or advertisement reasonably calculated to convey the impression that he or it is such a member. Every association, partnership, firm, or corporation violating any provision of this subsection shall be guilty of a misdemeanor and shall be subject to a fine of not exceeding $1,000. Any individual violating any provision of this subsection, or any officer or director of any association or corporation or any member of any firm or partnership violating any provision of this subsection, who participates in, or knowingly acquiesces in, any such violation shall be guilty of a misdemeanor and shall be subject to a fine of not exceeding $1,000 or to imprisonment not exceeding one year, or both. Any violation of any provision of this subsection may be enjoined by the United States district court having jurisdiction, at the instance of any United States district attorney, the Federal Home Loan Bank Board, or a Federal home-loan bank, a Federal savings and loan association, or the Federal Savings and Loan Insurance Corporation.

"(e) The provisions of sections 29, 30, 32, 35, 37, 39, 112, 113, 114, 115, 116, and 117 of the Criminal Code of the United States (U. S. C., title 18, secs. 73, 74, 76, 80, 82, 83, 88, 91, and 202 to 207, inclusive), insofar as applicable, are extended to apply to Federal home-loan banks and members thereof, and to the Federal Savings and Loan Insurance Corporation and to contracts or agreements of any Federal home-loan bank and members thereof, and the Federal Savings: and Loan Insurance Corporation which, for the purposes hereof, shall be held to include advances, loans, discounts, insurance, and purchase and repurchase agreements; extensions and renewals thereof; and acceptances releases and substitutions of security therefor.

(f) Any person who willfully and knowingly makes, circulates, or transmits to another or others any statement or rumor, written, printed, or by word of mouth, which is untrue in fact and is directly or by inference derogatory to the financial condition or affects the solvency or financial standing of a Federal home-loan bank, a member of a Federal home-loan bank or the Federal Savings and Loan Insurance Corporation, or who knowingly counsels, aids, procures, or induces another to start, transmit, or circulate any such statement or rumor, is guilty of a misdemeanor, punishable by a fine of not more than $1,000 or by imprisonment of not exceeding one year, or both.

"(g) As used in this Act, the term 'examiner' means any person employed by the Board, a Federal home-loan bank, or by the Federal Savings and Loan Insurance Corporation to make examinations. No such institution, no member of a Federal home-loan bank, no institution which is insured by the Federal Savings and Loan Insurance Corporation, and no officer, director, employee, attorney, or agent thereof, shall hereafter knowingly make any loan or grant any gratuity to any examiner who examines or has authority to examine it. Any such officer, director, employee, attorney, or agent violating this provision shall be deemed guilty of a misdemeanor and shall be imprisoned not exceeding one year or fined not more than $5,000, or both, and may be fined a further sum equal to the money so loaned or gratuity given. Any examiner who shall accept a loan or gratuity from any institution examined by him, or from any officer, director, employee, attorney, or agent thereof, or who shall steal or unlawfully take, or unlawfully conceal, any money, note, draft, bond, share account, or security or any other property of value in the possession of any such institution, or from any safe-deposit box in or adjacent to the premises of such institution, shall be deemed guilty of a misdemeanor and shall, upon conviction thereof in any district court of the United States, be imprisoned for not exceeding one year or fined not more than $5.000, or both, and may be fined a further sum equal to the money so loaned, gratuity accepted, or property stolen, and shall forever thereafter be disqualified from employment by the Board, a Federal home-loan bank, or member thereof, or the Federal Savings and Loan Insurance Corporation, or any institution insured by it. No examiner shall perform any other service for compensation, while holding such office, for any institution which he has authority to examine or for any officer, director, employee, attorney, or agent thereof. No examiner, officer, director, employee, attorney, or agent of the Board, a Federal home-loan bank, or the Federal Savings and Loan Insurance Corporation shall disclose the names of borrowers or investors or the collateral for loans of, or other facts confidential to the management and not otherwise publicly disclosed regarding any institution examined by him to any person other than the Board, a Federal home-loan bank, or the Federal Savings and Loan Insurance Corporation, their officers and employees, or to the proper officers of such institution, without first having obtained express permission in writing from his respective employer, or from the boards of directors of the institutions examined, except when ordered to do so by a court of competent jurisdiction or by direction of the Congress of the United States, or of either House

thereof, or any committee of Congress, or of either House duly authorized. Any person violating any of the provisions of the last two sentences shall be imprisoned not more than one year or fined not more than $5,000, or both."

SEC. 7. (a) The ninth sentence of subsection (c) of section 4 of Home Owner's Loan Act of 1933, as amended, is hereby amended by striking the period at the end thereof and adding a colon and the following: "Provided, That any building now or hereafter owned by the Corporation in the District of Columbia and used principally as an office building of the Corporation, together with the land upon which the same stands, and all appurtenances, buildings, and land used principally in connection therewith, shall be exempt from any and all taxation heretofore or hereafter imposed.'

SEC. 8. Subsection (c) of section 5 of Home Owners' Loan Act of 1933, as amended, is amended to read as follows:

"(c) Such associations shall lend their funds only on the security of their shares or on the security of first liens upon homes or combination home and business properties, as defined by regulations of the Board, within fifty miles of their home office: Provided, however, That no such loan shall exceed $20,000 or be made upon a property upon which there is located a structure or structures designed for residential use for more than four families in the aggregate, irrespective of whether such structure or structures have a party wall or are otherwise physically connected with another structure or structures. However, not exceeding 15 per centum of the assets of any association may be loaned on any improved real estate, which by reason of its condition is not only marketable but is capable of producing income reasonably in relation to the payment of interest upon and the amortization of the loan secured thereby, and all other loan charges, without regard to said limitation on amount of loan, and without regard to said fifty-mile limit but secured by a first lien thereon. Associations upon application to and authorization by the Board, because of their size and location, may lend within the fifty-mile limit and without regard to said $20,000 limitation, up to an additional 15 per centum of their assets on any improved real estate upon which there is located one or more structures designed principally for residential use, irrespective of whether such structures have a party wall or are otherwise physically connected with other structures: Provided, however, That no loan made under the provisions of this sentence shall exceed $50,000. All real estate owned as a result of the foreclosure of loans previously made within any such percentage of assets shall be included in computing such percentage of assets. Regardless of any of the foregoing limitations on the amount of loan, no loan shall be made by any such association with assets less than $500,000 in excess of 10 per centum of its share capital or $5,000, whichever is the greater. Funds of such associations not loaned on the security of their shares or on the security of mortgage, as herein before provided in this section, may be otherwise invested in obligations of, or fully guaranteed as to principal and interest by, the United States, the stock of a Federal home-loan bank, or obligations issued pursuant to the Federal Home Loan Bank Act, or the National Housing Act, or in other securities in which, and to the same extent that, building and loan, savings and loan, or homestead associations or cooperative banks, chartered or organized in accordance with the laws of the State, district, or Territory of the United States in which such Federal savings and loan association is located may invest: Provided, That the Board shall approve a list for each State, district, and Territory of such securities in which Federal savings and loan associations in such State, district, or Territory may invest, and may exclude from such list securities deemed to be ineligible. Also, upon application to and approval by the Board, an association may make loans under title I and title II of the National Housing Act as now or hereafter amended. Subject to regulations of the Board, any association which is converted from a Statechartered institution may continue to make loans in the territory in which it made loans while operating under State charter. The loans secured by improved real estate as herein authorized other than homes for not more than four families may be made up to but not to exceed 66% per centum of the appraised value of the property securing such loans: Provided, however, That associations may make loans under title I and title II of the National Housing Act as now or hereafter amended without regard to the limitation imposed by this sentence."

SEC. 9. Subsection (h) of section 5 of Home Owners' Loan Act of 1933, as amended, is amended by adding at the end thereof the following: "Any exemption from taxation by the United States now or hereafter provided applicable to Federal savings and loan associations or the shares thereof or the income therefrom shall likewise apply to any building and loan, savings and loan, homestead association and cooperative bank organized under the laws of any State, Territory, dependency, or possession of the United States or the District of Columbia,

and to the shares, deposits, and certificates of indebtedness issued by such associations and to the income derived therefrom."

SEC. 10. Subsection (i) of section 5 of Home Owners' Loan Act of 1933, as amended, is amended by striking out the period at the end thereof and inserting a colon and the following: "Provided, however, That said conversion shall not be in contravention of the State law. Any association chartered as a Federal savings and loan association may convert itself into a thrift and home-financing institution or mutual savings bank incorporated under the laws of the State (hereinafter termed a 'State-chartered institution') in which the home office of such Federal association is located, upon the vote cast at a legal meeting called to consider such action, specified by the law of such State as required for a State-chartered institution to convert itself into a Federal association, but in no event less than 51 per centum of the votes cast at such meeting, provided legal titles are protected by such conversion or provided proper conveyances of legal titles are made: And provided further, That if any shares of such Federal association are held by the Secretary of the Treasury or the Home Owners' Loan Corporation, such conversion shall be subject to approval by the Board."

SEC. 11. Subsection (c) of section 401 of the National Housing Act, as amended, is amended to read as follows:

"(c) The term 'insured account' means—

"(1) any investment in, or similar interest in or claim against, an insured institution, (a) in the form of a share, share account, or account, or (b) in any other similar form, or

"(2) any other investment or interest in, or claim against, an insured institution which is defined by rules and regulations of the board of trustees to be within the term 'insured account';

which investment, interest, or claim may be withdrawn by the holder or repurchased by the insured institution in whole or in part and the value thereof paid to the holder prior to the liquidation and payment of all of the liabilities of the institution upon the winding up of the institution, less any part thereof which is in excess of $5,000. The total insurance which any insured member may obtain in any one insured institution is $5,000, whether the insured member has one or more withdrawable or repurchasable accounts in such insured institution; and if such accounts are of a different priority, the Corporation shall have the right to determine upon the payment of insurance which of such accounts shall have the benefit of the $5,000 aggregate amount of insurance. Investments or interests in an insured institution which cannot be withdrawn or the value thereof paid to the holder until all of the liabilities of the institution have been fully liquidated and paid upon the winding up of the institution are not insurable, being nonwithdrawable accounts. The total amount of all accounts of the insured members of an insured institution is the total amount of withdrawable or repurchasable accounts credited or apportioned to all insured members, whether or not such withdrawal or repurchasable accounts are subject to a pledge and whether insured in full or only in part."

SEC. 12. (a) The last sentence of subsection (b) of section 402 of the National Housing Act is repealed, and the following inserted in lieu thereof: "The Corporation shall issue to the Home Owners' Loan Corporation receipts for payment for or on account of such stock, which shall serve as evidence of the ownership thereof, and when the reserve fund of the Corporation established under the provisions of section 404 of this title equals 5 per centum of all insured accounts and creditor obligations of all insured institutions, such stock shall be entitled to the payment of dividends out of net earnings at a rate equivalent to that currently paid by the Government on its last-issued bonds having a maturity of ten years or more. Such dividends shall not be cumulative. Dividends heretofore accumulated but unpaid are hereby waived."

(b) The second sentence of subsection (g) of section 402 of the National Housing Act, as amended, is hereby amended by striking the word "member" in the phrase "insured member" and inserting in lieu thereof the word "institution" SEC. 13. (a) Subsections (a) and (b) of section 404 of the National Housing Act, as amended, are amended by striking the word "one-eighth" wherever it appears therein and inserting in lieu thereof the word "one-twelfth".

(b) Subsection (c) of section 404 of the National Housing Act, as amended, is amended to read as follows:

"(c) The one-twelfth of 1 percentum per annum insurance premium rate shall be effective as of July 1, 1940. If an insured institution has paid a premium at a higher rate for any period of time beyond such date it shall receive a credit upon its future premiums in an amount equal to the excess premium so paid for the period beyond such date."

SEC. 14. Subsection (b) of section 405 of the National Housing Act, as amended, is amended to read as follows:

"(b) In the event of a default by an insured institution, the Corporation shall promptly determine the insured members thereof and the amount of each insured account, and shall make payment of the insured accounts in such insured institution to each insured member as soon as possible upon surrender and transfer to the Corporation of each insured account free and clear of any alien or other encumbrance either (1) by making available to each insured member a transferred insured account in an insured institution not in default in an amount equal to the insured account so transferred, or (2) in such other manner as the board of trustees may prescribe: Provided, That the Corporation may require proof of the ownership of insured accounts, and that in any case where the corporation is not satisfied as to the ownership of any insured account, it may require the final determination of a court of competent jurisdiction before paying such insured account." SEC. 15. Subsection (f) of section 406 of the National Housing Act, as amended, is amended to read as follows:

"(f) In order to prevent a default in an insured institution, restore an insured institution in default to normal operation as an insured institution, or minimize loss which the Corporation might otherwise suffer by reason of the liquidation of an insured institution in default, the Corporation is authorized, in its discretion, to make loans to, purchase the assets of, or make contributions to, any such institution."

SEC. 16. Section 407 of the National Housing Act, as amended, is amended to read as follows:

"SEC. 407. (a) Any insured institution other than & Federal savings and loan association may vote to terminate the insurance contract by a majority vote of all of the members of its board of directors or other similar governing body, unless under State law, the charter, constitution, or bylaws of any such institution, the shareholders only are entitled to vote on such question: Provided, That where such vote is reserved to the shareholders by State law, the charter, constitution, or bylaws, they shall have the sole power to vote to terminate the insurance contract. Upon a legal vote for the termination of the insurance contract, a notice of termination of such contract shall be sent to the Corporation at its office in Washington, District of Columbia, by registered mail, together with evidence satisfactory to the Corporation that the procedure required by this section has been duly complied with. The contract of insurance shall terminate at the close of business on the ninetieth day after the date of the registration of such notice of termination: Provided, however, That final termination of all insurance of accounts shall take effect as provided in subsection (d) of this section.

"(b) For any violation by an insured institution of any provision of this title, any rule or regulation made thereunder, or any agreement made pursuant to section 403, or otherwise, the Corporation, after allowing such insured_institution an opportunity to be heard, may give such institution by registered mail a notice of termination of the insurance contract. The contract of insurance shall terminate at the close of business on the ninetieth day after the date of the registration of such notice of termination: Provided, however, Thet final termination of all insurance of accounts shall take effect as provided in subsection (d) of this section.

"(c) In the event such institution votes to terminate the insurance contract, written notice of such termination shall be given within ten days to each insured member at the last address shown on the books of the institution. In the event the Corporation shall exercise its power to terminate the insurance contract of any insured institution at any time, such institution shall, within ten days after receipt of the notice of termination provided in subsection (b) of this section, give written notice to each insured member as above provided of the fact of such termination of the insurance contract. In all cases, a copy of the notice sent to insured members in reference to the termination of the insurance contract of any institution shall be furnished to the Corporation, together with evidence that such notice was given as herein provided. In the event that, in the judgment of the Corporation, such notices given by an insured institution do not give adequate notice, the Corporation shall have the right, for the protection of insured members and the public, to give such additional notice as it deems to be appropriate.

"(d) In the event of termination of the insurance contract of any insured institution under the provisions of this section, no shares, certificates of deposit, investment certificates, or other accounts issued or created by such institution after the ninetieth day after the registration of such notice of termination of the insurance contract shall be insured; but the insured accounts of such institution, to the

extent that they were insured on the ninetieth day after the registration of such notice of termination, less any amounts thereafter withdrawn or repurchased, shall remain insured for a period of two years after such date, which date shall be the effective date of the termination of insurance for all purposes. No payments on account of such insured accounts and no additions thereto by way of the credit of dividends or otherwise made or accrued after the ninetieth day after the registration of such notice of termination shall be insured. Such institution shall be obligated to pay within thirty days after the effective date of the termination of the insurance contract, as a final insurance premium twice the annual rate of premium last paid by such institution applied upon all accounts of the insured members of such institution plus all creditor obligations of such institution on the ninetieth day after the registration of such notice of termination of insurance, as shown by a sworn statement of financial condition accompanying such payment of the final insurance premium. If such institution fails to furnish such sworn statement, the Corporation may assess and collect a final insurance premium as above provided calculated upon the accounts of insured members and creditor obligations shown upon the latest statement of financial condition submitted to the Corporation, or at its option the Corporation may by court process compel the production of the sworn statement of financial condition hereinabove required to accompany the payment of the final insurance premium.

"(e) No institution which has voted to terminate the insurance contract under the provisions of subsection (a) of this section or which has been notified by the Corporation in accordance with the provisions of subsection (b) of this section that its contract of insurance is terminated, shall thereafter advertise or represent by any means that it is an insured institution, nor shall it advertise or represent by any means that any new account created after such termination of the insurance contract or any sum thereafter received by such institution on any account or credited thereto by way of dividends or otherwise, are insured. After the effective date of the termination of insurance as provided in subsection (d) of this section, no such institution shall advertise or represent in any manner that any of its accounts or any part of the same are insured under this title. The Corporation is authorized to make reasonable rules and regulations with respect to the procedure herein prescribed governing the termination of insurance.'

SEC. 17. Notwithstanding any other evidences of the intention of Congress, it is hereby declared to be the controlling intent of Congress that if any provision of this Act, or the application thereof to any person or circumstances, is held invalid, the remainder of this Act, or the application of such provision to persons or circumstances other than those as to which it is held invalid, shall not be affected thereby.

[H. R. 6971, 76th Cong., 3d sess.]

AN ACT To amend the Federal Home Loan Bank Act, Home Owners' Loan Act of 1933, title IV of the National Housing Act, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 11 of the Federal Home Loan Bank Act, as amended, is further amended by the addition of a new subsection as follows:

"(i) The Secretary of the Treasury, in his discretion, is authorized to purchase any obligations issued under the provisions of this Act or Title IV of the National Housing Act, and for such purpose the Secretary of the Treasury is authorized to use as a public-debt transaction the proceeds of the sale of any securities hereafter issued under the Second Liberty Bond Act, as amended, and the purposes for which securities may be issued under the Second Liberty Bond Act, as amended, are extended to include such purchases. The Secretary of the Treasury may, at any time, sell any of the obligations acquired by him under this subsection. All redemptions, purchases, and sales by the Secretary of the Treasury of such obligations shall be treated as public-debt transactions of the United States. The Secretary of the Treasury shall not at any time purchase under this subsection any obligations issued under the provisions of this Act if such purchase would increase the aggregate principal amount of his then outstanding holdings of such obligations under this subsection to an amount greater than three times the aggregate amount of the then outstanding capital stock, reserves, and surplus of the Federal Home Loan Banks. Likewise, the Secretary of the Treasury shall not at any time purchase under this subsection any obligations issued under Title IV of the National Housing Act if such purchase would increase the aggregate principal amount of his then outstanding holdings of such latter obligations under this

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