Sec. 6. Standby letters of credit
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The Federal Home Loan Bank Act ( 12 U.S.C. 1421 et seq. ) is amended— in section 2 ( 12 U.S.C. 1422 ), as amended by section 5 of this Act, is amended by adding at the end the following: The term employee- or community-owned company means— an organization described in section 1381 of the Internal Revenue Code of 1986; an eligible worker-owned cooperative, as defined in section 1042(c)(2) of the Internal Revenue Code of 1986; and an employee stock ownership plan, as defined in section 4975(e)(7) of the Internal Revenue Code of 1986, which meets the requirements of section 409 of such Code. ; and in section 11 ( 12 U.S.C. 1431 ), by adding at the end the following:
Each Federal Home Loan Bank is authorized to issue and confirm standby letters of credit, secured by collateral eligible to secure advances, to support any activity permitted under law or regulation applicable to the member or non-member mortgagee eligible to receive advances under section 10b, subject to safety and soundness oversight, including the purposes described in paragraph (2). Each Bank is authorized to issue or confirm on behalf of members or non-member mortgagees standby letters of credit that comply with the requirements of this subsection for any of the following purposes:
To assist members or non-member mortgagees in facilitating residential housing finance. To assist members or non-member mortgagees in facilitating community lending. To assist members or non-member mortgagees with asset or liability management. To provide members or non-member mortgagees with liquidity or other funding. To assist members in facilitating business retention or facilitating business transition to employee- or community-owned companies or assisting those companies. .
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