before or after the commencement of a delinquency proceeding under this chapter; provided, however, that a transfer may be avoided under chapter 109A if the transfer was made with actual intent to hinder, delay or defraud the insurer, a receiver appointed for the insurer or existing or future creditors.

(c) A federal home loan bank exercising its rights regarding collateral pledged by an insurer-member shall, within 7 days of receiving a redemption request made by the insurer-member, repurchase any of the insurer-member’s outstanding capital stock in excess of the amount the insurer-member must hold as a minimum investment. The federal home loan bank shall repurchase the excess outstanding capital stock only to the extent that it determines in good faith that the repurchase is:

(1) permissible under federal laws and regulations and the federal home loan bank’s capital plan; and

(2) consistent with the capital stock practices currently applicable to the federal home loan bank’s entire membership.

(d) (1) Not later than 10 days after the date of appointment of a receiver, rehabilitator, or liquidator in a proceeding under section 180A to 180L3/4 involving an insurer-member of a federal home loan bank, the federal home loan bank shall provide to the receiver, rehabilitator or liquidator a process and timeline for the following:

(i) The release of any collateral held by the federal home loan bank that exceeds the amount that is required to support the secured obligations of the insurer-member and that is remaining after any repayment of loans, as determined under the applicable agreements between the federal home loan bank and the insurer-member;

(ii) The release of any collateral of the insurer-member remaining in the federal home loan bank’s possession following repayment in full of all outstanding secured obligations of the insurer-member;

(iii) The payment of fees owed by the insurer-member and the operation, maintenance, closure or disposition of deposits and other accounts of the insurer-member, as mutually agreed upon by the receiver, rehabilitator or liquidator and the federal home loan bank;

(iv) Any redemption or repurchase of federal home loan bank stock or excess stock of any class that the insurer-member is required to own under agreements between the federal home loan bank and the insurer-member.

(2) Upon the request of a receiver, rehabilitator or liquidator appointed in a proceeding under sections 180A to 180L3/4, inclusive, involving a federal home loan bank insurer-member, the federal home loan bank shall provide to the receiver, rehabilitator or liquidator any available options for the insurer-member to renew or restructure a loan. In determining which options are available, the federal home loan bank may consider market conditions, the terms of any loans outstanding to the insurer-member, the applicable policies of the federal home loan bank and the federal laws and regulations applicable to federal home loan banks.

(e) As used in this section, "insurer-member" means a member of the federal home loan bank in question that is an insurer.

SECTION 6. Section 20 of chapter 176G of the General Laws, as appearing in the 2022 Official Edition, is hereby amended by striking out, in line 6, the figure “180L” and inserting in place thereof the following figure:- 180L3/4.