TITLE 24-HOUSING CREDIT

CHAPTER I-FEDERAL HOME LOAN BANK BOARD

PART 2-ORGANIZATION OF THE or director of a member of the Bank,

BANKS

§ 2.4 Directors-(a) Appointment and election. Four directors of each Bank

will be appointed by the Board and eight directors of each Bank will be elected in accordance with the following provisions: (1) As provided in section 7 of the Act (47 Stat. 730, 49 Stat. 294; 12 U.S.C. and Sup., 1427), 8 of the 12 directors of each Bank shall be elected by the members thereof, provided such members hold at least $1,000,000 of the capital stock of the Bank at the time nominations are required. Members shall be deemed to hold $1,000,000 of the capital stock of a Bank when they have subscribed to a total of $1,000,000 par value of such stock, made the statutory payments thereon, such subscriptions have been accepted and the subscribers have been notified.

(2) Two of such directors shall be known as Class A directors, two as Class B and two as Class C, and shall hold office for terms of 2 years. Each of these directors shall be a citizen of the United States, a bona fide resident of the district in which the Bank is located; shall be an officer or director of a member of the Bank in the group electing him and shall be deemed to be from the State in which such member is located.

shall be deemed to be from the State in which he has established a bona fide residence.

(4) The election of directors shall be

held annually and shall be conducted by mail under the supervision of the Board. No nominations shall be accepted from members which were admitted to membership within the 10 days prior to the date nomination ballots are to be forwarded to members as set forth herein and no votes for the election of candidates shall be accepted from members which have been admitted to membership within the 10 days prior to the date election ballots are to be forwarded to members as set forth herein.

(5) The Board will adjust the lines of class demarcation of members every 4 years or more often if it deems such action desirable. Before September 1 of each year, the Board will divide the member institutions into groups A, B, and C on the basis of the size of the members as determined from the aggregate unpaid principal of each member's home mortgage loans appearing on the most recent financial statement of members in the possession of the Board on the July 15 immediately preceding said September 1. The Board will then notify each member not later than September 1 of each year of its right to nominate (3) Two of the eight directors to be and of its classification and will furelected shall be elected by the member- nish each member with a list of the ship-at-large without regard to classes; members in its class and a list of those shall be known as directors-at-large; holding directorships at that time in the and shall hold office for terms of 2 Bank of which it is a member, containing years. Each of these directors shall be the name of each director, the date of a citizen of the United States and a expiration of the term of each director, bona fide resident of the Bank district. the name and address of the member Each of these directors who is an officer institution of which each class director or director of a member of the Bank is an officer or director, the city and shall be deemed to be from the State in State of which each director-at-large is which such member is located. Each a resident, the name and address of the of these directors who is not an officer institution with which each director-at

large is affiliated and his title, or, if not | October 15th, an expression of preferaffiliated with an institution, his present ence in order to have his name placed or former occupation and indicating each on an election ballot. In each such case class directorship and each directorship- where the Board has received from a at-large. At the same time each mem-nominee an expression of preference ber will be furnished with the necessary within the time referred to and the other nominating ballots and will be notified of each directorship to be filled from the membership-at-large and of each directorship to be filled in its class. Each Bank will be furnished with copies of all such information and ballots forwarded to its members.

authorize one of its directors and one | having a majority of all votes cast in the of its officers to cast its vote for each column of first choice will be declared directorship to be filled in its class and elected. If no candidate has a majority for each directorship-at-large to be filled of all votes in the first column, then there by votes from the membership-at-large. will be added together for each candidate Each ballot cast must show clearly the receiving a vote in the first column, his member's first, second and third choices votes both in the first and second columns. The candidate then having a majority of of candidates, where the number of canthe members voting and the highest number of combined votes will be declared elected. If no candidate has a majority of the members voting and the highest number of combined votes, when the first and second choices shall have been added, then all votes cast in the first, second and third columns for each candidate will be added together and the candidate then having the highest number of votes will be declared elected. No candidate will be declared elected by the foregoing procedure if the required minimum representation per State will be impaired thereby. If the required minimum representation per State will not be

didates is more than three, otherwise the ballot will be void. If there are three candidates for a directorship the member's first and second choices must be clearly shown on the ballot therefor, otherwise the ballot will be void. If there are only two candidates for a directorship the member's choice must be clearly shown on the ballot therefor, otherwise the ballot will be void. The ballots shall be properly marked and the certification properly executed, and both mailed to the Secretary to the Board so as to arrive in Washington not later than November 30th.

(9) In determining the results of bal-maintained on the new board of directors, loting by the members, the Board will see that each State is represented on the new board of directors by at least the number of elective directors set forth be

low, provided there has been an eligible nominee from such State who has been voted for:

Minimum number of
directors per State

1

3

the Board will designate for each State which apparently would otherwise be inadequately represented the directorship didate from such State, provided there or directorships to be filled only by a canhas been a properly qualified nominee from each of such States who has been voted for as a first choice for the directorship so designated.

In making each such designation the iBoard will first ascertain the director2 ships for which a candidate from the State which apparently would otherwise be inadequately represented has been 1 voted for as a first choice and which can be reserved for such State without impairing the necessary representation of any other State more entitled to representation. From the directorships thus ascertained to be available for designation, the Board will designate for each State which apparently would otherwise be inadequately represented the directorship for which a candidate from such State has received more first choice votes than any other candidate for such directorship. If no candidate from such State has received such a plurality and the leading candidates for all of the available directorships are, therefore, from other States, the Board will, from the available directorships, designate the directorship for which the leading candi

Within a period of 2 years after the expiration of the term of a directorship held by an officer or director of a member institution, through the application of the rule as to the minimum number of directors per State, no officer or director of such institution may hold a directorship in a Bank unless the votes he receives are sufficient to elect him without applying the rule as to representation per State.

(10) Before December 15 the Board will determine the results of the election ballots. In the case of each directorship subject to the election, any candidate

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date has a lesser percentage of votes | lot results in a tie after the foregoing than any of the leading candidates for procedure has been followed, the Board other available directorships, such per- will determine which of the leading cancentage to be determined in accordance didates shall be declared elected. The with the procedure set forth at the be- Board will also determine any other matginning of this subparagraph. This pro- ters concerning elections which are not cedure will eliminate from further con- provided for in the rules and regulations sideration all candidates from other in this part. States for such directorship reserving it (12) All nominating ballots sent to for candidates from the State which ap-members in the States shall be forwarded parently would otherwise be inadequately by regular mail. All election ballots shall represented. be forwarded to the members by registered mail and a return receipt requested. Election material sent to members in Puerto Rico, the Virgin Islands, Alaska and Hawaii shall be forwarded by airmail.

Upon the request of a candidate he will be informed of the number of election ballots cast for him and the total number of election ballots cast for the directorship for which he was a candidate, but with this exception no information concerning the number of votes received by candidates will be published. All ballots and envelopes of certification shall be preserved by the Secretary to the Board until the end of the ensuing calendar year and shall be subject to inspection only by a member of the Board.

If after designating a directorship to be filled from a State which apparently would otherwise be inadequately represented, the Board finds that only one candidate from such State has received a first choice vote or votes for such di(13) No election ballots will be opened rectorship, such candidate will be de- until after the close of the polls. No clared elected. Otherwise, the candidate | ballots will be considered except ballots from such State receiving the largest executed on forms supplied by the Board. number of votes cast in the first column for candidates from such State shall be declared elected; however, in case of a tie the votes cast in the first and second columns for each candidate from such State shall be added together and the candidate from such State then having a majority of the members voting for candidates from such State and the highest number of combined votes for candidates from such State shall be declared elected, but if no candidate from such State has a majority of the members voting for candidates from such State, and the highest number of combined votes for candidates from such State, when the first and second choices shall have been added, then the votes cast in the first, second and third columns for each candidate from such State shall be added together and the candidate then having the highest number of votes for candidates from such State shall be declared elected.

Upon determining the results of the election ballots, the Board will declare elected the candidates who should be declared elected in accordance with the provisions of the rules and regulations in this part. The Board will thereupon spread said results upon its minutes and notify the directors elected of their election. The Board will also inform each Bank and each member thereof of the directors elected.

(11) In the event the voting for those whose names appear on an election bal

(14) To be eligible for election as a director of a Bank, a candidate may not hold an active political office for which he receives compensation.

(15) Neither the Board nor any of its members will endeavor to influence any member of a Bank in the casting of its vote for or against any individual who is a candidate for a directorship in a Bank. Neither an officer, attorney, employee or agent of the Board nor a Board of Directors, Executive Committee, officer, attorney, employee or agent of a Bank shall take any action which would tend to influence votes for any candidate for a directorship in a Bank. The Board, after hearing, may consider a violation of the provisions of this subparagraph as grounds for dismissal or may declare the directorship involved as vacant, or both.

(16) In the event any date specified herein falls on a Sunday or a holiday, the next business day shall be included