§ 933.29 - Orderly liquidation of advances and redemption of stock.

(a)(1) If an institution ceases to be a member of a Bank pursuant to §§ 933.26, 933.27 or 933.28 of this part, the institution, or its receiver under § 933.28 of this part, may continue to hold the stock of the Bank of which such institution is no longer a member so long as the Bank requires that the stock be held as collateral for any outstanding indebtedness owed to the Bank. If an institution ceases to be a member of a Bank pursuant to §§ 933.24(b) or 933.25(d)(3) of this part, the consolidated institution may continue to hold the stock of the disappearing institution's Bank so long as such Bank requires that the stock be held as collateral for any outstanding indebtedness owed to the Bank.

(2) The indebtedness of the institution that has ceased to be a member of a Bank owed to such Bank shall be liquidated in an orderly manner as determined by the Bank in accordance with § 935.19 of this chapter, and upon completion of such liquidation, such institution's remaining stock in the Bank shall be surrendered and canceled.

(b) If an institution that has ceased to be a member of a Bank has no outstanding indebtedness owed to the Bank, such institution's stock in the Bank shall be surrendered and canceled.

(c) An institution that has ceased to be a member shall receive for stock redeemed under paragraphs (a)(2) or (b) of this section a sum equal to the original amount paid for the stock redeemed, except that if at any time the Board finds that the paid-in capital of the Bank is or is likely to be impaired as a result of losses in or depreciation of the assets held by the Bank, the Bank shall on the order of the Board withhold from the amount to be paid in retirement of the stock a pro rata share of the amount of such impairment as determined by the Board.