Kentucky Statutes 304.33-052 – Federal home loan banks — Rights regarding collateral –Procedures
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(1) (a) A federal home loan bank shall not be stayed or otherwise prohibited by a court from exercising its rights regarding collateral pledged by an insurer- member for more than ten (10) days following the date a temporary restraining order, preliminary injunction, or permanent injunction is issued by the court pursuant to KRS § 304.33-050.
(b) A federal home loan bank exercising its rights regarding collateral pledged by an insurer-member shall, within seven (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 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.
(2) (a) Not later than ten (10) days after the date of appointment of a receiver in a proceeding under this subtitle involving an insurer-member, the federal home loan bank shall provide to the receiver a process and timeline for all of the following:
1. The release of any collateral held by the federal home loan bank that exceeds the amount that is required to support the secured obligation 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 insurer-member;
2. The release of any collateral of the insurer-member remaining in the federal home loan bank’s possession following the repayment in full of all outstanding secured obligations of the insurer-member;
3. 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 and the federal home loan bank; and
4. 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.
(b) Upon request of the receiver appointed in a proceeding under this subtitle involving an insurer-member, the federal home loan bank shall provide to the receiver 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:
1. Market conditions;
2. The terms of any loans outstanding to the insurer-member;
3. The applicable policies of the federal home loan bank; and
4. The federal laws and regulations applicable to federal home loan banks.
Effective: July 14, 2022
History: Created 2022 Ky. Acts ch. 61, sec. 2, effective July 14, 2022.
(b) A federal home loan bank exercising its rights regarding collateral pledged by an insurer-member shall, within seven (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 it determines in good faith that the repurchase is:
Terms Used In Kentucky Statutes 304.33-052
- Federal: refers to the United States. See Kentucky Statutes 446.010
- Injunction: An order of the court prohibiting (or compelling) the performance of a specific act to prevent irreparable damage or injury.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Temporary restraining order: Prohibits a person from an action that is likely to cause irreparable harm. This differs from an injunction in that it may be granted immediately, without notice to the opposing party, and without a hearing. It is intended to last only until a hearing can be held.
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.
(2) (a) Not later than ten (10) days after the date of appointment of a receiver in a proceeding under this subtitle involving an insurer-member, the federal home loan bank shall provide to the receiver a process and timeline for all of the following:
1. The release of any collateral held by the federal home loan bank that exceeds the amount that is required to support the secured obligation 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 insurer-member;
2. The release of any collateral of the insurer-member remaining in the federal home loan bank’s possession following the repayment in full of all outstanding secured obligations of the insurer-member;
3. 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 and the federal home loan bank; and
4. 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.
(b) Upon request of the receiver appointed in a proceeding under this subtitle involving an insurer-member, the federal home loan bank shall provide to the receiver 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:
1. Market conditions;
2. The terms of any loans outstanding to the insurer-member;
3. The applicable policies of the federal home loan bank; and
4. The federal laws and regulations applicable to federal home loan banks.
Effective: July 14, 2022
History: Created 2022 Ky. Acts ch. 61, sec. 2, effective July 14, 2022.