(a) Request to FHFA. If a Bank finds that the contributions required pursuant to Sec. 1291.2(a) of this part are contributing to the financial instability of the Bank, the Bank may apply in writing to the FHFA for a temporary suspension of such contributions.
(b) Director review. (1) In determining the financial instability of a Bank, the Director shall consider such factors as:
(1) In determining the financial instability of a Bank, the Director shall consider such factors as:
(i) Severely depressed Bank earnings;
(ii) A substantial decline in Bank membership capital; and
(iii) A substantial reduction in Bank advances outstanding.
(2) Limitations on grounds for suspension. The Director shall not suspend a Bank's annual AHP contributions if it determines that the Bank's reduction in earnings is due to:
(i) A change in the terms of advances to members that is not justified by market conditions;
(ii) Inordinate operating and administrative expenses; or
(iii) Mismanagement. [71 FR 59286, Oct. 6, 2006, as amended at 73 FR 61664, Oct. 17, 2008]