Title 12 -- Banks and Banking


-CITE-
    12 USC CHAPTER 23 - FARM CREDIT SYSTEM                       01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    .
 
-HEAD-
    CHAPTER 23 - FARM CREDIT SYSTEM
 
-MISC1-
    Sec.
    2001.           Congressional declaration of policy and objectives.
    2002.           Farm Credit System.
                        (a) Composition.
                        (b) Farm credit districts.
                      SUBCHAPTER I - FARM CREDIT BANKS
    2011.           Establishment, charters, titles, branches.
                        (a) Establishment.
                        (b) Charters.
                        (c) Title.
                        (d) Branches.
    2012.           Board of directors.
    2013.           General corporate powers.
    2014.           Farm Credit Bank capitalization.
    2015.           Lending authority.
                        (a) Real estate loans and related assistance.
                        (b) Intermediate credit.
    2016.           Interest rates and other charges.
                        (a) In general.
                        (b) Setting rates and charges.
    2017.           Eligibility.
    2018.           Security; terms.
                        (a) Real estate loans.
                        (b) Intermediate credit.
    2019.           Purposes for extensions of credit.
                        (a) Agricultural or aquatic purposes.
                        (b) Rural housing financing.
                        (c) Farm-related services.
    2020.           Related services.
                        (a) In general.
                        (b) Authority to pass along cost of insurance
                              premiums.
    2021.           Loans through associations or agents.
                        (a) In general.
                        (b) No active association.
                        (c) Purchase of stock required.
    2022.           Liens on stock.
    2023.           Taxation.
                  SUBCHAPTER II - FARM CREDIT ASSOCIATIONS
                  PART A - PRODUCTION CREDIT ASSOCIATIONS
    2071.           Organization and charters.
                        (a) Charter.
                        (b) Organization.
    2072.           Board of directors.
    2073.           General corporate powers.
    2074.           Production credit association capitalization.
                        (a) In general.
                        (b) Application of earnings.
                        (c) Patronage.
    2075.           Short- and intermediate-term loans; participation;
                      other financial assistance; terms; conditions;
                      interest; security.
                        (a) Short- and intermediate-term loans.
                        (b) Rural housing.
                        (c) Interest rates and charges.
                        (d) Special district rule.
    2076.           Other services.
    2076a.          Liens on stock.
    2077.           Taxation.
                  PART B - FEDERAL LAND BANK ASSOCIATIONS
    2091.           Organizations; articles; charters; powers of the
                      Farm Credit Administration.
                        (a) Charter.
                        (b) Organizations.
                        (c) FCA authority on organization.
    2092.           Board of directors.
    2093.           General corporate powers.
    2094.           Federal land bank association capitalization.
    2095.           Repealed.
    2096.           Agreements for sharing gains or losses.
    2097.           Liens on stock.
    2098.           Taxation.
                  SUBCHAPTER III - BANKS FOR COOPERATIVES
                      PART A - BANKS FOR COOPERATIVES
    2121.           Establishment; titles; branches.
    2122.           Corporate existence; general corporate powers.
    2123.           Board of directors.
    2124.           Stock of banks for cooperatives.
                        (a) Amount.
                        (b) Value.
                        (c) Eligible holders of voting stock.
                        (d) Entitlement to vote.
                        (e) Nonvoting investment stock.
                        (f) Participation certificates.
    2125.           Dividends.
    2126.           Retirement of stock.
    2127.           Guaranty fund subscriptions in lieu of stock.
    2128.           Loans, commitments, and technical and financial
                      assistance.
                        (a) Authorities.
                        (b) Additional authorities.
                        (c) Applicable policies.
                        (d) Regulatory limitations.
                        (e) Speculative futures transactions.
                        (f) Installation, expansion, or improvement of
                              water and waste disposal facilities.
    2129.           Eligibility.
    2130.           Ownership of stock by borrowers.
    2131.           Loans.
                        (a) Interest rates and charges.
                        (b) Security.
                        (c) Lien.
                        (d) Cancellation; application on indebtedness.
    2132.           Earnings and reserves; application of savings.
                        (a) Application of savings.
                        (b) Patronage refunds.
                        (c) Savings of Central Bank for Cooperatives.
                        (d) Loss carryover.
                        (e) Charge of unrecognized costs or expenses to
                              reserve, surplus, or patronage
                              allocations.
                        (f) Payment of patronage refunds in cash.
    2133.           Distribution of assets on liquidation or
                      dissolution.
    2134.           Taxation.
            PART B - UNITED AND NATIONAL BANKS FOR COOPERATIVES
    2141.           Charter, powers, and operation.
                        (a) Charter.
                        (b) Powers.
                        (c) Operation.
    2142.           Board of directors provisions.
                        (a) Initial board of directors.
                        (b) Permanent board of directors.
                        (c) Modification of board of directors
                              provisions.
    2143.           Credit delivery office.
    2144.           Consolidation of functions.
    2145.           Exchange of ownership interests.
    2146.           Capitalization.
    2147.           Patronage pools.
    2148.           Transactions to accomplish merger.
    2149.           Lending limits.
    2149a.          Reports by merged banks for cooperatives.
      SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
                         INSTITUTIONS OF THE SYSTEM
                              PART A - FUNDING
    2151.           Revolving fund.
    2152.           Repealed.
    2153.           Power to borrow; issuance of notes, bonds,
                      debentures, and other obligations.
    2154.           Capital adequacy of banks and institutions.
                        (a) Minimum levels of capital.
                        (b) Failure to maintain minimum levels;
                              directives; plans for achieving minimum
                              levels; proposals affecting compliance.
                        (c) Enhancement of capital adequacy of banks.
    2154a.          Capitalization of System institutions.
                        (a) Definitions.
                        (b) Adoption of bylaws.
                        (c) Requirements of bylaws.
                        (d) Reduction of capital.
                        (e) Compliance.
                        (f) Loans designated for sale or sold into
                              secondary market.
                        (g) Construction.
                        (h) Controlling authority.
    2155.           Liability of banks; United States not liable.
                        (a) Joint and several liability of banks.
                        (b) Resolutions as to liability; execution of
                              obligations.
                        (c) United States liability.
                        (d) Insurance Fund called on before invoking
                              joint and several liability.
    2156.           Repealed.
    2157.           Bonds as investments.
    2158.           Purchase and sale by Federal Reserve System.
    2159.           Purchase and sale of obligations; additional
                      powers.
    2160.           Federal Farm Credit Banks Funding Corporation.
                        (a) Establishment.
                        (b) Duties.
                        (c) Officers and committees.
                        (d) Board of directors.
                        (e) Transitional authority.
                        (f) Succession.
    2161.           Repealed.
    2162.           Protection of borrower stock.
                        (a) Retirement of stock.
                        (b) Certain powers not affected.
                        (c) Inability to retire stock at par value.
                        (d) Definitions.
                            PART B - DISSOLUTION
    2181, 2182.     Repealed.
    2183.           Dissolution; voluntary or involuntary liquidation;
                      mergers; receiverships or conservators.
                        (a) Voluntary liquidation; consent of Farm
                              Credit Administration; rules and
                              regulations; minimization of adverse
                              effect; voluntary merger; mandatory
                              merger on failure to comply or meet
                              obligations.
                        (b) Appointment of conservator or receiver;
                              grounds; action for removal; stay of
                              actions or proceedings.
                        (c) Involuntary liquidation; rules and
                              regulations; minimization of adverse
                              effect.
    2184.           Communications with stockholders.
                        (a) Provision of stockholder lists.
                        (b) Alternative communications.
              PART C - RIGHTS OF BORROWERS; LOAN RESTRUCTURING
    2199.           Disclosure.
                        (a) In general.
                        (b) Differential interest rates.
    2200.           Access to documents and information.
    2201.           Notice of action on application.
                        (a) Loan applications.
                        (b) Distressed loans.
    2202.           Reconsideration of actions.
                        (a) Credit review committees.
                        (b) Review of decisions.
                        (c) Personal appearance.
                        (d) Independent appraisal.
                        (e) Notification of applicant.
    2202a.          Restructuring distressed loans.
                        (a) Definitions.
                        (b) Notice.
                        (c) Meetings.
                        (d) Consideration of applications.
                        (e) Restructuring.
                        (f) Least cost alternative.
                        (g) Restructuring policy.
                        (h) Reports.
                        (i) Compliance.
                        (j) Permitted foreclosures.
                        (k) Application of section.
                        (l) Assistance in restructuring.
    2202b.          Effect of restructuring on borrower stock.
                        (a) Farm Credit Bank.
                        (b) Production credit association.
                        (c) Retention of stock.
    2202c.          Review of restructuring denials.
                        (a) Requirements for restructuring by System
                              institutions.
                        (b) Special asset groups.
                        (c) National Special Asset Council.
                        (d) Report.
                        (e) Restructuring factors.
    2202d.          Protection of borrowers who meet all loan
                      obligations.
                        (a) Foreclosure prohibited.
                        (b) Prohibition against required principal
                              reduction.
                        (c) Nonenforcement.
                        (d) Placing loans in nonaccrual status.
    2202e.          Waiver of mediation rights by borrowers.
             PART D - ACTIVITIES OF INSTITUTIONS OF THE SYSTEM
    2203.           Nomination of association directors; representative
                      selection of nominees.
    2204.           Repealed.
    2205.           Interest rates.
    2206.           Participation loans.
    2206a.          Authority of Farm Credit Banks and direct lender
                      associations to participate in loans to similar
                      entities for risk management purposes.
                        (a) Definitions.
                        (b) Loan participation authority.
                        (c) Prior approval required.
    2207.           Young, beginning, and small farmers and ranchers.
    2208.           Prohibition against use of signed ballots.
    2209.           Compensation of bank directors.
                        (a) In general.
                        (b) Waiver.
                       PART E - SERVICE ORGANIZATIONS
    2211.           Establishment.
    2212.           Powers of Farm Credit Administration.
    2213.           Regulation and examination.
    2214.           State laws.
    2214a.          ''Bank'' defined.
              PART D1 - FARM CREDIT SYSTEM CAPITAL CORPORATION
    2216 to 2216k.  Repealed.
                         PART F - SALE OF INSURANCE
    2218.           Lines of insurance.
                        (a) Regulatory authorization.
                        (b) Contents of regulations.
                        (c) Continuation of existing coverage.
                           PART G - MISCELLANEOUS
    2219.           Limitation on separate sale.
    2219a.          Right of first refusal.
                        (a) General rule.
                        (b) Application of right of first refusal to
                              sale of property.
                        (c) Application of right of first refusal to
                              leasing of property.
                        (d) Public offerings.
                        (e) Term or condition.
                        (f) Financing.
                        (g) Mailing of notice.
                        (h) State laws.
                        (i) Applicability.
    2219b.          Application of uninsured accounts.
                        (a) In general.
                        (b) Regulations.
    2219c.          Affirmative action.
    2219d.          Encouragement of conservation practices.
    2219e.          Liability for making criminal referrals.
                        (a) In general.
                        (b) No prohibition on disclosure.
           SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
                       PART A - DISTRICT ORGANIZATION
    2221 to 2227.   Transferred or Repealed.
              PART B - FARM CREDIT ADMINISTRATION ORGANIZATION
    2241.           Farm Credit Administration.
    2242.           Farm Credit Administration Board.
                        (a) Appointment.
                        (b) Terms of office.
                        (c) Organization.
                        (d) Compensation.
                        (e) Qualifications of Farm Credit
                              Administration Board members.
    2243.           Powers of Board.
    2244.           Chairman; responsibilities; governing standards.
                        (a) Chairman of Farm Credit Administration
                              Board; power and authority.
                        (b) Governing standards.
                        (c) Enforcement of rules, regulations, and
                              orders of Board; civil proceedings;
                              representation by attorneys.
    2245.           Organization of Farm Credit Administration.
                        (a) Policies of Board.
                        (b) Appointments.
                        (c) Personnel.
                        (d) Funding.
    2246.           Advisory committees.
    2247.           Repealed.
    2248.           Seal of the Farm Credit Administration.
    2249.           Administrative expenses.
    2250.           Farm Credit Administration operating expenses fund.
                        (a) Determinations required.
                        (b) Deposits into fund.
    2251.           Quarters and facilities for the Farm Credit
                      Administration.
    2252.           Powers and duties.
                        (a) Enumerated powers.
                        (b) Exclusions.
                        (c) Proposed and final regulations; procedures
                              applicable.
                        (d) Legislative veto of regulations; procedures
                              applicable.
    2253.           Prior delegations.
    2254.           Examinations.
                        (a) Scope and frequency of examinations; power,
                              authority, and liability of examiners.
                        (b) Annual report of condition.
                        (c) Report of examination of noncomplying
                              institution; publication; notice of
                              intention.
                        (d) Duties of Farm Credit Administration.
    2255.           Conditions of other banks and lending institutions.
    2256.           Consent to the availability of reports and to
                      examinations.
    2257.           Reports on conditions of institutions receiving
                      loans or deposits.
    2257a.          Uniform financial reporting instructions.
                        (a) In general.
                        (b) Computerized system.
                        (c) Submission of proposal.
    2258.           Jurisdiction.
    2259.           State legislation.
    2260.           Transferred.
         PART C - ENFORCEMENT POWERS OF FARM CREDIT ADMINISTRATION
    2261.           Cease and desist proceedings.
    2262.           Temporary cease and desist orders.
    2263.           Enforcement of temporary cease and desist orders.
    2264.           Suspension or removal of director or officer.
                        (a) Written notice of intention to remove;
                              violation of law, rule, regulation, or
                              final cease and desist order; unsafe or
                              unsound practice; breach of fiduciary
                              duty.
                        (b) Written notice of intention to remove or
                              suspend director, officer or other
                              person; personal dishonesty; willful or
                              continuing disregard; unfitness to
                              continue in office or to participate in
                              affairs of institution.
                        (c) Suspension from office; prohibition from
                              further participation in conduct of
                              affairs of institution; service of
                              notice.
                        (d) Statement of grounds for removal or
                              prohibition; notice and hearing; order of
                              suspension, removal or prohibition;
                              service of order.
                        (e) Stay of suspension or prohibition.
    2265.           Suspension or removal of director or officer
                      charged with felony.
    2266.           Hearings and judicial review.
                        (a) Venue; closed hearings; decisions and
                              findings of fact; orders; modification or
                              other action by Farm Credit
                              Administration; judicial review.
                        (b) Judicial review; commencement of
                              proceedings; filing of petition and
                              record; exclusive jurisdiction; finality
                              of judgment and decree.
                        (c) Proceedings operating as stays of orders.
    2267.           Jurisdiction and enforcement.
    2268.           Penalty.
                        (a) Forfeiture and payment; compromise,
                              modification, or remitting by Farm Credit
                              Administration; assessment and collection
                              by written notice.
                        (b) Factors determining amount.
                        (c) Notice and hearing; final orders.
                        (d) Judicial review.
                        (e) Action by Attorney General to recover
                              amount assessed.
                        (f) Rules and regulations.
                        (g) Payment into Treasury.
                        (h) Directives as final orders.
    2269.           Further penalties.
    2270.           Replacement of suspended or removed directors.
    2271.           Definitions.
    2272.           Notice of service.
    2273.           Ancillary provisions; subpena power; etc.
    2274.           Power to remove directors and officers.
                           PART D - MISCELLANEOUS
    2275.           General Accounting Office audit; report to
                      Congress.
    2275a.          Transition rules relating to amendment of certain
                      FCA approval authorities.
                        (a) In general.
                        (b) Authority to issue regulations.
                        (c) Effect of section.
    2276.           Access to and examination by Comptroller General of
                      books, documents, etc., of farm credit system
                      banks and institutions.
             PART E - FARM CREDIT SYSTEM INSURANCE CORPORATION
    2277a.          Definitions.
    2277a-1.        Establishment of Farm Credit System Insurance
                      Corporation.
    2277a-2.        Board of Directors.
                        (a) Establishment.
                        (b) Chairman.
    2277a-3.        Commencement of insurance.
    2277a-4.        Premiums.
                        (a) Amount in Fund not exceeding secure base
                              amount.
                        (b) Amount in Fund exceeding secure base
                              amount.
                        (c) Secure base amount.
                        (d) Determination of principal outstanding.
                        (e) Allocation to System institutions of excess
                              reserves.
    2277a-5.        Certification of premiums.
                        (a) Filing certified statement.
                        (b) Contents and form of statement.
                        (c) Initial premium payment.
                        (d) Subsequent premium payments.
                        (e) Regulations.
    2277a-6.        Overpayment and underpayment of premiums; remedies.
                        (a) Overpayments.
                        (b) Underpayments.
                        (c) Failure to file statement or pay premium.
                        (d) Effect on other remedies.
    2277a-7.        General corporate powers.
    2277a-8.        Conduct of corporate affairs; examination of System
                      institutions.
                        (a) Conduct of corporate affairs.
                        (b) Examination of System institutions.
                        (c) Oath, affirmations, and testimony.
                        (d) Cooperation with FCA examiners.
    2277a-9.        Insurance Fund.
                        (a) Establishment.
                        (b) Amounts in Fund.
                        (c) Uses of Fund.
    2277a-10.       Powers of Corporation with respect to troubled
                      insured System banks.
                        (a) Authority to provide assistance.
                        (b) Authority to pledge or sell assets.
                        (c) Subrogation.
                        (d) Right to assets.
                        (e) Insured System bank.
                        (f) Effective date.
    2277a-10a.      Oversight actions by Corporation.
                        (a) ''Institution'' defined.
                        (b) Consultation regarding participation of
                              undercapitalized banks in issuance of
                              insured obligations.
                        (c) Consultation regarding applications for
                              mergers and restructurings.
    2277a-10b.      Authority to regulate golden parachute and
                      indemnification payments.
                        (a) Definitions.
                        (b) Prohibition.
                        (c) Factors to be taken into account.
                        (d) Certain payments prohibited.
                        (e) Rule of construction.
    2277a-11.       Investment of funds.
    2277a-12.       Exemption from taxation.
    2277a-13.       Reports.
                        (a) In general.
                        (b) Contents.
    2277a-14.       Prohibitions.
                        (a) Corporate name.
                        (b) Payments or distributions while in default.
                        (c) Failure to file statement or pay premium.
                        (d) Employment of persons convicted of criminal
                              offenses.
              SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
                         PART A - ASSISTANCE BOARD
    2278a.          Establishment of Board.
                        (a) Charters.
                        (b) Use of Capital Corporation staff.
    2278a-1.        Purposes.
    2278a-2.        Board of Directors.
                        (a) Membership.
                        (b) Chairman.
                        (c) Terms of office, succession, and vacancies.
                        (d) Compensation of Board members.
                        (e) Rules and records.
                        (f) Quorum required.
                        (g) Chief executive officer.
    2278a-3.        Corporate powers.
                        (a) In general.
                        (b) Power to remove; jurisdiction.
    2278a-4.        Certification of eligibility to issue preferred
                      stock.
                        (a) Book value less than par value of stock and
                              equities.
                        (b) Book value less than 75 percent of par
                              value of stock and equities.
                        (c) Mandatory determination of eligibility.
                        (d) Implementation.
                        (e) ''Other similar equities'' defined.
    2278a-5.        Assistance.
                        (a) In general.
                        (b) ''High-cost debt'' defined.
                        (c) Minimum equity value.
                        (d) Limitation.
    2278a-6.        Special powers.
                        (a) In general.
                        (b) Suspension of assistance.
                        (c) Undated letters of resignation.
                        (d) Reports.
    2278a-7.        Administration.
                        (a) Expenses.
                        (b) Interim funding.
                        (c) Assistance operations.
                        (d) Access to FCA documents.
    2278a-8.        Limitation of powers.
                        (a) Purposes.
                        (b) Prohibition.
    2278a-9.        Succession.
                        (a) Assets and liabilities.
                        (b) Contracts.
                        (c) Adjustment of assessments.
                        (d) Surplus funds.
                        (e) Preservation agreements.
    2278a-10.       Effect of regulations; audits.
                        (a) Issuance.
                        (b) Regulation by Farm Credit Administration.
                        (c) Audits.
    2278a-11.       Exemption from taxation.
    2278a-12.       Termination.
    2278a-13.       Transitional provisions.
                        (a) Exercise of powers.
                        (b) Limitation on assistance.
                        (c) Issuance of stock.
                        (d) Repayment.
                 PART B - FINANCIAL ASSISTANCE CORPORATION
    2278b.          Establishment of Corporation.
    2278b-1.        Purpose.
    2278b-2.        Board of Directors.
                        (a) Board of Directors.
                        (b) Rules and records.
                        (c) Quorum required.
                        (d) Chief executive officer.
    2278b-3.        Stock.
    2278b-4.        Corporate powers.
                        (a) In general.
                        (b) Power to remove, and jurisdiction.
    2278b-5.        Accounts.
                        (a) Farm Credit Assistance Fund.
                        (b) Financial Assistance Corporation Trust
                              Fund.
    2278b-6.        Debt obligations.
                        (a) Issuance.
                        (b) Conditions.
                        (c) Interest payments.
                        (d) Refinancing and payment of principal;
                              defaults.
                        (e) Administration.
    2278b-7.        Preferred stock.
                        (a) Issuance.
                        (b) Purchase.
    2278b-8.        Payments.
                        (a) In general.
                        (b) Authorization of appropriations.
    2278b-9.        One-time stock purchase.
                        (a) Amount of stock purchase.
                        (b) Computations.
                        (c) Notice.
                        (d) Institution requirements after notice.
                        (e) Jurisdiction over actions.
    2278b-10.       Exemption from taxation.
                        (a) Assets.
                        (b) Obligations.
    2278b-11.       Termination.
                        (a) Financial Assistance Corporation.
                        (b) Accounts.
           SUBCHAPTER VII - RESTRUCTURING OF SYSTEM INSTITUTIONS
                 PART A - MERGER OF BANKS WITHIN A DISTRICT
    2279a.          Power to merge.
    2279a-1.        Board of directors.
    2279a-2.        Powers of merged banks.
                        (a) In general.
                        (b) Regulations.
    2279a-3.        Capitalization.
    2279a-4, 2279a-5. Repealed or Transferred.
     PART B - MERGERS, TRANSFERS OF ASSETS, AND POWERS OF ASSOCIATIONS
                             WITHIN A DISTRICT
      SUBPART 1 - TRANSFERS BY FEDERAL LAND BANKS TO FEDERAL LAND BANK
                                ASSOCIATIONS
    2279b.          Transfer of lending authority.
                        (a) Voluntary transfers.
                        (b) Direct loans and financial assistance.
                        (c) Regulations.
                        (d) Mandatory transfer.
             SUBPART 2 - MERGER OF LIKE AND UNLIKE ASSOCIATIONS
    2279c.          Transferred.
    2279c-1.        Merger of associations.
                        (a) In general.
                        (b) Powers, obligations, and consolidation.
                        (c) Stock issuance.
                        SUBPART 3 - RECONSIDERATION
    2279c-2.        Reconsideration.
                        (a) Period.
                        (b) Reconsideration.
                        (c) Special reconsideration.
          SUBPART 4 - TERMINATION AND DISSOLUTION OF INSTITUTIONS
    2279d.          Termination of System institution status.
                        (a) Conditions.
                        (b) Effect.
        PART C - APPROVAL OF DISCLOSURE INFORMATION AND ISSUANCE OF
              CHARTERS BY THE FARM CREDIT ADMINISTRATION BOARD
    2279e.          Approval of disclosure information and issuance of
                      charters.
                        (a) Disclosure of information.
                        (b) Notice of reasons for disapproval.
                        (c) Federal charter.
                     PART D - MERGERS OF LIKE ENTITIES
    2279f.          Merger of similar banks.
                        (a) In general.
                        (b) Powers and capitalization.
                        (c) Board of directors.
    2279f-1.        Merger of similar associations.
                        (a) In general.
                        (b) Procedures.
                  PART E - TAXATION OF MERGER TRANSACTIONS
    2279g.          Transactions to accomplish mergers exempt from
                      certain State taxes.
          SUBCHAPTER VIII - AGRICULTURAL MORTGAGE SECONDARY MARKET
    2279aa.         Definitions.
       PART A - ESTABLISHMENT AND ACTIVITIES OF FEDERAL AGRICULTURAL
                            MORTGAGE CORPORATION
    2279aa-1.       Federal Agricultural Mortgage Corporation.
                        (a) Establishment.
                        (b) Duties.
    2279aa-2.       Board of directors.
                        (a) Interim board.
                        (b) Permanent board.
                        (c) Officers and staff.
    2279aa-3.       Powers and duties of Corporation and Board.
                        (a) Guarantees.
                        (b) Duties of Board.
                        (c) Powers of Corporation.
                        (d) Federal Reserve banks as depositaries and
                              fiscal agents.
                        (e) Access to book-entry system.
    2279aa-4.       Stock issuance.
                        (a) Voting common stock.
                        (b) Required capital contributions.
                        (c) Dividends.
                        (d) Nonvoting common stock.
                        (e) Preferred stock.
    2279aa-5.       Certification of agricultural mortgage marketing
                      facilities.
                        (a) Eligibility standards.
                        (b) Certification by Corporation.
                        (c) Maximum time period for certification.
                        (d) Revocation.
                        (e) Affiliation of FCS institutions with
                              facility.
    2279aa-6.       Guarantee of qualified loans.
                        (a) Guarantee authorized for certified
                              facilities.
                        (b) Other responsibilities of and limitations
                              on certified facilities.
                        (c) Additional authority of Board.
                        (d) Aggregate principal amounts of qualified
                              loans.
                        (e) Purchase of guaranteed securities.
    2279aa-7.       Repealed.
    2279aa-8.       Standards for qualified loans.
                        (a) Standards.
                        (b) Minimum criteria.
                        (c) Loan amount limitation.
                        (d) Congressional review.
                        (e) Nondiscrimination requirement.
    2279aa-9.       Exemption from restructuring and borrowers rights
                      provisions for pooled loans.
                        (a) Restructuring.
                        (b) Borrowers rights.
    2279aa-10.      Funding for guarantee; reserves of Corporation.
                        (a) Guarantee.
                        (b) Guarantee fees.
                        (c) Corporation reserve against guarantees
                              losses required.
                        (d) Fees to cover administrative costs
                              authorized.
    2279aa-11.      Supervision, examination, and report of condition.
                        (a) Regulation.
                        (b) Examinations and audits.
                        (c) Annual report of condition.
                        (d) FCA assessments to cover costs.
                        (e) ''Affiliate'' defined.
                        (f) Employees and personnel.
    2279aa-12.      Securities in credit enhanced pools.
                        (a) Federal laws.
                        (b) State securities laws.
                        (c) Authorized investments.
                        (d) State usury laws superseded.
    2279aa-13.      Authority to issue obligations to cover guarantee
                      losses of Corporation.
                        (a) Sale of obligations to Treasury.
                        (b) Expeditious transaction required.
                        (c) Limitation on amount of outstanding
                              obligations.
                        (d) Terms of obligation.
                        (e) Coordination with title 31.
                        (f) Authorization of appropriations.
    2279aa-14.      Federal jurisdiction.
      PART B - REGULATION OF FINANCIAL SAFETY AND SOUNDNESS OF FEDERAL
                     AGRICULTURAL MORTGAGE CORPORATION
    2279bb.         Definitions.
    2279bb-1.       Risk-based capital levels.
                        (a) Risk-based capital test.
                        (b) Considerations.
                        (c) Risk-based capital level.
                        (d) Specified contents.
                        (e) Availability of model.
    2279bb-2.       Minimum capital level.
                        (a) In general.
                        (b) Transition period.
    2279bb-3.       Critical capital level.
    2279bb-4.       Enforcement levels.
                        (a) In general.
                        (b) Discretionary classification.
                        (c) Quarterly determination.
                        (d) Notice.
                        (e) Implementation.
    2279bb-5.       Mandatory actions applicable to level II.
                        (a) Capital restoration plan.
                        (b) Restriction on dividends.
                        (c) Reclassification from level II to level
                              III.
                        (d) Effective date.
    2279bb-6.       Supervisory actions applicable to level III.
                        (a) Mandatory supervisory actions.
                        (b) Discretionary supervisory actions.
                        (c) Effective date.
    2297bb-7.       Recapitalization of Corporation.
                        (a) Mandatory recapitalization.
                        (b) Raising core capital.
                        (c) Limitation on growth of total assets.
                        (d) Enforcement.
     PART C - RECEIVERSHIP, CONSERVATORSHIP, AND LIQUIDATION OF FEDERAL
                     AGRICULTURAL MORTGAGE CORPORATION
    2279cc.         Conservatorship; liquidation; receivership.
                        (a) Voluntary liquidation.
                        (b) Involuntary liquidation.
                        (c) Appointment of conservator or receiver.
                        (d) Judicial review of appointment.
                        (e) General powers of conservator or receiver.
                        (f) Borrowings for working capital.
                        (g) Agreements against interests of conservator
                              or receiver.
                        (h) Report to Congress.
                        (i) Termination of authorities.
 
-SECREF-
                   CHAPTER REFERRED TO IN OTHER SECTIONS
      This chapter is referred to in sections 1786, 1818 of this title;
    title 15 sections 1607, 1691c, 6505; title 18 section 1030; title
    42 section 9601.
 
-CITE-
    12 USC Sec. 2001                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
 
-HEAD-
    Sec. 2001. Congressional declaration of policy and objectives
 
-STATUTE-
      (a) It is declared to be the policy of the Congress, recognizing
    that a prosperous, productive agriculture is essential to a free
    nation and recognizing the growing need for credit in rural areas,
    that the farmer-owned cooperative Farm Credit System be designed to
    accomplish the objective of improving the income and well-being of
    American farmers and ranchers by furnishing sound, adequate, and
    constructive credit and closely related services to them, their
    cooperatives, and to selected farm-related businesses necessary for
    efficient farm operations.
      (b) It is the objective of this chapter to continue to encourage
    farmer- and rancher-borrowers participation in the management,
    control, and ownership of a permanent system of credit for
    agriculture which will be responsive to the credit needs of all
    types of agricultural producers having a basis for credit, and to
    modernize and improve the authorizations and means for furnishing
    such credit and credit for housing in rural areas made available
    through the institutions constituting the Farm Credit System as
    herein provided.
      (c) It is declared to be the policy of Congress that the credit
    needs of farmers, ranchers, and their cooperatives are best served
    if the institutions of the Farm Credit System provide equitable and
    competitive interest rates to eligible borrowers, taking into
    consideration the creditworthiness and access to alternative
    sources of credit for borrowers, the cost of funds, including any
    costs of defeasance under section 2159(b) of this title, the
    operating costs of the institution, including the costs of any loan
    loss amortization under section 2254(b) of this title, the cost of
    servicing loans, the need to retain earnings to protect borrowers'
    stock, and the volume of net new borrowing.  Further, it is
    declared to be the policy of Congress that Farm Credit System
    institutions take action in accordance with the Farm Credit Act
    Amendments of 1986 in such manner that borrowers from the
    institutions derive the greatest benefit practicable from that Act:
    Provided, That in no case is any borrower to be charged a rate of
    interest that is below competitive market rates for similar loans
    made by private lenders to borrowers of equivalent creditworthiness
    and access to alternative credit.
 
-SOURCE-
    (Pub. L. 92-181, Sec. 1.1, Dec. 10, 1971, 85 Stat. 583; Pub. L.
    99-509, title I, Sec. 1032, Oct. 21, 1986, 100 Stat. 1877.)
 
-REFTEXT-
                             REFERENCES IN TEXT
      The Farm Credit Act Amendments of 1986, referred to in subsec.
    (c), is subtitle D of Pub. L. 99-509, title I, Sec. 1031-1037, Oct.
    21, 1986, 100 Stat. 1877, which amended sections 2001, 2015, 2075,
    2131, 2159, 2205, 2252, and 2254 of this title and enacted
    provisions set out as a note below.  For complete classification of
    this Act to the Code, see Short Title of 1986 Amendment note below
    and Tables.
 
-MISC2-
                                 AMENDMENTS
      1986 - Subsec. (c). Pub. L. 99-509 added subsec. (c).
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Pub. L. 99-205, title IV, Sec. 401, Dec. 23, 1985, 99 Stat. 1709,
    provided that: ''The provisions of titles I, II, III, and VI of
    this Act (enacting sections 2152, 2161, 2199, 2200, 2216 to 2216k,
    2219, 2219a, 2253, 2261 to 2273 of this title and provisions set
    out as notes under section 2001 of this title, amending sections
    2002, 2012, 2013, 2031, 2033, 2034, 2051, 2052, 2054, 2072 to 2074,
    2077, 2078, 2091, 2093 to 2096, 2098, 2122 to 2126, 2132 to 2134,
    2151, 2153 to 2156, 2182, 2183, 2201, 2202, 2205, 2206, 2211 to
    2213, 2221 to 2223, 2227, 2241 to 2246, 2248 to 2252, and 2254 of
    this title, and repealing sections 2152, 2247, and 2253 of this
    title) shall become effective thirty days after enactment (Dec. 23,
    1985).''
                       SHORT TITLE OF 1996 AMENDMENT
      Pub. L. 104-105, Sec. 1(a), Feb. 10, 1996, 110 Stat. 162,
    provided that: ''This Act (enacting sections 2214a, 2219e,
    2277a-10a, 2277a-10b, 2279bb-7, and 2279cc of this title, amending
    sections 2013, 2018, 2020, 2129, 2154a, 2199, 2202a, 2252, 2254,
    2277a, 2277a-2, 2277a-4, 2277a-5, 2277a-7, 2277a-8, 2277a-10,
    2279aa, 2279aa-1, 2279aa-3, 2279aa-5, 2279aa-6, 2279aa-8, 2279aa-9,
    2279aa-11 to 2279aa-13, 2279bb-1 to 2279bb-4 of this title,
    sections 5314 and 5315 of Title 5, Government Organization and
    Employees, and section 1999 of Title 7, Agriculture, repealing
    section 2279aa-7 of this title, and enacting provisions set out as
    notes under this section and sections 2013 and 2252 of this title)
    may be cited as the 'Farm Credit System Reform Act of 1996'.''
                       SHORT TITLE OF 1994 AMENDMENT
      Pub. L. 103-376, Sec. 1, Oct. 19, 1994, 108 Stat. 3497, provided
    that: ''This Act (enacting section 2206a of this title and amending
    sections 2122, 2128, and 2129 of this title) may be cited as the
    'Farm Credit System Agricultural Export and Risk Management Act'.''
                       SHORT TITLE OF 1992 AMENDMENT
      Pub. L. 102-552, Sec. 1(a), Oct. 28, 1992, 106 Stat. 4102,
    provided that: ''This Act (see Tables for classification) may be
    cited as the 'Farm Credit Banks and Associations Safety and
    Soundness Act of 1992'.''
                       SHORT TITLE OF 1988 AMENDMENTS
      Pub. L. 100-399, Sec. 1, Aug. 17, 1988, 102 Stat. 989, provided
    that: ''This Act (see Tables for classification) may be cited as
    the 'Agricultural Credit Technical Corrections Act of 1988'.''
      Pub. L. 100-233, Sec. 1(a), Jan. 6, 1988, 101 Stat. 1568,
    provided that: ''This Act (see Tables for classification) may be
    cited as the 'Agricultural Credit Act of 1987'.''
                       SHORT TITLE OF 1986 AMENDMENT
      Section 1031 of title I of Pub. L. 99-509 provided that: ''This
    subtitle (subtitle D (Sec. 1031-1037) of title I of Pub. L. 99-509,
    amending sections 2001, 2015, 2075, 2131, 2159, 2205, 2252, and
    2254 of this title) may be cited as the 'Farm Credit Act Amendments
    of 1986'.''
                       SHORT TITLE OF 1985 AMENDMENT
      Pub. L. 99-205, Sec. 1, Dec. 23, 1985, 99 Stat. 1678, provided:
    ''That this Act (enacting sections 2152, 2161, 2199, 2200, 2216 to
    2216k, 2219, 2219a, 2253, 2261 to 2273 of this title and provisions
    set out as notes under this section and section 2241 of this title,
    amending sections 2002, 2012, 2013, 2031, 2033, 2034, 2051, 2052,
    2054, 2072 to 2074, 2077, 2078, 2091, 2093 to 2096, 2098, 2122 to
    2126, 2132 to 2134, 2151, 2153 to 2156, 2182, 2183, 2201, 2202,
    2205, 2206, 2211 to 2213, 2221 to 2223, 2227, 2241 to 2246, 2248 to
    2252, and 2254 of this title, and repealing sections 2152, 2247,
    and 2253 of this title) may be cited as the 'Farm Credit Amendments
    Act of 1985'.''
                       SHORT TITLE OF 1980 AMENDMENT
      Pub. L. 96-592, Sec. 1, Dec. 24, 1980, 94 Stat. 3437, provided:
    ''That this Act (enacting sections 2205 to 2208, 2211 to 2214,
    2218, and 2260 of this title and amending sections 1141b, 2012 to
    2020, 2033, 2034, 2051 to 2054, 2072 to 2077, 2091, 2093, 2094,
    2096, 2097, 2122, 2124, 2126, 2128 to 2132, 2156, 2181, 2221, 2223,
    2242, 2244, 2249, 2251, and 2252 of this title and section 3802 of
    Title 7, Agriculture) may be cited as the 'Farm Credit Act
    Amendments of 1980'.''
                                SHORT TITLE
      Section 1 of Pub. L. 92-181 provided: ''That this Act (enacting
    this chapter and provisions set out as notes under this section,
    amending sections 5314 and 5315 of Title 5, Government Organization
    and Employees, and section 393 of this title, and repealing section
    636 et seq. of this title) may be cited as the 'Farm Credit Act of
    1971'.''
                                REGULATIONS
      Pub. L. 104-105, title III, Sec. 301, Feb. 10, 1996, 110 Stat.
    185, provided that: ''The Secretary of Agriculture and the Farm
    Credit Administration shall promulgate regulations and take other
    required actions to implement the provisions of this Act (see Short
    Title of 1996 Amendment note above) not later than 90 days after
    the effective date of this Act (Feb. 10, 1996).''
      Pub. L. 100-233, title IX, Sec. 901, Jan. 6, 1988, 101 Stat.
    1717, as amended by Pub. L. 100-399, title VIII, Sec. 801, Aug. 17,
    1988, 102 Stat. 1006, provided that:
      ''(a) Issuance of Regulations. -
        ''(1) Authority. - The Farm Credit Administration Board shall
      issue such regulations as the Board considers necessary for the
      orderly and efficient implementation of the provisions of, and
      the amendments made by, this Act (see Tables for classification)
      relating to the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.).
        ''(2) Timing. - To the extent the Farm Credit Administration is
      required to issue regulations to implement this Act and the
      amendments made by this Act, the Farm Credit Administration shall
      issue such regulations as expeditiously as possible, and, except
      as otherwise provided in this Act, not later than 180 days after
      the date of the enactment of this Act (Jan. 6, 1988).
      ''(b) Temporary Retention of Certain Regulations. -
        ''(1) In general. - Except as otherwise provided in this
      subsection, the regulations issued by the Farm Credit
      Administration before the date of the enactment of this Act (Jan.
      6, 1988) under provisions amended by this Act shall remain in
      effect, notwithstanding such amendments, until the Farm Credit
      Administration issues regulations to implement such amendments,
      but in no event later than 180 days after such date of enactment.
        ''(2) Certain regulations relating to borrowers' rights. - The
      regulations implementing, interpreting, or applying part C of
      title IV (12 U.S.C. 2201 et seq.) (12 U.S.C. 2199 et seq.) (other
      than section 4.13(a) (12 U.S.C. 2199(a))) (in effect immediately
      before the date of the enactment of this Act), to the extent that
      such regulations are not contrary to this Act and the amendments
      made by this Act, shall remain in effect until January 1, 1989.
        ''(3) Regulations relating to disclosure by banks and
      associations. - Any regulation issued or approved by the Farm
      Credit Administration that implements, interprets, or applies
      section 4.13(a) (12 U.S.C. 2201(a) (12 U.S.C. 2199(a))) (in
      effect immediately before the date of the enactment of this Act)
      shall remain in effect for 120 days after such date of
      enactment.''
                                  REPEALS
      Pub. L. 92-181, which enacted this chapter, represents a complete
    rewriting of the farm credit laws and a fundamental reworking of
    the statutory basis for the farm credit system.  In connection with
    such reworking of material, the existing statutory provisions
    covering this area were repealed and their substance revised,
    reenacted, and expanded by Pub. L. 92-181.
      The repealed provisions constituted the bulk of chapter 7 of this
    title.  Section 5.40(a), formerly 5.26(a), of Pub. L. 92-181, as
    renumbered by Pub. L. 99-205, title II, Sec. 205(a)(2), Dec. 23,
    1985, 99 Stat. 1703, enumerated the repealed statutes as follows:
    The Federal Farm Loan Act, as amended; section 2 of the Act of
    March 10, 1924 (Public Numbered 35, Sixty-eighth Congress, 43 Stat.
    17), as amended; section 6 of the Act of January 23, 1932 (Public
    Numbered 3, Seventy-second Congress, 47 Stat. 14), as amended; the
    Farm Credit Act of 1933, as amended; sections 29 and 40 of the
    Emergency Farm Mortgage Act of 1933; Act of June 18, 1934 (Public
    Numbered 381, Seventy-third Congress, 48 Stat. 983); Act of June 4,
    1936 (Public Numbered 644, Seventy-fourth Congress, 49 Stat. 1461),
    as amended; sections 5, 6, 20, 25(b) and 39 of the Farm Credit Act
    of 1937, as amended; sections 601 and 602 of the Act of September
    21, 1944 (Public Law 425, Seventy-eighth Congress, 58 Stat. 740,
    741), as amended; sections 1, 2, 3, 4, 5, 6, 7, 8, 16, and 17(b) of
    the Farm Credit Act of 1953, as amended; sections 2, 101, and
    201(b) of the Farm Credit Act of 1956.
                             SAVINGS PROVISION
      Section 5.40(b), formerly Sec. 5.26(b), of Pub. L. 92-181, as
    renumbered by Pub. L. 99-205, title II, Sec. 205(a)(2), Dec. 23,
    1985, 99 Stat. 1703, provided that: ''All regulations of the Farm
    Credit Administration or the institutions of the System and all
    charters, bylaws, resolutions, stock classifications, and policy
    directives issued or approved by the Farm Credit Administration,
    and all elections held and appointments made under the Acts
    repealed by subsection (a) of this section (see Repeals note above)
    shall be continuing and remain valid until superseded, modified, or
    replaced under the authority of this Act (this chapter).  All
    stock, notes, bonds, debentures, and other obligations issued under
    the repealed acts shall be valid and enforceable upon the terms and
    conditions under which they were issued, including the pledge of
    collateral against which they were issued, and all loans made and
    security or collateral therefor held by, and all contracts entered
    into by, institutions of the System shall remain enforceable
    according to their terms unless and until modified in accordance
    with the provisions of this Act; it being the purpose of this
    subsection to avoid disruption in the effective operation of the
    System by reason of said repeals.''
                                SEPARABILITY
      Section 5.42, formerly Sec. 5.28, of Pub. L. 92-181, as
    renumbered by Pub. L. 99-205, title II, Sec. 205(a)(2), Dec. 23,
    1985, 99 Stat. 1703, provided that: ''If any provision of this Act
    (this chapter), or the application thereof to any persons or in any
    circumstances, is held invalid, the remainder of this Act and the
    application of such provision to other persons or in other
    circumstances shall not be affected thereby.''
                   REFERENCES TO EARLIER FARM CREDIT ACTS
      Section 5.40(a), formerly Sec. 5.26(a), of Pub. L. 92-181, as
    renumbered by Pub. L. 99-205, title II, Sec. 205(a)(2), Dec. 23,
    1985, 99 Stat. 1703, provided in part that: ''All references in
    other legislation, State or Federal, rules and regulations of any
    agency, stock, contracts, deeds, security instruments, bonds,
    debentures, notes, mortgages and other documents of the
    institutions of the System, to the Acts repealed hereby (see
    Repeals note above), shall be deemed to refer to comparable
    provisions of this Act (this chapter).''
                  RESERVATION OF RIGHT TO AMEND OR REPEAL
      Section 5.43, formerly Sec. 5.29, of Pub. L. 92-181, as
    renumbered by Pub. L. 99-205, title II, Sec. 205(a)(2), Dec. 23,
    1985, 99 Stat. 1703, provided that: ''The right to alter, amend, or
    repeal any provision or all of this Act (this chapter) is expressly
    reserved.''
     STUDY ON DEMAND FOR AND AVAILABILITY OF CREDIT IN RURAL AREAS FOR
                AGRICULTURE, HOUSING, AND RURAL DEVELOPMENT
      Pub. L. 104-127, title VI, Sec. 650, Apr. 4, 1996, 110 Stat.
    1105, provided that:
      ''(a) In General. - The Secretary of Agriculture shall conduct a
    study and report to the Committee on Agriculture of the House of
    Representatives and the Committee on Agriculture, Nutrition, and
    Forestry of the Senate on the demand for and availability of credit
    in rural areas for agriculture, housing, and rural development.
      ''(b) Purpose. - The purpose of the study shall be to ensure that
    Congress has current and comprehensive information to consider as
    Congress deliberates on rural credit needs and the availability of
    credit to satisfy the needs of rural areas of the United States.
      ''(c) Items in Study. - In conducting the study, the Secretary
    shall base the study on the most current available data and analyze
    -
        ''(1) rural demand for credit from the Farm Credit System, the
      ability of the Farm Credit System to meet the demand, and the
      extent to which the Farm Credit System provides loans to satisfy
      the demand;
        ''(2) rural demand for credit from the United States banking
      system, the ability of banks to meet the demand, and the extent
      to which banks provide loans to satisfy the demand;
        ''(3) rural demand for credit from the Secretary, the ability
      of the Secretary to meet the demand, and the extent to which the
      Secretary provides loans to satisfy the demand;
        ''(4) rural demand for credit from other Federal agencies, the
      ability of the agencies to meet the demand, and the extent to
      which the agencies provide loans to satisfy the demand;
        ''(5) what measure or measures exist to gauge the overall
      demand for rural credit, the extent to which rural demand for
      credit is satisfied, and what the measures have demonstrated;
        ''(6) a comparison of the interest rates and terms charged by
      the Farm Credit System Farm Credit Banks, production credit
      associations, and banks for cooperatives with the rates and terms
      charged by the banks of the United States for credit of
      comparable risk and maturity;
        ''(7) the advantages and disadvantages of the modernization and
      expansion proposals of the Farm Credit System on the Farm Credit
      System, the United States banking system, rural users of credit,
      local rural communities, and the Federal Government, including -
          ''(A) any added risk to the safety and soundness of the Farm
        Credit System that may result from approval of a proposal; and
          ''(B) any positive or adverse impacts on competition between
        the Farm Credit System and the banks of the United States in
        providing credit to rural users;
        ''(8) the nature and extent of the unsatisfied rural credit
      need that the Farm Credit System proposals are supposed to
      address and what aspects of the present Farm Credit System
      prevent the Farm Credit System from meeting the need;
        ''(9) the advantages and disadvantages of the proposal by
      commercial bankers to allow banks access to the Farm Credit
      System as a funding source on the Farm Credit System, the United
      States banking system, rural users of credit, local rural
      communities, and the Federal Government, including -
          ''(A) any added risk to the safety and soundness of the Farm
        Credit System that may result from approval of the proposal;
        and
          ''(B) any positive or adverse impacts on competition between
        the Farm Credit System and the banks of the United States in
        providing credit to rural users; and
        ''(10) problems that commercial banks have in obtaining capital
      for lending in rural areas, how access to Farm Credit System
      funds would improve the availability of capital in rural areas in
      ways that cannot be achieved in the system in existence on the
      date of enactment of this Act (Apr. 4, 1996), and the possible
      effects on the viability of the Farm Credit System of granting
      banks access to Farm Credit System funds.
      ''(d) Interagency Task Force. - In completing the study, the
    Secretary shall use, among other things, data and information
    obtained by the interagency task force on rural credit.''
              GAO STUDY OF RURAL CREDIT COST AND AVAILABILITY
      Pub. L. 101-624, title XVIII, Sec. 1842, Nov. 28, 1990, 104 Stat.
    3835, directed Comptroller General of the United States to conduct
    a study relating to cost and availability of credit in rural
    America and, not later than 2 years after Nov. 28, 1990, submit a
    report to Committee on Agriculture of House of Representatives and
    Committee on Agriculture, Nutrition, and Forestry of Senate.
         AUTHORIZATION OF APPROPRIATIONS FOR NATIONAL COMMISSION ON
      AGRICULTURAL FINANCE AND NATIONAL COMMISSION ON AGRICULTURE AND
                          RURAL DEVELOPMENT POLICY
      Pub. L. 100-71, title V, Sec. 519(b), July 11, 1987, 101 Stat.
    475, authorized and appropriated (1) for National Commission on
    Agricultural Finance established under section 501 of Pub. L.
    99-205, $100,000, to remain available until expended, and (2) for
    National Commission on Agriculture and Rural Development (Policy)
    established under section 5002 of this title, $100,000, to remain
    available until expended.
                 LOAN REVIEW BY LOCAL LENDING INSTITUTIONS
      Pub. L. 99-205, title III, Sec. 307, Dec. 23, 1985, 99 Stat.
    1709, required each local lending institution of Farm Credit System
    established under this chapter to (1) review each loan that had
    been placed in non-accrual status by such institution to determine
    whether such loan could be restructured based on changes in
    circumstances of such institution as the result of this Act and the
    amendments made by this Act, and (2) notify in writing borrower of
    each such loan of provisions of this section.
                NATIONAL COMMISSION ON AGRICULTURAL FINANCE
      Pub. L. 99-205, title V, Sec. 501, Dec. 23, 1985, 99 Stat. 1710,
    directed President to appoint a National Commission on Agricultural
    Finance, comprised of 15 members, representing the financial
    community, the agricultural sector, and government, to conduct a
    study of methods to ensure availability of adequate credit to
    agricultural producers and agribusiness, taking into account
    long-term financing needs of agricultural economy, roles of
    commercial banks, Farm Credit System, and Farmers Home
    Administration in meeting those financial needs, with the
    Commission, in conducting such study, to (1) evaluate financial
    circumstances relative to both lenders and borrowers of farm
    credit, (2) evaluate structure, performance, and conduct of private
    lenders - commercial bankers and Farm Credit System - and public
    lenders, (3) explore need for long-term assistance in stabilizing
    value of agricultural assets, and (4) evaluate effect on suppliers,
    producers, processors, and local communities when financial
    institutions fail, and not later than Dec. 23, 1986, to submit to
    Congress a report containing results of study, together with
    comments and recommendations for legislation providing for a sound,
    reasonable, and primarily self-supporting credit program for
    farmers and ranchers as Commission considers appropriate.
 
-CITE-
    12 USC Sec. 2002                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
 
-HEAD-
    Sec. 2002. Farm Credit System
 
-STATUTE-
    (a) Composition
      The Farm Credit System shall include the the (FOOTNOTE 1) Farm
    Credit Banks, the Federal land bank associations, the production
    credit associations, the banks for cooperatives, and such other
    institutions as may be made a part of the System, all of which
    shall be chartered by and subject to regulation by the Farm Credit
    Administration.
       (FOOTNOTE 1) So in original.
    (b) Farm credit districts
      There shall be not more than twelve farm credit districts in the
    United States, which may be designated by number, one of which
    districts shall include the Commonwealth of Puerto Rico and one of
    which districts may, if authorized by the Farm Credit
    Administration, include the Virgin Islands of the United States:
    Provided, That the extension of credit and other services
    authorized by this chapter in the Virgin Islands of the United
    States shall be undertaken only if determined to be feasible under
    regulations of the Farm Credit Administration. The boundaries of
    the twelve farm credit districts existing on December 10, 1971, may
    be readjusted from time to time by the Farm Credit Administration,
    with the concurrence of the boards of the banks in each district
    involved.  Two or more districts may be merged as provided in
    section 2252(a)(2) of this title.
 
-SOURCE-
    (Pub. L. 92-181, Sec. 1.2, formerly Sec. 1.2, 5.0, Dec. 10, 1971,
    85 Stat. 583, 614; Pub. L. 96-592, title V, Sec. 501, Dec. 24,
    1980, 94 Stat. 3448; Pub. L. 99-205, title II, Sec. 205(c), (g)(1),
    Dec. 23, 1985, 99 Stat. 1703, 1706; Pub. L. 100-233, title IV, Sec.
    434, title VIII, Sec. 805(a), (v), Jan. 6, 1988, 101 Stat. 1662,
    1715, 1716; Pub. L. 100-399, title IX, Sec. 901(q)-(s), Aug. 17,
    1988, 102 Stat. 1008.)
 
-COD-
                                CODIFICATION
      Pub. L. 100-399, Sec. 901(r), transferred section 5.0 of Pub. L.
    92-181, which was classified to section 2221 of this title, to
    subsec. (b) of this section.
 
-MISC3-
                                 AMENDMENTS
      1988 - Subsec. (a). Pub. L. 100-399, Sec. 901(s), designated
    existing provisions as subsec. (a), inserted heading, and
    substituted ''regulation'' for ''the regulation''.
      Pub. L. 100-233, Sec. 434, amended provisions generally.  Prior
    to amendment, provisions read as follows: ''The Farm Credit System
    shall include the Federal land banks, the Federal land bank
    associations, the Federal intermediate credit banks, the production
    credit associations, the banks for cooperatives, and such other
    institutions as may be made a part of the System, all of which
    shall be chartered by and subject to regulation by the Farm Credit
    Administration.''
      Pub. L. 100-233, Sec. 805(a), substituted ''subject to
    regulation'' for ''subject to the regulation''.
      Subsec. (b). Pub. L. 100-399, Sec. 901(q), (r), designated
    section 2221 of this title as subsec. (b), inserted heading, and
    substituted ''boards of the banks in each district'' for ''district
    boards''.
      Pub. L. 100-233, Sec. 805(v), substituted ''section 2252(a)(2) of
    this title'' for ''section 2252(2) of this title''.
      1985 - Subsec. (a). Pub. L. 99-205, Sec. 205(c), substituted
    ''regulation by'' for ''supervision of''.
      Subsec. (b). Pub. L. 99-205, Sec. 205(g)(1), substituted ''Farm
    Credit Administration'' for ''Federal Farm Credit Board'' in first
    and second sentences, and made a technical amendment to reference
    to section 2252(2) of this title to reflect the renumbering of the
    corresponding section of the original act.
      1980 - Subsec. (b). Pub. L. 96-592 inserted provisions relating
    to Virgin Islands of the United States.
                     EFFECTIVE DATE OF 1988 AMENDMENTS
      Section 1001 of Pub. L. 100-399 provided that:
      ''(a) General Rule. - Except as provided in subsection (b), the
    amendments made by this Act (see Tables for classification) shall
    take effect as if enacted immediately after the enactment of the
    1987 Act (Pub. L. 100-233, which was enacted Jan. 6, 1988).
      ''(b) Exceptions. - The amendments made by sections 102(b),
    102(f), 102(g), 102(h), 201(q), 302(c), 302(d), 302(e), 401,
    402(b), 409(d), 411, 414, and 901 (other than by subsections (a),
    (b), (c), (e), (f), and (g) thereof) of this Act (see Tables for
    classification) shall take effect immediately after the amendment
    made by section 401 of the 1987 Act takes effect (section 401 of
    Pub. L. 100-233, effective 6 months after Jan. 6, 1988).''
      Section 434 of Pub. L. 100-233 provided in part that the
    amendment of this section by section 434 of Pub. L. 100-233 is
    effective 6 months after Jan. 6, 1988.
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
                CONSOLIDATION OF DISTRICT FARM CREDIT BANKS
      Section 412 of Pub. L. 100-233, as amended by Pub. L. 100-399,
    title IV, Sec. 404, Aug. 17, 1988, 102 Stat. 999, provided that:
      ''(a) Submission of Proposal. -
        ''(1) Special committee. -
          ''(A) In general. - Not later than 6 months after the date of
        the enactment of this section (Jan. 6, 1988), a special
        committee shall be selected pursuant to regulations of the Farm
        Credit Administration for the purpose of developing a proposal
        for the consolidation of Farm Credit System districts.
          ''(B) Composition. - The special committee selected under
        subparagraph (A) shall be composed of one representative from
        each Farm Credit Bank board and the members of the Board of
        Directors of the Assistance Board.
        ''(2) Development of proposal. - Not later than 6 months after
      the formation of the special committee, the committee shall
      develop a proposal to consolidate the Farm Credit Banks into no
      less than six financially viable Farm Credit Banks through
      inter-district mergers.
        ''(3) Report. - Not later than the end of each calendar quarter
      beginning at least 6 months after the selection of the special
      committee, such committee shall prepare and submit, to the
      Committee on Agriculture of the House of Representatives, and the
      Committee on Agriculture, Nutrition, and Forestry of the Senate,
      a report on the progress of the committee in developing a
      proposal under this subsection.
      ''(b) Prerequisites to Consolidation. -
        ''(1) FCA review of proposal. - Prior to the submission of the
      proposal developed under subsection (a)(2) to the stockholders
      under paragraph (3), the proposal together with all information
      to be presented to the stockholders, shall be submitted to the
      Farm Credit Administration for approval.
        ''(2) Prerequisites. - The proposal developed under subsection
      (a)(2) shall not be submitted to stockholders under paragraph (3)
      unless the proposal is approved by -
          ''(A) a majority of the members of the Board of Directors of
        the Assistance Board; and
          ''(B) the members of the special committee that represent the
        districts affected by the terms of the proposal.
        ''(3) Submission to stockholders. - Not later than the end of
      the 18-month period after the date of enactment of this Act (Jan.
      6, 1988), each Farm Credit Bank involved, in consultation with
      the special committee, shall submit the proposed merger affecting
      such bank to the voting stockholders of each such bank.
        ''(4) Stockholder vote. - Each association shall be entitled to
      cast a number of votes equal to the number of voting stockholders
      of such association.''
            APPLICABILITY OF LAWS ENACTED AFTER JANUARY 1, 1960
      Pub. L. 86-168, title II, Sec. 203(b), Aug. 18, 1959, 73 Stat.
    390, provided that: ''Any Act of Congress enacted after the
    effective date of this title (Jan. 1, 1960) and which states that
    it shall be applicable to agencies or instrumentalities of the
    United States or to corporations controlled or owned, in whole or
    in part, by the United States, or to officers and employees of the
    United States or such agencies or instrumentalities or
    corporations, shall not be applicable to a Federal land bank,
    Federal intermediate credit bank, or bank for cooperatives, or to
    its directors, officers, or employees unless such Act specifically
    so provides by naming such banks.''
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2271 of this title.
 
-CITE-
    12 USC SUBCHAPTER I - FARM CREDIT BANKS                      01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER I - FARM CREDIT BANKS
    .
 
-HEAD-
    SUBCHAPTER I - FARM CREDIT BANKS
 
-COD-
                                CODIFICATION
      Title I of the Farm Credit Act of 1971, comprising this
    subchapter, was originally enacted by Pub. L. 92-181, title I, Dec.
    10, 1971, 85 Stat. 583, and amended by Pub. L. 96-592, Dec. 24,
    1980, 94 Stat. 3437; Pub. L. 99-205, Dec. 23, 1985, 99 Stat. 1678;
    Pub. L. 99-509, Oct. 21, 1986, 100 Stat. 1874; Pub. L. 100-233,
    Jan. 6, 1988, 101 Stat. 1568. Such title is shown herein, however,
    as having been added by Pub. L. 100-233, title IV, Sec. 401, Jan.
    6, 1988, 101 Stat. 1622, without reference to such intervening
    amendments because of the extensive revision of the title's
    provisions by Pub. L. 100-233.
 
-SECREF-
                  SUBCHAPTER REFERRED TO IN OTHER SECTIONS
      This subchapter is referred to in sections 2122, 2202a, 2206a,
    2218, 2252 of this title.
 
-CITE-
    12 USC Sec. 2011                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER I - FARM CREDIT BANKS
 
-HEAD-
    Sec. 2011. Establishment, charters, titles, branches
 
-STATUTE-
    (a) Establishment
      The banks established pursuant to the merger of each District
    Federal Intermediate Credit Bank and Federal Land Bank (hereinafter
    referred to in this subchapter as ''Farm Credit Banks''), as
    provided in section 410 of the Agricultural Credit Act of 1987,
    shall be Federally chartered instrumentalities of the United
    States.
    (b) Charters
      The Farm Credit Administration shall, consistent with this
    chapter, issue charters for, and approve amendments to charters of,
    the Farm Credit Banks.
    (c) Title
      Each Farm Credit Bank may include in its title the name of the
    city in which it is located or other geographical designation.
    (d) Branches
      Each Farm Credit Bank may establish such branches or other
    offices as may be appropriate for the effective operation of its
    business.
 
-SOURCE-
    (Pub. L. 92-181, title I, Sec. 1.3, as added Pub. L. 100-233, title
    IV, Sec. 401, Jan. 6, 1988, 101 Stat. 1622; amended Pub. L.
    100-399, title IV, Sec. 401(a), (b), Aug. 17, 1988, 102 Stat. 995.)
 
-REFTEXT-
                             REFERENCES IN TEXT
      Section 410 of the Agricultural Credit Act of 1987, referred to
    in subsec. (a), is section 410 of Pub. L. 100-233, which is set out
    as a note below.
 
-MISC2-
                              PRIOR PROVISIONS
      A prior section 2011, Pub. L. 92-181, title I, Sec. 1.3, Dec. 10,
    1971, 85 Stat. 583; Pub. L. 100-233, title VIII, Sec. 802(a), Jan.
    6, 1988, 101 Stat. 1710, related to establishment, title, and
    branches of Federal land banks prior to the general amendment of
    this subchapter by Pub. L. 100-233, Sec. 401.
                                 AMENDMENTS
      1988 - Subsec. (a). Pub. L. 100-399, Sec. 401(a), inserted '', as
    provided in section 410 of the Agricultural Credit Act of 1987,''
    before ''shall''.
      Subsec. (b). Pub. L. 100-399, Sec. 401(b), amended subsec. (b)
    generally.  Prior to amendment, subsec. (b) read as follows: ''The
    charters or organization certificates of Farm Credit Banks may be
    modified from time to time by the Farm Credit Administration Board,
    not inconsistent with the provisions of this subchapter, as may be
    necessary or expedient to implement this chapter.''
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective immediately after
    amendment made by section 401 of Pub. L. 100-233, which was
    effective 6 months after Jan. 6, 1988, see section 1001(b) of Pub.
    L. 100-399, set out as a note under section 2002 of this title.
                               EFFECTIVE DATE
      Section 401 of Pub. L. 100-233 provided that this subchapter is
    effective 6 months after Jan. 6, 1988.
       LONG-TERM LENDING AUTHORITY OF FARM CREDIT BANK OF TEXAS WITH
          RESPECT TO STATES OF ALABAMA, LOUISIANA, AND MISSISSIPPI
      Pub. L. 102-552, title IV, Sec. 401(b), Oct. 28, 1992, 106 Stat.
    4128, provided that:
      ''(1) In general. - Notwithstanding any other provision of law,
    the Farm Credit Bank of Texas may act in accordance with the
    exclusive charter of the bank, as amended by the Farm Credit
    Administration on February 7, 1989, and effective February 9, 1989
    (except to the extent that the charter may be further amended by
    the Farm Credit Administration in accordance with its general
    authorities under the Farm Credit Act of 1971 (12 U.S.C. 2001 et
    seq.), subject to such limitations on the issuance of competitive
    charters as may be provided in section 5.17 of such Act (12 U.S.C.
    2252)).
      ''(2) Effective date. - Paragraph (1) shall take effect as if
    such paragraph had become law on February 7, 1989.''
                  MANDATORY MERGER OF SYSTEM INSTITUTIONS
      Section 410 of Pub. L. 100-233, as amended by Pub. L. 100-399,
    title IV, Sec. 402, Aug. 17, 1988, 102 Stat. 999; Pub. L. 102-552,
    title IV, Sec. 401(a), Oct. 28, 1992, 106 Stat. 4116, provided
    that:
      ''(a) In General. - Not later than 6 months after the date of the
    enactment of this section (Jan. 6, 1988), the Federal land bank and
    the Federal intermediate credit bank of each Farm Credit System
    district shall merge into a Farm Credit Bank in such district
    pursuant to a plan of merger agreed on by the Boards of Directors
    of such banks and approved by the Farm Credit Administration, or if
    such banks fail to agree, a plan of merger prescribed by the Farm
    Credit Administration. The mergers required by this section shall
    be implemented without regard to title VII (enacting sections
    2279aa to 2279aa-14 of this title, amending sections 2012, 2033,
    2072, and 2093 of this title, section 1988 of Title 7, Agriculture,
    and section 9105 of Title 31, Money and Finance, and enacting
    provisions set out as notes under section 2279aa of this title and
    section 1988 of Title 7).
      ''(b) Capital Stock. - Notwithstanding section 1.6 (as added by
    section 401 of this Act) (12 U.S.C. 2014), the number of shares of
    capital stock issued by a Farm Credit Bank to stockholders and
    other owners of the institution involved in the merger, and the
    rights and privileges of such shares (including voting power,
    redemption rights, preferences on liquidation, and the right to
    dividends) shall be determined by the plan of merger adopted by the
    merging banks, and shall be consistent with section 4.3A (12 U.S.C.
    2154a) and the regulations issued by the Farm Credit
    Administration.
      ''(c) Assistance. - The Assistance Board established under
    section 6.0 (12 U.S.C. 2278a) shall direct the Financial Assistance
    Corporation established under section 6.20 (12 U.S.C. 2278b) to
    provide any Farm Credit Bank with that amount of financial
    assistance as is necessary to ensure that the stock of the Farm
    Credit Bank, upon implementation of the merger, has a book value
    equal to 75 percent of par, and such Farm Credit Bank shall be
    subject to all of the requirements of title VI of the Farm Credit
    Act of 1971 (12 U.S.C. 2278a et seq.).
      ''(d) Initial Board. - Notwithstanding section 1.4 (as added by
    section 401 of this Act) (12 U.S.C. 2012), the initial board of
    each Farm Credit Bank shall be composed of the members of the
    district board (which is dissolved upon the creation of such bank)
    elected by the production credit associations, Federal land bank
    associations, and stockholders at large.  Such initial board shall
    operate for such term as is agreed to by the members of the board,
    except that such period shall not exceed two years.  Thereafter the
    board shall be elected and serve in accordance with the provisions
    of section 1.4 of the Farm Credit Act of 1971 (12 U.S.C. 2012).
      ''(e) Clarification of Authority Regarding Remaining Federal
    Intermediate Credit Bank. -
        ''(1) Negotiated merger. -
          ''(A) Requirement. -
            ''(i) In general. - Not later than June 30, 1993, except as
          provided in subparagraph (C), the Federal Intermediate Credit
          Bank of Jackson (as chartered on the date of enactment of
          this subsection (Oct. 28, 1992)) shall merge with a Farm
          Credit Bank pursuant to the procedures prescribed by section
          7.12 of the Farm Credit Act of 1971 (12 U.S.C. 2279f).
            ''(ii) Merger of entire bank. - Notwithstanding
          subparagraph (B), or any other provision of law, the Farm
          Credit Administration shall approve a merger of the Federal
          Intermediate Credit Bank of Jackson only if the Bank (as
          chartered on the date of enactment of this subsection (Oct.
          28, 1992), except as provided in subparagraph
          (B)(ii)(II)(bb)) merges in its entirety with a Farm Credit
          Bank.
            ''(iii) Limited lending authority. - Notwithstanding any
          provision of the Farm Credit Act of 1971 (12 U.S.C. 2001 et
          seq.), the Farm Credit Bank resulting from a merger under
          this subsection shall have only the lending authorities in
          the States of Alabama, Louisiana, and Mississippi that the
          constituent banks exercised in such States immediately prior
          to the merger, except as may be provided in section
          5.17(a)(2) of such Act (12 U.S.C. 2252(a)(2)).
          ''(B) Operating and merger authority. -
            ''(i) In general. - Except as provided in clause (ii), the
          Federal Intermediate Credit Bank of Jackson may operate
          subject to such provisions of part A of title II of the Farm
          Credit Act of 1971 (12 U.S.C. 2071 et seq.) (as in effect
          immediately before the amendment made by section 401 took
          effect) and such provisions of the Farm Credit Act of 1971
          (12 U.S.C. 2001 et seq.) (as in effect after the amendment),
          as the Farm Credit Administration deems appropriate to carry
          out the purposes of this subsection and such Act. This
          subparagraph shall take effect as if it had become law at the
          same time as the amendment made by section 401 and shall
          remain in effect until the Bank's merger with a Farm Credit
          Bank under this subsection, or July 1, 1994, whichever is
          sooner.
            ''(ii) Limitation on operating authority. -
     ''(I) In general. - Notwithstanding clause (i) and subparagraph
            (A)(ii), the authority of the Federal Intermediate Credit
            Bank of Jackson to operate as provided under clause (i)
            shall expire, and the Farm Credit Administration shall
            revoke the Bank's charter, immediately on the Bank's merger
            with a Farm Credit Bank under this subsection, or July 1,
            1994, whichever is sooner.
     ''(II) District boundary modification. - Notwithstanding clause
            (i), the authority of the Federal Intermediate Credit Bank
            of Jackson shall not include the authority for the Bank to
            modify, nor shall the Farm Credit Administration approve
            such a modification to, the boundaries of the Fifth Farm
            Credit District to reaffiliate any portion of the District
            with another Farm Credit Bank, except -
                ''(aa) in the case of the merger of the entire Bank as
              an entity with a Farm Credit Bank such that the entire
              chartered territory of the Federal Intermediate Credit
              Bank of Jackson (except as provided in item (bb)) is
              merged with the Farm Credit Bank; and
                ''(bb) in the case of the reaffiliation of the
              Northwest Louisiana Production Credit Association with
              another farm credit district pursuant to the Farm Credit
              Act of 1971 (12 U.S.C. 2001 et seq.) and any applicable
              regulations under such Act.
            ''(iii) Limitation on authority to merge. -
     ''(I) In general. - Notwithstanding clause (i), the authority of
            the Federal Intermediate Credit Bank of Jackson to merge
            with a Farm Credit Bank as provided under clause (i) shall
            expire, and the Farm Credit Administration shall revoke the
            Bank's charter, immediately on the Bank's merger with a
            Farm Credit Bank under this subsection, or July 1, 1994,
            whichever is sooner.
     ''(II) Bank integrity. - Notwithstanding clause (i), the authority
            of the Federal Intermediate Credit Bank of Jackson to merge
            with a Farm Credit Bank shall be limited to a merger of the
            Federal Intermediate Credit Bank of Jackson (as chartered
            on the date of enactment of this subsection (Oct. 28, 1992)
            to include the territory in the States of Alabama,
            Louisiana, and Mississippi, except as provided in clause
            (ii)(II)(bb)) as a whole entity such that the entire
            chartered territory of the Federal Intermediate Credit Bank
            of Jackson is merged with the Farm Credit Bank.
     ''(III) Limitation. - Beginning on the date of an order issued by
            the Farm Credit Administration under subparagraph (D), the
            authority of the Federal Intermediate Credit Bank of
            Jackson to merge with a Farm Credit Bank shall be limited
            to the arbitrated merger provided for in paragraph (2).
          ''(C) Extension. -
            ''(i) Letter of intent. - If no later than June 30, 1993,
          the Federal Intermediate Credit Bank of Jackson delivers to
          the Farm Credit Administration a letter of intent to merge
          with a Farm Credit Bank, summarizing the terms and conditions
          of the merger (including, but not limited to, board
          composition, capital structure, exchange, or transfer of
          equities, and termination) signed by the chief executive
          officer and the members of the boards of directors of the
          Federal Intermediate Credit Bank of Jackson and the Farm
          Credit Bank, the Farm Credit Administration shall, on its
          determination that the letter of intent represents a bona
          fide good faith agreement in principle between the two banks
          to merge, and that there is at least a reasonable prospect
          that the merger will be completed in an expeditious manner,
          grant a one-time extension, until a date certain not later
          than October 31, 1993, of the requirement under subparagraph
          (A). Any extension provided under this subparagraph may be
          conditioned on such terms and conditions as the Farm Credit
          Administration determines necessary to ensure that the merger
          described in the letter of intent is completed by the closing
          date of the extension.
            ''(ii) Compliance. - If the Farm Credit Administration
          grants an extension under clause (i), it shall issue an order
          under subparagraph (D) immediately if -
     ''(I) the Federal Intermediate Credit Bank of Jackson, or the Farm
            Credit Bank that is a signatory to the letter of intent
            under clause (i), provides written notification to the Farm
            Credit Administration that the bank does not intend to
            complete the merger described in the letter of intent;
     ''(II) the Farm Credit Administration determines that the Federal
            Intermediate Credit Bank of Jackson is not complying with
            any term or condition on which an extension under clause
            (i) was conditioned; or
     ''(III) the Farm Credit Administration determines that the Federal
            Intermediate Credit Bank of Jackson is not pursuing in good
            faith the merger provided for in the letter of intent.
         If the Farm Credit Administration issues an order under
          subparagraph (D) pursuant to this clause, the Federal
          Intermediate Credit Bank of Jackson shall be deemed to have
          failed to comply with the requirements of subparagraph (A).
          ''(D) Failure to merge; issuance of order. - If the Federal
        Intermediate Credit Bank of Jackson fails to comply, or
        notifies the Farm Credit Administration in writing that it does
        not intend to comply, with the requirements of subparagraph
        (A), the Farm Credit Administration shall, within 5 days after
        the date specified in subparagraph (A), or such other date
        specified by the Farm Credit Administration under subparagraph
        (C), issue, notwithstanding any other provision of law, an
        order requiring the Federal Intermediate Credit Bank of Jackson
        to merge with the Farm Credit Bank of Texas in accordance with
        paragraph (2).
        ''(2) Arbitrated merger. -
          ''(A) In general. - Not later than 30 days after the issuance
        of an order by the Farm Credit Administration under paragraph
        (1)(D), an arbitrator (or panel of arbitrators) shall be named
        by the American Arbitration Association in accordance with the
        Commercial Arbitration Rules of the American Arbitration
        Association to serve as the arbitrator referred to in this
        paragraph.
          ''(B) Duties. - The arbitrator shall determine the terms and
        conditions of the merger required under an order issued under
        paragraph (1)(D), such that the terms and conditions are fair
        and equitable to the two banks, their affiliated associations,
        the stockholders and borrowers of the associations, and the
        other institutions of the Farm Credit System, and are designed
        to protect or enhance the safety and soundness of the Farm
        Credit System. The arbitrator shall have the authority to hire
        staff and secure the services of consultants as necessary to
        discharge the duties of the arbitrator under this paragraph.
          ''(C) Expenses. - Notwithstanding any other provision of law,
        the compensation and expenses of the arbitrator, the fees and
        expenses of the American Arbitration Association, and any
        expenses associated with the referendum required under
        subparagraph (F) shall be paid from the Farm Credit Assistance
        Fund established under section 6.25 of the Farm Credit Act of
        1971 (12 U.S.C. 2278b-5).
          ''(D) Development of merger plans. -
            ''(i) In general. - Not later than 100 days after the
          issuance of an order by the Farm Credit Administration under
          paragraph (1)(D), the arbitrator shall develop and submit for
          certification to the Farm Credit Administration a plan
          specifying the terms and conditions of the merger of the two
          banks required under this paragraph, such that the terms and
          conditions are fair and equitable to the two banks, their
          affiliated associations, the stockholders or farmer-borrowers
          of the associations, and the other institutions of the Farm
          Credit System, and are designed to protect or enhance the
          safety and soundness of the Farm Credit System. In devising
          the plan, the arbitrator shall, to the extent practicable,
          achieve the following objectives:
     ''(I) Implementation of the preferences expressed by the affected
            and interested parties in submissions under clause (ii).
     ''(II) Valuation of assets fairly, equitably, and consistently for
            all parties involved.
     ''(III) Establishment of capitalization and funding terms in a
            manner that treats farmer-borrowers and stockholders in the
            two involved farm credit districts equitably and takes
            account of risk.
     ''(IV) Ensure the viability of the resulting Farm Credit Bank and
            associations of the bank and the ability of the resulting
            bank and associations of the bank to lend to eligible
            borrowers at reasonable and competitive rates of interest.
            ''(ii) Submission of views and information. - The
          arbitrator shall receive from affected and interested parties
          written submissions, in accordance with fair and reasonable
          procedures established by the arbitrator, regarding the terms
          and conditions of an appropriate plan for the merger of the
          two banks required under this paragraph.  The Federal
          Intermediate Credit Bank of Jackson, the Farm Credit Bank of
          Texas, and their affiliated associations shall make available
          all books, records, financial information, and other material
          that the arbitrator determines is necessary to the
          development of the plan or the fulfillment of any other
          requirement under this paragraph.  A copy of any submission
          or information provided to the arbitrator by any party under
          this paragraph shall be furnished to the Federal Intermediate
          Credit Bank of Jackson or the Farm Credit Bank of Texas on
          the written request of the bank and at the bank's expense.
          The arbitrator shall provide both banks with a reasonable
          opportunity to review and respond to any submission or
          information provided by any party.
            ''(iii) Content of plan; farm credit bank. - The plan
          developed and submitted under clause (i) shall include
          provisions regarding the following matters:
     ''(I) The initial composition, following the merger, of the board
            of directors of the resulting Farm Credit Bank (which shall
            be subject to change thereafter in accordance with the Farm
            Credit Act of 1971 (12 U.S.C. 2001 et seq.) and any
            applicable regulations).
     ''(II) The valuation, for purposes of the merger, of the assets
            and liabilities of the merging banks.
     ''(III) The terms and conditions on which the shares of capital
            stock of the Federal Intermediate Credit Bank of Jackson
            and, if necessary, the Farm Credit Bank of Texas, will be
            converted into shares of the resulting Farm Credit Bank.
     ''(IV) The capital structure and capitalization levels of the
            resulting Farm Credit Bank and the affiliated associations
            of the Farm Credit Bank in the States of Alabama,
            Louisiana, and Mississippi as the arbitrator determines
            necessary to carry out the purposes of this paragraph
            (which shall be subject to change thereafter in accordance
            with the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.)
            and any applicable regulations).
     ''(V) The terms of financing agreements between any production
            credit associations or agricultural credit associations
            described in clause (iv), and the resulting Farm Credit
            Bank (which shall be subject to change thereafter in
            accordance with the Farm Credit Act of 1971 (12 U.S.C. 2001
            et seq.) and any applicable regulations).
     ''(VI) Any other terms and conditions or other matters that the
            arbitrator considers necessary.
            ''(iv) Content of plan; agricultural credit associations. -
          If the arbitrator determines that the chartering of
          agricultural credit associations in the States of Alabama,
          Louisiana, and Mississippi will be in the best interests of
          the farmers, ranchers, and aquatic producers eligible to
          borrow from Farm Credit System associations, the plan
          required under this subparagraph shall also include, based on
          submissions from the Federal Intermediate Credit Bank of
          Jackson and the Farm Credit Bank of Texas, provisions for the
          establishment of agricultural credit associations to operate
          in the States, subject to approval in the referendum under
          subparagraph (F). Such provisions shall include provisions
          regarding the following matters:
     ''(I) A proposal for the establishment of an agricultural credit
            association in each of the geographic areas specified in
            subparagraph (F)(iii) (the charters of which, if validly
            issued under subparagraph (G)(i) pursuant to approval in
            the referendum under subparagraph (F), shall be subject to
            change thereafter in accordance with the Farm Credit Act of
            1971 (12 U.S.C. 2001 et seq.) and any applicable
            regulations).
     ''(II) The initial composition, if the proposal for the
            establishment of agricultural credit associations is
            approved, of the board of directors of each such
            agricultural credit association (which shall be subject to
            change thereafter in accordance with the Farm Credit Act of
            1971 (12 U.S.C. 2001 et seq.) and any applicable
            regulations).
     ''(III) The valuation, for purposes of the proposed merger of the
            production credit association and the Federal land bank
            association in each of the geographic areas specified in
            subparagraph (F)(iii), of the assets and liabilities of the
            associations.
     ''(IV) The terms and conditions on which the shares of capital
            stock of any associations that may merge under the plan to
            form agricultural credit associations will be converted
            into shares of the resulting agricultural credit
            associations.
     ''(V) The capital structure and capitalization levels of the
            resulting Farm Credit Bank and such affiliated associations
            of the Farm Credit Bank in the States of Alabama,
            Louisiana, and Mississippi as the arbitrator determines
            necessary to carry out the purposes of this paragraph
            (which capital structure and capitalization levels shall be
            subject to change thereafter in accordance with the Farm
            Credit Act of 1971 (12 U.S.C. 2001 et seq.) and any
            applicable regulations).
     ''(VI) The terms of financing agreements between any agricultural
            credit associations and the resulting Farm Credit Bank
            (which shall be subject to change thereafter in accordance
            with the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.)
            and any applicable regulations).
     ''(VII) Any other terms and conditions or other matters that the
            arbitrator considers necessary.
            ''(v) Consultation with insurance corporation. - The
          arbitrator shall consult with the Farm Credit System
          Insurance Corporation regarding the valuation of the assets
          and liabilities under the plan of merger, the capitalization
          of the Farm Credit System institutions resulting under the
          plan, and any other matters relevant to the assistance to be
          provided by the Insurance Corporation to facilitate the
          merger under subparagraph (H).
          ''(E) Certification of plan. - Not later than 30 days after
        the receipt of the plan developed by the arbitrator, the Farm
        Credit Administration shall -
            ''(i) certify; or
            ''(ii) recommend to the arbitrator revisions to the plan
          that, if incorporated into the plan, will allow the Farm
          Credit Administration to certify,
     that the resulting bank and any resulting associations are
        proposed to be organized in such a fashion that they will, on
        implementation of the plan, operate in compliance with
        applicable laws and regulations.  The arbitrator and the Farm
        Credit Administration shall work cooperatively to ensure the
        expeditious issuance of the certification.  If the Farm Credit
        Administration recommends to the arbitrator revisions to the
        plan that, if incorporated into the plan, will allow the Farm
        Credit Administration to certify the plan, the arbitrator
        shall, not later than 15 days after receipt of the recommended
        revisions, incorporate the revisions into the plan as the
        arbitrator deems appropriate to secure the certification.
          ''(F) Referendum on association structure. -
            ''(i) In general. - Not later than 170 days after the
          issuance of an order by the Farm Credit Administration under
          paragraph (1)(D), the American Arbitration Association shall
          conduct, and compile and forward to the Farm Credit
          Administration the results of, a vote of current
          farmer-borrowers of the production credit associations and
          the Federal land bank associations in the States of Alabama,
          Louisiana, and Mississippi, in accordance with the Election
          Rules of the American Arbitration Association, to determine
          whether the farmer-borrowers of each association in the
          geographic areas described in clause (iii) prefer to have
          credit delivered -
     ''(I) in the case of production credit association
            farmer-borrowers, through a production credit association
            or through an agricultural credit association as proposed
            in the plan; and
     ''(II) in the case of Federal land bank association
            farmer-borrowers, through a Federal land bank association
            or through an agricultural credit association as proposed
            in the plan.
         Each farmer-borrower shall be entitled to one vote.  The
          arbitrator shall establish record dates and other procedures
          for conducting the referendum.  The Federal Intermediate
          Credit Bank of Jackson, the Farm Credit Bank of Texas, and
          their affiliated associations shall cooperate in the conduct
          of the referendum, as determined necessary by the Arbitrator.
            ''(ii) Disclosure. - The arbitrator shall send to
          farmer-borrowers eligible to vote under this subparagraph,
          with their ballot, a statement describing the potential
          consequences to the farmer-borrowers, and to the associations
          from which they borrow, of voting to charter an agricultural
          credit association and setting forth factors that
          farmer-borrowers should consider relevant to the choice
          between credit delivery through the current association
          structure and the chartering of an agricultural credit
          association.  The arbitrator shall develop the disclosure
          materials in cooperation with the Farm Credit Administration
          and ensure that the materials are not inconsistent with
          applicable laws and regulations.
            ''(iii) Tabulation of results. - The results of the vote
          under this subparagraph shall be compiled separately for
          production credit association farmer-borrowers and Federal
          land bank association farmer-borrowers in each of the
          following seven geographic areas:
     ''(I) The area served by the Federal Land Bank Association of
            South Mississippi.
     ''(II) The area served by the Federal Land Bank Association of
            North Mississippi.
     ''(III) The area served by the Federal Land Bank Association of
            South Alabama.
     ''(IV) The area served by the Federal Land Bank Association of
            North Alabama.
     ''(V) The area served by the Federal Land Bank Association of
            South Louisiana.
     ''(VI) The area served by both the Federal Land Bank Association
            of North Louisiana and the First South Production Credit
            Association.
     ''(VII) The area served by both the Federal Land Bank Association
            of North Louisiana and the Northwest Louisiana Production
            Credit Association.
            ''(iv) Publication of results. - The results of the vote
          under this subparagraph, as tabulated by the American
          Arbitration Association, shall be made promptly available to
          the public in a manner determined appropriate by the Farm
          Credit Administration.
          ''(G) Implementation. - Not later than 10 days after the date
        of the receipt of the results of the referendum conducted under
        subparagraph (F), the Farm Credit Administration shall issue
        such charters or charter amendments and take such other
        regulatory actions as may be necessary to implement the merger
        or mergers as provided for under the certified plan.  In this
        regard, the Farm Credit Administration shall -
            ''(i) issue a charter or charter amendment and take any
          such other regulatory actions as may be necessary to provide
          for the establishment of an agricultural credit association
          in each of the geographic areas described in subparagraph
          (F)(iii) where a majority of the farmer-borrowers of both the
          production credit association and the Federal land bank
          association voted under subparagraph (F)(i) that they
          preferred to have credit delivered through an agricultural
          credit association (which charter shall be subject to change
          thereafter in accordance with the Farm Credit Act of 1971 (12
          U.S.C. 2001 et seq.) and any applicable regulations); and
            ''(ii) not issue a charter or charter amendment or take any
          such other regulatory action to provide for the establishment
          of an agricultural credit association in any of the
          geographic areas described in subparagraph (F)(iii) where
          less than a majority of the farmer-borrowers of the
          production credit association or the Federal land bank
          association voted in the referendum under subparagraph (F)(i)
          that they preferred to have credit delivered through an
          agricultural credit association (provided that the charter of
          any remaining association in such geographic area shall be
          subject to change thereafter in accordance with the Farm
          Credit Act of 1971 (12 U.S.C. 2001 et seq.) and any
          applicable regulations).
          ''(H) Facilitation. -
            ''(i) In general. - Beginning on the date of the issuance
          of an order by the Farm Credit Administration under paragraph
          (1)(D), the Farm Credit System Insurance Corporation shall
          expend amounts from the Farm Credit Insurance Fund to the
          extent necessary to facilitate the merger prescribed in the
          plan.
            ''(ii) Maintenance of book value. - Assistance provided by
          the Corporation under this subparagraph shall be in amounts
          not to exceed that required to maintain book value per share
          of stockholders' equity at the same value reflected on the
          most recent audited financial statements of the Federal
          Intermediate Credit Bank of Jackson and the Farm Credit Bank
          of Texas prior to or effective with the date of the merger.
            ''(iii) Other assistance. - Until the expiration of 5 years
          from the effective date of a merger authorized by this
          subsection, or the final resolution of any litigation against
          the Federal Intermediate Credit Bank of Jackson or any of its
          stockholders pending on the date of the enactment of this
          subsection (Oct. 28, 1992), whichever is later, the
          Corporation shall guarantee prompt payment of any loss
          experienced by the merged bank, which loss is caused by the
          failure of any association-stockholder of the merged bank
          that was a stockholder of the Federal Intermediate Credit
          Bank of Jackson immediately prior to the merger, or any
          successor to the association, to pay when due any obligation
          of principal or interest owed by the association or its
          successor to the resulting bank.
            ''(iv) Terms and conditions. - Assistance provided by the
          Corporation under this subparagraph shall be on such terms
          and conditions as the Corporation deems appropriate to
          facilitate the merger.
          ''(I) Safety and soundness. -
            ''(i) In general. - Except as provided in clause (ii), if
          at any time prior to the completion of the merger required
          under this subsection the Farm Credit Administration
          determines that the Federal Intermediate Credit Bank of
          Jackson is being operated in an unsafe or unsound manner (as
          determined in accordance with the Farm Credit Act of 1971 (12
          U.S.C. 2001 et seq.)), the Farm Credit Administration, after
          consultation with the respective boards of directors of the
          affected banks and taking into consideration the purposes of
          this subsection, may require the Federal Intermediate Credit
          Bank of Jackson to merge with a Farm Credit Bank, subject to
          such terms and conditions as the Farm Credit Administration
          may prescribe.  The Farm Credit System Insurance Corporation
          shall expend amounts in the Farm Credit Insurance Fund to the
          extent necessary to facilitate the merger prescribed under
          this subparagraph, including the provision of assistance as
          provided in section 5.61(a)(2)(A)(iii) of the Farm Credit Act
          of 1971 (12 U.S.C. 2277a-10(a)(2)(A)(iii)), on such terms and
          conditions as the Corporation deems appropriate.
            ''(ii) Arbitrated merger. - If at any time after the Farm
          Credit Administration issues an order under paragraph (1)(D),
          but prior to the completion of the merger required under this
          subsection, the Farm Credit Administration determines that
          the Federal Intermediate Credit Bank of Jackson is being
          operated in an unsafe or unsound manner (as determined in
          accordance with the Farm Credit Act of 1971 (12 U.S.C. 2001
          et seq.)), the Farm Credit Administration shall, after
          consultation with the boards of directors of the Federal
          Intermediate Credit Bank of Jackson and the Farm Credit Bank
          of Texas, take such action as it deems necessary pursuant to
          the authorities provided under the Farm Credit Act of 1971
          (12 U.S.C. 2001 et seq.) to return the operation of the
          Federal Intermediate Credit Bank of Jackson to a safe and
          sound condition, pending the completion of the merger under
          paragraph (2).
          ''(J) Merger plan for agricultural credit associations. - In
        any of the States of Alabama, Louisiana, or Mississippi where
        all of the associations are chartered as agricultural credit
        associations, the boards of directors of each such association
        in each State are encouraged to submit to the farmer-borrowers
        of each such association for their approval a plan for merging
        the associations into one statewide agricultural credit
        association, in accordance with the applicable provisions of
        the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.).
          ''(K) Definitions. - As used in this paragraph:
            ''(i) Agricultural credit association. - The term
          'agricultural credit association' means an association having
          the same authorities, attributes, and obligations as, and for
          all purposes an agricultural credit association resulting
          from the implementation of the plan under this paragraph
          shall be deemed to be, an association resulting from the
          merger of a production credit association and a Federal land
          bank association under section 7.8 of the Farm Credit Act of
          1971 (12 U.S.C. 2279c-1).
            ''(ii) Farmer-borrower. - The term 'farmer-borrower' means
          a borrower from a Farm Credit System association in the State
          of Alabama, Louisiana, or Mississippi who holds voting stock,
          or is eligible to hold voting stock, in the association or a
          stockholder in any such association.
        ''(3) Review. -
          ''(A) In general. - Actions and determinations of the
        arbitrator, the Farm Credit Administration, or the Farm Credit
        System Insurance Corporation pursuant to this subsection shall
        not be subject to judicial review except as provided in this
        paragraph, nor shall they be subject to the requirements of
        subchapter II of chapter 5 or chapter 7 of title 5, United
        States Code.
          ''(B) Agency determinations. -
            ''(i) In general. - Any petition for review of a
          determination or other action of the Farm Credit
          Administration or the Farm Credit System Insurance
          Corporation under this subsection shall be filed in the
          United States Court of Appeals for the District of Columbia
          Circuit not later than 10 days after the determination, or
          the petition shall be barred.  The court shall have exclusive
          jurisdiction to determine the proceeding in accordance with
          standard procedures as supplemented by procedures hereinafter
          provided and no other district court or court of appeals of
          the United States shall have jurisdiction over any such
          challenge in any proceeding instituted prior to, on, or after
          the date of enactment of this subsection.  The review of any
          determination or action of the Farm Credit Administration or
          the Farm Credit System Insurance Corporation under this
          subsection shall be based on the examination of all of the
          information before the Farm Credit Administration or the Farm
          Credit System Insurance Corporation, as the case may be, at
          the time the determination was made.  The court reviewing the
          determination or action shall not enter a stay or order of
          mandamus unless the court has determined, after notice and a
          hearing before a panel of the court, that the agency action
          complained of was arbitrary, capricious, an abuse of
          discretion, or otherwise not in accordance with law.
            ''(ii) Procedures. - Notwithstanding any other provision of
          law, the court may set rules governing the procedures of any
          such proceeding that set page limits on briefs and time
          limits for filing briefs and motions and other actions that
          are shorter than the limits specified in the Federal Rules of
          Civil or Appellate Procedure.
            ''(iii) Expedited review. - Any such proceeding before the
          court shall be assigned for hearing and completed at the
          earliest possible date, and shall be expedited in every way.
          The court shall render its final decision relative to any
          challenge not later than 50 days from the date the challenge
          is brought unless the court determines that a longer period
          of time is required to satisfy the requirements of the
          Constitution.
          ''(C) Arbitrator determinations. -
            ''(i) In general. - Except as otherwise provided in this
          paragraph, any petition for review of a determination or
          other action of the arbitrator named under paragraph (2)
          shall be filed in accordance with the United States
          Arbitration Act (9 U.S.C. 1 et seq.).  Such Act shall apply
          to the arbitration conducted pursuant to paragraph (2) to the
          same extent as if the arbitration were established in a
          contract evidencing a transaction in commerce between the
          Federal Intermediate Credit Bank of Jackson and the Farm
          Credit Bank of Texas.
            ''(ii) Procedures. - Notwithstanding the United States
          Arbitration Act (9 U.S.C. 1 et seq.), any petition for review
          of a determination or other action of the arbitrator under
          this subsection shall be filed not later than 10 days after
          the determination, or the petition shall be barred.  The
          court specified under such Act shall have exclusive
          jurisdiction to determine the proceeding in accordance with
          the applicable procedures under such Act, as supplemented by
          procedures hereinafter provided, and no other district court
          shall have jurisdiction over any such challenge in any such
          proceeding.  Notwithstanding any other provision of law, the
          court may set rules governing the procedures of any such
          proceeding that set page limits on briefs and time limits for
          filing briefs and motions and other actions that are shorter
          than the limits specified in the United States Arbitration
          Act or the Federal Rules of Civil or Appellate Procedure (28
          App. U.S.C.).
            ''(iii) Expedited review. - Any such proceeding before the
          court shall be assigned for hearing and completed at the
          earliest possible date, and shall be expedited in every way.
          The court shall render its final decision relative to any
          challenge as soon as possible in accordance with the United
          States Arbitration Act (9 U.S.C. 1 et seq.), or not later
          than 30 days from the date the challenge is brought,
          whichever is sooner, unless the court determines that a
          longer period of time is required to satisfy the requirements
          of the Constitution.''
 
-CITE-
    12 USC Sec. 2012                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER I - FARM CREDIT BANKS
 
-HEAD-
    Sec. 2012. Board of directors
 
-STATUTE-
      Each Farm Credit Bank shall elect a board of directors of such
    number, for such term, in such manner, and with such
    qualifications, as may be required in its bylaws, except that, at
    least one member shall be elected by the other directors, which
    member shall not be a director, officer, employee, or stockholder
    of a System institution.
 
-SOURCE-
    (Pub. L. 92-181, title I, Sec. 1.4, as added Pub. L. 100-233, title
    IV, Sec. 401, Jan. 6, 1988, 101 Stat. 1622; amended Pub. L.
    100-399, title IV, Sec. 401(c), Aug. 17, 1988, 102 Stat. 995.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 2012, Pub. L. 92-181, title I, Sec. 1.4, Dec. 10,
    1971, 85 Stat. 584; Pub. L. 96-592, title I, Sec. 101, Dec. 24,
    1980, 94 Stat. 3437; Pub. L. 99-205, title II, Sec. 205(d)(1), Dec.
    23, 1985, 99 Stat. 1703; Pub. L. 100-233, title VII, Sec. 705(a),
    title VIII, Sec. 802(b), Jan. 6, 1988, 101 Stat. 1706, 1710; Pub.
    L. 100-399, title VI, Sec. 604, Aug. 17, 1988, 102 Stat. 1006,
    related to corporate existence and general corporate powers, prior
    to the general amendment of this subchapter by Pub. L. 100-233,
    Sec. 401.
                                 AMENDMENTS
      1988 - Pub. L. 100-399 struck out ''from its voting
    stockholders'' after ''shall elect''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective immediately after
    amendment made by section 401 of Pub. L. 100-233, which was
    effective 6 months after Jan. 6, 1988, see section 1001(b) of Pub.
    L. 100-399, set out as a note under section 2002 of this title.
 
-CITE-
    12 USC Sec. 2013                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER I - FARM CREDIT BANKS
 
-HEAD-
    Sec. 2013. General corporate powers
 
-STATUTE-
      Each Farm Credit Bank shall be a body corporate and, subject to
    regulation by the Farm Credit Administration, shall have power to -
        (1) adopt and use a corporate seal;
        (2) have succession until dissolved under the provisions of
      this chapter or other Act of Congress;
        (3) make contracts;
        (4) sue and be sued;
        (5) acquire, hold, dispose, and otherwise exercise all the
      usual incidents of ownership of real and personal property
      necessary or convenient to its business;
        (6) make, participate in, and discount loans, make commitments
      for credit, accept advance payments, and provide services as
      authorized in this chapter, and charge fees for such;
        (7) operate under the direction of its board of directors;
        (8) provide by its board of directors for a president, one or
      more vice presidents, a secretary, a treasurer, and provide for
      such other officers, employees, and agents as may be necessary,
      as provided in this chapter, define their duties, and require
      surety bonds or make other provision against losses occasioned by
      employees;
        (9) prescribe, by its board of directors, its bylaws that shall
      be consistent with law, and that shall provide for -
          (A) the classes of its stock and the manner in which such
        stock shall be issued, transferred, and retired; and
          (B) the manner in which it is to -
            (i) select officers, employees, and agents;
            (ii) acquire, hold, and transfer property;
            (iii) make loans and discounts;
            (iv) conduct general business; and
            (v) exercise and enjoy the privileges granted to it by law;
        (10) borrow money and issue notes, bonds, debentures, or other
      obligations individually, or in concert with one or more other
      banks of the System, of such character, terms, conditions, and
      rates of interest as may be determined as provided for in this
      chapter;
        (11) purchase nonvoting stock in, or pay in surplus to, and
      accept deposits of securities or funds from associations in its
      district, and pay interest on such funds;
        (12) participate with -
          (A) one or more other Farm Credit Banks in loans under this
        subchapter on such terms as may be agreed on among such banks;
          (B) one or more other Farm Credit System institutions in
        loans made under this subchapter or other subchapters of this
        chapter on the basis prescribed in section 2206 of this title;
        and
          (C) lenders that are not Farm Credit System institutions in
        loans that the bank is authorized to make under this
        subchapter;
        (13) approve the salary scale of the officers and employees of
      the associations in its district and supervise the exercise by
      such associations of the functions vested in or delegated to
      them;
        (14) deposit the securities and current funds of the bank with
      any member bank of the Federal Reserve System or any insured
      State nonmember bank (within the meaning of section 1813 of this
      title) and pay fees and receive interest on such as may be
      agreed, and when designated for that purpose by the Secretary of
      the Treasury, such bank -
          (A) shall be a depository of public money, except receipts
        from customs, under such regulations as may be prescribed by
        the Secretary;
          (B) may be employed as a fiscal agent of the Government; and
          (C) shall perform all such reasonable duties as a depository
        of public money or financial agent of the Government as may be
        required of such bank;
      except that no Government funds deposited under the provisions of
      this paragraph shall be invested in loans or bonds or other
      obligations of the bank;
        (15) buy and sell obligations of, or insured by, the United
      States or any agency thereof, or securities backed by the full
      faith and credit of any such agency, and make other investments
      as may be authorized under regulations issued by the Farm Credit
      Administration;
        (16) sell to lenders that are not Farm Credit System
      institutions interests in loans, and buy from and sell to Farm
      Credit System institutions interests in loans and other
      extensions of credit, and nonvoting stock as may be authorized
      under regulations issued by the Farm Credit Administration;
        (17) conduct studies and make and adopt standards for lending;
        (18) delegate to associations such functions as the bank
      determines appropriate;
        (19) amend and modify loan contracts, documents, and payment
      schedules, and release, subordinate, or substitute security for
      any of such items;
        (20) for loans made by the bank, require associations to
      endorse notes and other obligations of borrowers from the bank;
        (21) exercise through the board of directors or authorized
      officers, employees, or agents of the bank, all such incidental
      powers as may be necessary or expedient to carry on the business
      of the bank;
        (22) accept contributions to the capital of the bank from
      associations and account for such in accordance with generally
      accepted accounting principles, except as may be authorized by
      the Farm Credit Administration;
        (23) as may be authorized by the board of directors of the
      bank, agree with other Farm Credit System institutions to share
      loan and other losses, whether to protect against capital
      impairment or for any other purpose; and
        (24) operate as an originator and become certified as a
      certified facility under subchapter VIII of this chapter.
 
-SOURCE-
    (Pub. L. 92-181, title I, Sec. 1.5, as added Pub. L. 100-233, title
    IV, Sec. 401, Jan. 6, 1988, 101 Stat. 1623; amended Pub. L.
    100-399, title IV, Sec. 401(d), Aug. 17, 1988, 102 Stat. 995; Pub.
    L. 104-105, title II, Sec. 201, Feb. 10, 1996, 110 Stat. 172.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 2013, Pub. L. 92-181, title I, Sec. 1.5, Dec. 10,
    1971, 85 Stat. 585; Pub. L. 96-592, title I, Sec. 102, Dec. 24,
    1980, 94 Stat. 3437; Pub. L. 99-205, title II, Sec. 205(d)(2), (3),
    title VI, Sec. 601, Dec. 23, 1985, 99 Stat. 1703, 1711; Pub. L.
    100-233, title VIII, Sec. 802(c), Jan. 6, 1988, 101 Stat. 1710,
    related to land bank stock, prior to the general amendment of this
    subchapter by Pub. L. 100-233, Sec. 401.
                                 AMENDMENTS
      1996 - Par. (13). Pub. L. 104-105 struck out '', and the
    appointment and compensation of the chief executive officer
    thereof,'' after ''in its district''.
      1988 - Par. (9). Pub. L. 100-399, Sec. 401(d)(1), amended par.
    (9) generally.  Prior to amendment, par. (9) read as follows:
    ''prescribe by its board of directors -
        ''(A) the bylaws of such bank that shall not be inconsistent
      with law, providing for the classes of the stock of the bank and
      the manner in which such stock shall be issued, transferred, and
      retired;
        ''(B) the officers, employees, and agents of the bank as
      provided for;
        ''(C) the property of the bank acquired, held, and transferred;
        ''(D) the loans and discounts made by the bank;
        ''(E) the general business conducted by the bank; and
        ''(F) the privileges granted to the bank by law exercised and
      enjoyed;''.
      Par. (11). Pub. L. 100-399, Sec. 401(d)(2), substituted ''of
    securities or'' for ''or securities of''.
      Par. (12)(B), (C). Pub. L. 100-399, Sec. 401(d)(3), struck out
    ''participate with'' before ''one or more'' in subpar. (B) and
    ''participate with'' before ''lenders that'' in subpar. (C).
      Par. (14). Pub. L. 100-399, Sec. 401(d)(4), substituted ''(within
    the meaning of section 1813 of this title)'' for ''as defined in
    section 1813 of this title''.
      Par. (18). Pub. L. 100-399, Sec. 401(d)(5), struck out ''Federal
    land bank'' after ''delegate to''.
      Par. (22). Pub. L. 100-399, Sec. 401(d)(6), substituted ''in
    accordance with generally accepted accounting principles, except as
    may be authorized by the Farm Credit Administration;'' for ''as
    authorized by the Farm Credit Administration; and''.
      Par. (23). Pub. L. 100-399, Sec. 401(d)(7), struck out ''and
    approved by the Farm Credit Administration Board'' after ''of the
    bank'' and substituted ''purpose; and'' for ''purpose.''
      Par. (24). Pub. L. 100-399, Sec. 401(d)(8), added par. (24).
                      EFFECTIVE DATE OF 1996 AMENDMENT
      Section 302 of Pub. L. 104-105 provided that: ''Except as
    otherwise provided in this Act, this Act (see Short Title of 1996
    Amendment note set out under section 2001 of this title) and the
    amendments made by this Act shall become effective on the date of
    enactment (Feb. 10, 1996).''
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective immediately after
    amendment made by section 401 of Pub. L. 100-233, which was
    effective 6 months after Jan. 6, 1988, see section 1001(b) of Pub.
    L. 100-399, set out as a note under section 2002 of this title.
 
-CITE-
    12 USC Sec. 2014                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER I - FARM CREDIT BANKS
 
-HEAD-
    Sec. 2014. Farm Credit Bank capitalization
 
-STATUTE-
      In accordance with section 2154a of this title, the Farm Credit
    Banks shall provide, through bylaws and subject to Farm Credit
    Administration regulations, for the capitalization of the bank and
    the manner in which bank stock shall be issued, held, transferred,
    and retired and bank earnings distributed.
 
-SOURCE-
    (Pub. L. 92-181, title I, Sec. 1.6, as added Pub. L. 100-233, title
    IV, Sec. 401, Jan. 6, 1988, 101 Stat. 1624.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 2014, Pub. L. 92-181, title I, Sec. 1.6, Dec. 10,
    1971, 85 Stat. 585; Pub. L. 96-592, title I, Sec. 103, Dec. 24,
    1980, 94 Stat. 3438, related to real estate mortgage loans, prior
    to the general amendment of this subchapter by Pub. L. 100-233,
    Sec. 401.
 
-CITE-
    12 USC Sec. 2015                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER I - FARM CREDIT BANKS
 
-HEAD-
    Sec. 2015. Lending authority
 
-STATUTE-
    (a) Real estate loans and related assistance
      (1) Real estate loans
        The Farm Credit Banks may make or participate with other
      lenders in long-term real estate mortgage loans in rural areas,
      as defined by the Farm Credit Administration, or to producers or
      harvesters of aquatic products, and make continuing commitments
      to make such loans under specified circumstances, for a term of
      not less than 5 nor more than 40 years.
      (2) Financial assistance
        The Farm Credit Banks may provide and extend financial
      assistance to, and discount for, or purchase from, a Federal land
      bank association any note, draft, or other obligation with the
      endorsement or guarantee of the association, the proceeds of
      which have been advanced to persons eligible and for purposes of
      financing by the association, as authorized under section
      2279b(a) of this title.
    (b) Intermediate credit
      (1) In general
        The Farm Credit Banks are authorized to make loans and extend
      other similar financial assistance to and to discount for or
      purchase from -
          (A) any production credit association, or
          (B) any national bank, State bank, trust company,
        agricultural credit corporation, incorporated livestock loan
        company, savings institution, credit union, or any association
        of agricultural producers engaged in the making of loans to
        farmers and ranchers, and any corporation engaged in the making
        of loans to producers or harvesters of aquatic products,
      any note, draft, or other obligation with the institution's
      endorsement or guarantee, the proceeds of which note, draft, or
      other obligation have been advanced to persons and for purposes
      eligible for financing by production credit associations as
      authorized by this chapter.
      (2) Participation with other entities
        The Farm Credit Banks may participate with one or more
      production credit associations or other Farm Credit Banks in the
      making of loans to eligible borrowers and may participate with
      one or more other Farm Credit System institutions in loans made
      under this subchapter or other subchapters of this chapter on the
      basis prescribed in section 2206 of this title.
      (3) Limitations on extension of financial services
        (A) General rule
          No paper shall be purchased from or discounted for, and no
        loans shall be made or other similar financial assistance
        extended by a Farm Credit Bank to any entity identified in
        paragraph (1)(B) of this subsection if the amount of such paper
        added to the aggregate liabilities of such entity, whether
        direct or contingent (other than bona fide deposit
        liabilities), exceeds ten times the paid-in and unimpaired
        capital and surplus of such entity or the amount of such
        liabilities permitted under the laws of the jurisdiction
        creating such institution, whichever is the lesser.
        (B) Limitation on national bank
          It shall be unlawful for any national bank which is indebted
        to any Farm Credit Bank, on paper discounted or purchased under
        paragraph (1), to incur any additional indebtedness, if by
        virtue of such additional indebtedness its aggregate
        liabilities direct or contingent, will exceed the limitation
        described in subparagraph (A).
      (4) FCA regulations
        (A) In general
          All of the loans, financial assistance, discounts and
        purchases authorized by this subsection shall be subject to
        regulations of the Farm Credit Administration and shall be
        secured by collateral, if any, as may be required in such
        regulations.
        (B) Requirement of regulations
          The regulations shall assure that such loans, financial
        assistance, discounts, and purchases are available on a
        reasonable basis to any financing institution authorized to
        receive such services under paragraph (1)(B) of this
        subsection, and that -
            (i) is significantly involved in lending for agricultural
          or aquatic purposes;
            (ii) demonstrates a continuing need for supplementary
          sources of funds to meet the credit requirements of its
          agricultural or aquatic borrowers;
            (iii) has limited access to national or regional capital
          markets; and
            (iv) does not use such services to expand its financing
          activities to persons and for purposes other than those
          authorized under subchapter II of this chapter.
        (C) Fees
          The regulations may authorize a Farm Credit Bank to charge
        reasonable fees for any commitment to extend service under this
        section to such a financing institution.
        (D) Subsidiaries and affiliates
          For purposes of this subsection, a financing institution
        together with the subsidiaries and affiliates of such may be
        considered as one, but such determination to consider such
        institution together with the subsidiaries and affiliates of
        such as one shall be made in the first instance by the bank and
        in the event of a denial by the bank of its services to a
        financial institution, then by the Farm Credit Administration
        on a case-by-case basis with due regard to the total
        relationship of the financing institution, its subsidiaries,
        and affiliates.
      (5) Effective date
        Nothing in this section shall require termination of discount
      relationships in existence on December 24, 1980.
 
-SOURCE-
    (Pub. L. 92-181, title I, Sec. 1.7, as added Pub. L. 100-233, title
    IV, Sec. 401, Jan. 6, 1988, 101 Stat. 1625; amended Pub. L.
    100-399, title IV, Sec. 401(e), (f), Aug. 17, 1988, 102 Stat. 995,
    996.)
 
-COD-
                                CODIFICATION
      In subsec. (b)(5), ''December 24, 1980'' substituted for ''the
    effective date of the Farm Credit Act Amendments of 1980''.
 
-MISC3-
                              PRIOR PROVISIONS
      A prior section 2015, Pub. L. 92-181, title I, Sec. 1.7, Dec. 10,
    1971, 85 Stat. 585; Pub. L. 96-592, title I, Sec. 104, Dec. 24,
    1980, 94 Stat. 3438; Pub. L. 99-509, title I, Sec. 1033(a), Oct.
    21, 1986, 100 Stat. 1877, related to interest rates and other
    charges, prior to the general amendment of this subchapter by Pub.
    L. 100-233, Sec. 401.
                                 AMENDMENTS
      1988 - Subsec. (a). Pub. L. 100-399, Sec. 401(e), inserted in
    heading ''and related assistance'' and amended text generally.
    Prior to amendment, text read as follows: ''The Farm Credit Banks
    are authorized to make or participate with other lenders in
    long-term real estate mortgage loans in rural areas, as defined by
    the Farm Credit Administration, or to producers or harvesters of
    aquatic products, and make continuing commitments to make such
    loans under specified circumstances, for a term of not less than 5
    nor more than 40 years.''
      Subsec. (b)(2). Pub. L. 100-399, Sec. 401(f)(1), struck out
    provision that banks may own and lease or lease with an option to
    purchase to persons eligible for assistance under this subchapter,
    equipment needed in the operations of such persons.
      Subsec. (b)(3). Pub. L. 100-399, Sec. 401(f)(2), substituted in
    heading ''services'' for ''assistance'' and in subpar. (B)
    ''described in subparagraph (A)'' for ''herein contained''.
      Subsec. (b)(4)(A). Pub. L. 100-399, Sec. 401(f)(3), substituted
    ''subsection'' for ''section''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective immediately after
    amendment made by section 401 of Pub. L. 100-233, which was
    effective 6 months after Jan. 6, 1988, see section 1001(b) of Pub.
    L. 100-399, set out as a note under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2020, 2021, 2091, 2202a,
    2252, 2277a-4 of this title.
 
-CITE-
    12 USC Sec. 2016                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER I - FARM CREDIT BANKS
 
-HEAD-
    Sec. 2016. Interest rates and other charges
 
-STATUTE-
    (a) In general
      Loans and discounts made by a Farm Credit Bank shall bear such
    rate or rates of interest or discount, and be on such terms and
    conditions, as may be determined by the board of directors of the
    bank from time to time.
    (b) Setting rates and charges
      In setting rates and charges, it shall be the objective to
    provide the types of credit needed by eligible borrowers at the
    lowest reasonable costs on a sound business basis taking into
    consideration the cost of money to the bank, necessary reserve and
    expenses of the bank and associations, and providing services to
    members.  The loan documents or discounting and financing
    agreements, may provide for the interest rate or rates to vary from
    time to time during the repayment period of the loan or agreement.
 
-SOURCE-
    (Pub. L. 92-181, title I, Sec. 1.8, as added Pub. L. 100-233, title
    IV, Sec. 401, Jan. 6, 1988, 101 Stat. 1626; amended Pub. L.
    100-399, title IV, Sec. 401(g), Aug. 17, 1988, 102 Stat. 996.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 2016, Pub. L. 92-181, title I, Sec. 1.8, Dec. 10,
    1971, 85 Stat. 586; Pub. L. 96-592, title I, Sec. 105, Dec. 24,
    1980, 94 Stat. 3438, related to eligibility, prior to the general
    amendment of this subchapter by Pub. L. 100-233, Sec. 401.
                                 AMENDMENTS
      1988 - Subsec. (a). Pub. L. 100-399 substituted ''such rate or
    rates of interest or discount, and be'' for ''interest at a rate or
    rates, and''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective immediately after
    amendment made by section 401 of Pub. L. 100-233, which was
    effective 6 months after Jan. 6, 1988, see section 1001(b) of Pub.
    L. 100-399, set out as a note under section 2002 of this title.
 
-CITE-
    12 USC Sec. 2017                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER I - FARM CREDIT BANKS
 
-HEAD-
    Sec. 2017. Eligibility
 
-STATUTE-
      The credit and financial services authorized in this subchapter
    may be made available to persons who are or become stockholders or
    members of the bank or associations in the district, and who are -
        (1) bona fide farmers, ranchers, or producers or harvesters of
      aquatic products;
        (2) persons furnishing to farmers and ranchers farm-related
      services directly related to their on-farm operating needs; or
        (3) owners of rural homes.
 
-SOURCE-
    (Pub. L. 92-181, title I, Sec. 1.9, as added Pub. L. 100-233, title
    IV, Sec. 401, Jan. 6, 1988, 101 Stat. 1626.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 2017, Pub. L. 92-181, title I, Sec. 1.9, Dec. 10,
    1971, 85 Stat. 586; Pub. L. 96-592, title I, Sec. 106, Dec. 24,
    1980, 94 Stat. 3438; Pub. L. 100-233, title IV, Sec. 426, title
    VIII, Sec. 802(d), Jan. 6, 1988, 101 Stat. 1657, 1710; Pub. L.
    100-399, title IV, Sec. 412, title VII, Sec. 701, Aug. 17, 1988,
    102 Stat. 1004, 1006, related to security, prior to the general
    amendment of this subchapter by Pub. L. 100-233, Sec. 401.
 
-CITE-
    12 USC Sec. 2018                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER I - FARM CREDIT BANKS
 
-HEAD-
    Sec. 2018. Security; terms
 
-STATUTE-
    (a) Real estate loans
      (1) Maximum level of loans
        (A) In general
          Real estate mortgage loans originated by a Farm Credit Bank,
        or in which a Farm Credit Bank participates in with a lender
        that is not a System institution, shall not exceed 85 percent
        of the appraised value of the real estate security, except as
        provided for in subparagraphs (C) and (D).
        (B) Regulation
          The Farm Credit Administration may, by regulation, require
        that loans not exceed 75 percent of the appraised value of the
        real estate security.
        (C) Guaranteed loans
          If the loan is guaranteed by Federal, State, or other
        governmental agencies, the loan may not exceed 97 percent of
        the appraised value of the real estate security, as may be
        authorized under regulations of the Farm Credit Administration.
        (D) Private mortgage insurance
          A loan on which private mortgage insurance is obtained may
        exceed 85 percent of the appraised value of the real estate
        security to the extent that the loan amount in excess of such
        85 percent is covered by the insurance.
      (2) Security
        All loans originated or participated in by a bank under this
      section shall be secured by first liens on interests in real
      estate of such classes as may be prescribed by regulations of the
      Farm Credit Administration.
      (3) Value of security
        To adequately secure the loan, the value of security shall be
      determined by appraisal under standards prescribed by the bank in
      accordance with regulations of the Farm Credit Administration.
      (4) Additional security
        Additional security for any loan may be required by the bank to
      supplement real estate security.  Credit factors, other than the
      ratio between the amount of the loan and the security value,
      shall be given due consideration.
    (b) Intermediate credit
      Loans, other than real estate loans, and discounts made under the
    provisions of this subchapter shall be repayable in not more than 7
    years (15 years if made to producers or harvesters of aquatic
    products) from the time that such are made or discounted by the
    Farm Credit Bank, except that the Board of Directors, under
    regulations of the Farm Credit Administration, may approve policies
    permitting loans, advances, or discounts (other than those made to
    producers or harvesters of aquatic products) to be repayable in not
    more than 10 years from the time that such are made or discounted
    by such bank.
 
-SOURCE-
    (Pub. L. 92-181, title I, Sec. 1.10, as added Pub. L. 100-233,
    title IV, Sec. 401, Jan. 6, 1988, 101 Stat. 1627; amended Pub. L.
    100-399, title IV, Sec. 401(h), (i), Aug. 17, 1988, 102 Stat. 996;
    Pub. L. 104-105, title II, Sec. 202, 203, Feb. 10, 1996, 110 Stat.
    172.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 2018, Pub. L. 92-181, title I, Sec. 1.10, Dec.
    10, 1971, 85 Stat. 586; Pub. L. 96-592, title I, Sec. 107, Dec. 24,
    1980, 94 Stat. 3438, related to purposes, prior to the general
    amendment of this subchapter by Pub. L. 100-233, Sec. 401.
                                 AMENDMENTS
      1996 - Subsec. (a)(1)(A). Pub. L. 104-105, Sec. 202(b),
    substituted ''subparagraphs (C) and (D)'' for ''paragraphs (2) and
    (3)''.
      Subsec. (a)(1)(D). Pub. L. 104-105, Sec. 202(a), added subpar.
    (D).
      Subsec. (a)(5). Pub. L. 104-105, Sec. 203, struck out heading and
    text of par. (5). Text read as follows: ''Each Farm Credit Bank
    shall require a financial statement from each borrower at least
    once every 3 years, or during such shorter period of time as may be
    required under regulations of the Farm Credit Administration.''
      1988 - Subsec. (a)(2). Pub. L. 100-399, Sec. 401(h)(1),
    substituted ''prescribed by regulations of'' for ''approved by''.
      Subsec. (a)(3). Pub. L. 100-399, Sec. 401(h)(2), substituted
    ''under standards'' for ''under appraisal standards'' and ''in
    accordance with regulations of'' for ''and approved by''.
      Subsec. (b). Pub. L. 100-399, Sec. 401(i), substituted
    ''harvesters of aquatic products) from'' for ''harvester of aquatic
    products) from''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective immediately after
    amendment made by section 401 of Pub. L. 100-233, which was
    effective 6 months after Jan. 6, 1988, see section 1001(b) of Pub.
    L. 100-399, set out as a note under section 2002 of this title.
 
-CITE-
    12 USC Sec. 2019                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER I - FARM CREDIT BANKS
 
-HEAD-
    Sec. 2019. Purposes for extensions of credit
 
-STATUTE-
    (a) Agricultural or aquatic purposes
      (1) In general
        Loans made by a Farm Credit Bank to farmers, ranchers, and
      producers or harvesters of aquatic products may be for any
      agricultural or aquatic purpose and other credit needs of the
      applicant, including financing for basic processing and marketing
      directly related to the applicant's operations and those of other
      eligible farmers, ranchers, and producers or harvesters of
      aquatic products, except that the operations of the applicant
      shall supply some portion of the total processing or marketing
      for which financing is extended.
      (2) Limitation on loans for basic processing and marketing
          operations
        The aggregate of the financing provided by any Farm Credit Bank
      for basic processing and marketing directly related to the
      operations of farmers, ranchers, and producers or harvesters of
      aquatic products, if the operations of the applicant supply less
      than 20 percent of the total processing or marketing for which
      financing is extended, shall not exceed 15 percent of the total
      of all outstanding loans of such bank.
    (b) Rural housing financing
      (1) In general
        Loans and discounts may be made to rural residents for rural
      housing financing under regulations of the Farm Credit
      Administration.
      (2) Limitations
        Rural housing financed under this subchapter shall be for
      single-family, moderate-priced dwellings and their appurtenances
      not inconsistent with the general quality and standards of
      housing existing in, or planned or recommended for, the rural
      area where it is located, except that a Farm Credit Bank may not
      at any one time have a total amount of loans outstanding for such
      rural housing to persons other than farmers or ranchers in
      amounts exceeding 15 percent of the total of all loans
      outstanding in such bank.
      (3) Rural areas
        For rural housing purposes under this section the term ''rural
      areas'' shall not be defined to include any city or village
      having a population in excess of 2,500 inhabitants.
    (c) Farm-related services
      (1) In general
        Loans to persons furnishing farm-related services to farmers
      and ranchers directly related to their on-farm operating needs
      may be made for the necessary capital structures and equipment
      and initial working capital for such services.
      (2) Facilities
        The banks may own and lease, or lease with option to purchase,
      to persons eligible for credit under this subchapter or
      subchapter II of this chapter, equipment or facilities needed in
      the operations of such persons.
 
-SOURCE-
    (Pub. L. 92-181, title I, Sec. 1.11, as added Pub. L. 100-233,
    title IV, Sec. 401, Jan. 6, 1988, 101 Stat. 1627; amended Pub. L.
    100-399, title IV, Sec. 401(j), Aug. 17, 1988, 102 Stat. 996; Pub.
    L. 101-624, title XVIII, Sec. 1832(a), Nov. 28, 1990, 104 Stat.
    3832; Pub. L. 102-237, title V, Sec. 502(a), Dec. 13, 1991, 105
    Stat. 1868.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 2019, Pub. L. 92-181, title I, Sec. 1.11, Dec.
    10, 1971, 85 Stat. 586; Pub. L. 96-592, title I, Sec. 108, Dec. 24,
    1980, 94 Stat. 3438, related to services related to borrower's
    operations, prior to the general amendment of this subchapter by
    Pub. L. 100-233, Sec. 401.
                                 AMENDMENTS
      1991 - Subsec. (a). Pub. L. 102-237 made technical amendments to
    headings of subsec. (a) and pars. (1) and (2).
      1990 - Subsec. (a). Pub. L. 101-624 designated existing
    provisions as par. (1), inserted heading, substituted ''some
    portion'' for ''at least 20 percent, or such larger percent as may
    be required by the board of directors of the bank under regulations
    of the Farm Credit Administration,'', and added par. (2).
      1988 - Subsec. (c)(2). Pub. L. 100-399 substituted ''this
    subchapter or subchapter II of this chapter, equipment or
    facilities'' for ''this subchapter, facilities''.
                      EFFECTIVE DATE OF 1991 AMENDMENT
      Amendment by Pub. L. 102-237 effective as if included in the
    provision of the Food, Agriculture, Conservation, and Trade Act of
    1990, Pub. L. 101-624, to which the amendment relates, see section
    1101(b)(4) of Pub. L. 102-237, set out as a note under section 1421
    of Title 7, Agriculture.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective immediately after
    amendment made by section 401 of Pub. L. 100-233, which was
    effective 6 months after Jan. 6, 1988, see section 1001(b) of Pub.
    L. 100-399, set out as a note under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2206a of this title.
 
-CITE-
    12 USC Sec. 2020                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER I - FARM CREDIT BANKS
 
-HEAD-
    Sec. 2020. Related services
 
-STATUTE-
    (a) In general
      The Farm Credit Banks may provide technical assistance to
    borrowers, members, and applicants from the bank and associations
    in the district, including persons obligated on paper discounted by
    the bank, and may make available to them at their option such
    financial related services appropriate to their on-farm and aquatic
    operations as determined to be feasible by the board of directors
    of the bank, under regulations of the Farm Credit Administration.
    (b) Authority to pass along cost of insurance premiums
      Each Farm Credit Bank may assess each production credit
    association, other association making direct loans under the
    authority provided under section 2279b of this title, and other
    financing institution described in section 2015(b)(1)(B) of this
    title in the district in which the bank is located to cover the
    costs of making premium payments under part E of subchapter V of
    this chapter.  The assessment on any such association or other
    financing institution for any calendar year shall be computed on
    the same basis as is used to compute the premium payment and shall
    not exceed the sum of -
        (1) the annual average principal outstanding for such year on
      loans made by the association, or on loans made by the other
      financing institution and funded by or discounted with the Farm
      Credit Bank, that are in accrual status, excluding the guaranteed
      portions of government-guaranteed loans (as defined in section
      2277a-4(a)(3) of this title) provided for in paragraph (3),
      multiplied by 0.0015;
        (2) the annual average principal outstanding for such year on
      loans made by the association, or on loans made by the other
      financing institution and funded by or discounted with the Farm
      Credit Bank, that are in nonaccrual status, multiplied by 0.0025;
      and
        (3)(A) the annual average principal outstanding for such year
      on the guaranteed portions of Federal government-guaranteed loans
      (as so defined) made by the association, or by the other
      financing institution and funded by or discounted with the Farm
      Credit Bank, that are in accrual status, multiplied by 0.00015;
      and
        (B) the annual average principal outstanding for such year on
      the guaranteed portions of State government-guaranteed loans (as
      so defined) made by the association, or by the other financing
      institution and funded by or discounted with the Farm Credit
      Bank, that are in accrual status, multiplied by 0.0003.
 
-SOURCE-
    (Pub. L. 92-181, title I, Sec. 1.12, as added Pub. L. 100-233,
    title IV, Sec. 401, Jan. 6, 1988, 101 Stat. 1628; amended Pub. L.
    100-399, title IV, Sec. 401(k), Aug. 17, 1988, 102 Stat. 996; Pub.
    L. 101-220, Sec. 6(b)(1), (2), Dec. 12, 1989, 103 Stat. 1880; Pub.
    L. 104-105, title II, Sec. 215(a)(2)(C), Feb. 10, 1996, 110 Stat.
    176.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 2020, Pub. L. 92-181, title I, Sec. 1.12, Dec.
    10, 1971, 85 Stat. 586; Pub. L. 96-592, title I, Sec. 109, Dec. 24,
    1980, 94 Stat. 3439, related to loans through associations or
    agents, prior to the general amendment of this subchapter by Pub.
    L. 100-233, Sec. 401.
                                 AMENDMENTS
      1996 - Pub. L. 104-105, Sec. 215(a)(2)(C), which directed
    amendment of ''section 1.12(b)'', without specifying the name of
    the Act being amended, was executed to this section, which is
    section 112 of the Farm Credit Act of 1971, to reflect the probable
    intent of Congress.
      Subsec. (b)(1). Pub. L. 104-105, Sec. 215(a)(2)(C)(i), inserted
    ''(as defined in section 2277a-4(a)(3) of this title)'' after
    ''government-guaranteed loans''.
      Subsec. (b)(3). Pub. L. 104-105, Sec. 215(a)(2)(C)(i), inserted
    ''(as so defined)'' after ''government-guaranteed loans'' in
    subpars. (A) and (B).
      1989 - Subsec. (b). Pub. L. 101-220, Sec. 6(b)(1), inserted '',
    other association making direct loans under the authority provided
    under section 2279b of this title,'' after ''production credit
    association''.
      Subsec. (b)(1). Pub. L. 101-220, Sec. 6(b)(2)(A), inserted
    ''funded by or'' before ''discounted with'' and ''excluding the
    guaranteed portions of government-guaranteed loans provided for in
    paragraph (3),'' and struck out ''and'' after ''multiplied by
    0.0015;''.
      Subsec. (b)(2). Pub. L. 101-220, Sec. 6(b)(2)(B), inserted
    ''funded by or'' before ''discounted with'' and substituted
    ''0.0025; and'' for ''0.0025.''.
      Subsec. (b)(3). Pub. L. 101-220, Sec. 6(b)(2)(C), added par. (3).
      1988 - Subsec. (a). Pub. L. 100-399 designated existing provision
    as subsec. (a), inserted heading, substituted ''directors of the
    bank'' for ''directors of each district bank'', and added subsec.
    (b).
                      EFFECTIVE DATE OF 1989 AMENDMENT
      Section 6(c) of Pub. L. 101-220 provided that: ''The amendments
    made by subsections (a) and (b) (amending sections 2020, 2277a-4,
    2277a-8, and 2277a-10 of this title) shall be effective for
    insurance premiums due to the Farm Credit System Insurance
    Corporation under the Farm Credit Act of 1971 (12 U.S.C. 2001 et
    seq.) on or after January 1, 1990, based on the loan volume of each
    bank for each calendar year beginning with calendar year 1989, and
    shall be effective for the calculation of the initial premium
    payment required under section 5.56(c) of the Farm Credit Act of
    1971 (12 U.S.C. 2277a-5(c)).''
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective immediately after
    amendment made by section 401 of Pub. L. 100-233, which was
    effective 6 months after Jan. 6, 1988, see section 1001(b) of Pub.
    L. 100-399, set out as a note under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2277a-4 of this title.
 
-CITE-
    12 USC Sec. 2021                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER I - FARM CREDIT BANKS
 
-HEAD-
    Sec. 2021. Loans through associations or agents
 
-STATUTE-
    (a) In general
      The Farm Credit Banks shall, except as otherwise herein provided,
    make loans of the type authorized under section 2015(a) of this
    title through a Federal land bank association chartered to serve
    the territory in which the real estate of the borrower is located.
    (b) No active association
      If there is no active association chartered to serve territory
    where the real estate is located, the bank may make the loan
    directly or through such bank or trust company or savings or other
    financial institution as such bank may designate.
    (c) Purchase of stock required
      When the loan is not made through a Federal land bank
    association, the applicant shall purchase stock in the bank in
    accordance with the capitalization requirements provided for in the
    bylaws of the bank.
 
-SOURCE-
    (Pub. L. 92-181, title I, Sec. 1.13, as added Pub. L. 100-233,
    title IV, Sec. 401, Jan. 6, 1988, 101 Stat. 1628.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 1.13 of Pub. L. 92-181 was classified to section
    2031 of this title prior to the general amendment of this
    subchapter by Pub. L. 100-233, Sec. 401.
 
-CITE-
    12 USC Sec. 2022                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER I - FARM CREDIT BANKS
 
-HEAD-
    Sec. 2022. Liens on stock
 
-STATUTE-
      The Farm Credit Banks shall have a first lien on the stock or
    participation certificates it issues for the payment of any
    liability of the stockholders to the bank.
 
-SOURCE-
    (Pub. L. 92-181, title I, Sec. 1.14, as added Pub. L. 100-233,
    title IV, Sec. 401, Jan. 6, 1988, 101 Stat. 1629.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 1.14 of Pub. L. 92-181 was classified to section
    2032 of this title prior to the general amendment of this
    subchapter by Pub. L. 100-233, Sec. 401.
 
-CITE-
    12 USC Sec. 2023                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER I - FARM CREDIT BANKS
 
-HEAD-
    Sec. 2023. Taxation
 
-STATUTE-
      The Farm Credit Banks and the capital, reserves, and surplus
    thereof, and the income derived therefrom, shall be exempt from
    Federal, State, municipal, and local taxation, except taxes on real
    estate held by a Farm Credit Bank to the same extent, according to
    its value, as other similar property held by other persons is
    taxed.  The mortgages held by the Farm Credit Banks and the notes,
    bonds, debentures, and other obligations issued by the banks shall
    be considered and held to be instrumentalities of the United States
    and, as such, they and the income therefrom shall be exempt from
    all Federal, State, municipal, and local taxation, other than
    Federal income tax liability of the holder thereof under the Public
    Debt Act of 1941 (31 U.S.C. 3124).
 
-SOURCE-
    (Pub. L. 92-181, title I, Sec. 1.15, as added Pub. L. 100-233,
    title IV, Sec. 401, Jan. 6, 1988, 101 Stat. 1629; amended Pub. L.
    100-399, title IV, Sec. 401(l), Aug. 17, 1988, 102 Stat. 997.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 1.15 of Pub. L. 92-181 was classified to section
    2033 of this title prior to the general amendment of this
    subchapter by Pub. L. 100-233, Sec. 401.
      A prior section 2031, Pub. L. 92-181, title I, Sec. 1.13, Dec.
    10, 1971, 85 Stat. 587; Pub. L. 99-205, title II, Sec. 205(d)(4),
    Dec. 23, 1985, 99 Stat. 1703; Pub. L. 100-233, title VIII, Sec.
    802(e), Jan. 6, 1988, 101 Stat. 1710, related to organizations,
    articles, and charters of Federal land bank associations, and
    powers of Farm Credit Administration, prior to the general
    amendment of this subchapter by Pub. L. 100-233, Sec. 401. See
    section 2011 of this title.
      A prior section 2032, Pub. L. 92-181, title I, Sec. 1.14, Dec.
    10, 1971, 85 Stat. 587, related to board of directors, prior to the
    general amendment of this subchapter by Pub. L. 100-233, Sec. 401.
    See section 2012 of this title.
      A prior section 2033, Pub. L. 92-181, title I, Sec. 1.15, Dec.
    10, 1971, 85 Stat. 587; Pub. L. 96-592, title I, Sec. 110, Dec. 24,
    1980, 94 Stat. 3439; Pub. L. 99-205, title II, Sec. 205(d)(5), Dec.
    23, 1985, 99 Stat. 1704; Pub. L. 100-233, title VII, Sec. 705(b),
    title VIII, Sec. 805(b), Jan. 6, 1988, 101 Stat. 1707, 1715; Pub.
    L. 100-399, title VI, Sec. 604, title VII, Sec. 702(a), Aug. 17,
    1988, 102 Stat. 1006, related to general corporate powers, prior to
    the general amendment of this subchapter by Pub. L. 100-233, Sec.
    401. See section 2013 of this title.
      A prior section 2034, Pub. L. 92-181, title I, Sec. 1.16, Dec.
    10, 1971, 85 Stat. 589; Pub. L. 96-592, title I, Sec. 111, Dec. 24,
    1980, 94 Stat. 3439; Pub. L. 99-205, title III, Sec. 304(a), Dec.
    23, 1985, 99 Stat. 1708, related to association stock, value of
    shares, voting, and purchase, prior to the general amendment of
    this subchapter by Pub. L. 100-233, Sec. 401.
      A prior section 2051, Pub. L. 92-181, title I, Sec. 1.17, Dec.
    10, 1971, 85 Stat. 589; Pub. L. 96-592, title I, Sec. 112, Dec. 24,
    1980, 94 Stat. 3439; Pub. L. 99-205, title II, Sec. 205(d)(6),
    title VI, Sec. 602, Dec. 23, 1985, 99 Stat. 1704, 1711; Pub. L.
    100-233, title VIII, Sec. 802(f), Jan. 6, 1988, 101 Stat. 1711,
    related to land bank reserves, dividends, and patronage refunds,
    prior to the general amendment of this subchapter by Pub. L.
    100-233, Sec. 401.
      A prior section 2052, Pub. L. 92-181, title I, Sec. 1.18, Dec.
    10, 1971, 85 Stat. 589; Pub. L. 96-592, title I, Sec. 113, Dec. 24,
    1980, 94 Stat. 3439; Pub. L. 99-205, title VI, Sec. 603, Dec. 23,
    1985, 99 Stat. 1711; Pub. L. 100-233, title VIII, Sec. 802(g), Jan.
    6, 1988, 101 Stat. 1711, related to association reserves,
    dividends, and patronage refunds, prior to the general amendment of
    this subchapter by Pub. L. 100-233, Sec. 401.
      A prior section 2053, Pub. L. 92-181, title I, Sec. 1.19, Dec.
    10, 1971, 85 Stat. 590; Pub. L. 96-592, title I, Sec. 114, Dec. 24,
    1980, 94 Stat. 3439, related to agreements for sharing gains or
    losses, prior to the general amendment of this subchapter by Pub.
    L. 100-233, Sec. 401.
      A prior section 2054, Pub. L. 92-181, title I, Sec. 1.20, Dec.
    10, 1971, 85 Stat. 590; Pub. L. 96-592, title I, Sec. 115, Dec. 24,
    1980, 94 Stat. 3439; Pub. L. 99-205, title II, Sec. 205(d)(7), Dec.
    23, 1985, 99 Stat. 1704; Pub. L. 100-233, title VIII, Sec. 805(c),
    Jan. 6, 1988, 101 Stat. 1715, related to liens on stock and
    participation certificates, prior to the general amendment of this
    subchapter by Pub. L. 100-233, Sec. 401.
      A prior section 2055, Pub. L. 92-181, title I, Sec. 1.21, Dec.
    10, 1971, 85 Stat. 590; Pub. L. 100-399, title IX, Sec. 901(a),
    Aug. 17, 1988, 102 Stat. 1007, related to tax exempt status, prior
    to the general amendment of this subchapter by Pub. L. 100-233,
    Sec. 401. See section 2023 of this title.
                                 AMENDMENTS
      1988 - Pub. L. 100-399 inserted a comma after ''therefrom'' and
    substituted ''3124'' for ''742(a)''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective immediately after
    amendment made by section 401 of Pub. L. 100-233, which was
    effective 6 months after Jan. 6, 1988, see section 1001(b) of Pub.
    L. 100-399, set out as a note under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2214 of this title.
 
-CITE-
    12 USC SUBCHAPTER II - FARM CREDIT ASSOCIATIONS              01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER II - FARM CREDIT ASSOCIATIONS
    .
 
-HEAD-
    SUBCHAPTER II - FARM CREDIT ASSOCIATIONS
 
-COD-
                                CODIFICATION
      Title II of the Farm Credit Act of 1971, comprising this
    subchapter, was originally enacted by Pub. L. 92-181, title II,
    Dec. 10, 1971, 85 Stat. 590, and amended by Pub. L. 95-443, Oct.
    10, 1978, 92 Stat. 1066; Pub. L. 96-592, Dec. 24, 1980, 94 Stat.
    3437; Pub. L. 99-205, Dec. 23, 1985, 99 Stat. 1678; Pub. L. 99-509,
    Oct. 21, 1986, 100 Stat. 1874; Pub. L. 100-233, Jan. 6, 1988, 101
    Stat. 1568. Such title is shown herein, however, as having been
    added by Pub. L. 100-233, title IV, Sec. 401, Jan. 6, 1988, 101
    Stat. 1622, without reference to such intervening amendments
    because of the extensive revision of the title's provisions by Pub.
    L. 100-233.
 
-SECREF-
                  SUBCHAPTER REFERRED TO IN OTHER SECTIONS
      This subchapter is referred to in sections 2015, 2019, 2122,
    2202a, 2206a, 2214a, 2218, 2252 of this title.
 
-CITE-
    12 USC Part A - Production Credit Associations               01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER II - FARM CREDIT ASSOCIATIONS
    Part A - Production Credit Associations
    .
 
-HEAD-
    Part A - Production Credit Associations
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-233, title IV, Sec. 401, Jan. 6, 1988, 101
    Stat. 1629, substituted ''Farm Credit Associations'' for ''Federal
    Intermediate Credit Banks and Production Credit Associations'' as
    subchapter heading, and substituted ''Production Credit
    Associations'' for ''Federal Intermediate Credit Banks'' as heading
    for part A.
 
-CITE-
    12 USC Sec. 2071                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER II - FARM CREDIT ASSOCIATIONS
    Part A - Production Credit Associations
 
-HEAD-
    Sec. 2071. Organization and charters
 
-STATUTE-
    (a) Charter
      Each production credit association shall continue as a Federally
    chartered instrumentality of the United States.
    (b) Organization
      (1) In general
        Production credit associations may be organized by 10 or more
      farmers or ranchers or producers or harvesters of aquatic
      products desiring to borrow money under the provisions of this
      part.
      (2) Articles of association
        The proposed articles of association shall be forwarded to the
      Farm Credit Bank for the district accompanied by an agreement to
      subscribe on behalf of the association for stock in the bank in
      such amounts as may be required by the bank.
      (3) Contents of articles
        The articles shall specify in general terms the -
          (A) objects for which the association is formed;
          (B) powers to be exercised by the association in carrying out
        the functions authorized by this part; and
          (C) territory the association proposes to serve.
      (4) Signatures
        The articles shall be signed by persons desiring to form such
      an association and shall be accompanied by a statement signed by
      each such person establishing eligibility to borrow from the
      association in which such person will become a stockholder.
      (5) Copy to FCA
        A copy of the articles of association shall be forwarded to the
      Farm Credit Administration with the recommendations of the bank
      concerning the need for such an association in order to
      adequately serve the credit needs of eligible persons in the
      proposed territory and whether that territory includes any area
      described in the charter of another production credit
      association.
      (6) Denial of charter
        The Farm Credit Administration for good cause shown may deny
      the charter.
      (7) Approval of articles
        On approval of the proposed articles by the Farm Credit
      Administration, and on the issuance of a charter, the association
      shall become as of such date a federally chartered body corporate
      and an instrumentality of the United States.
      (8) Powers of FCA
        The Farm Credit Administration shall have the power, under
      rules and regulations prescribed by the Farm Credit
      Administration or by prescribing in the terms of the charter, to
      -
          (A) provide for the organization of the association;
          (B) provide for the initial amount of stock of the
        association;
          (C) provide for the territory within which the association's
        operations may be carried on; and
          (D) approve amendments to the charter of the association.
 
-SOURCE-
    (Pub. L. 92-181, title II, Sec. 2.0, as added Pub. L. 100-233,
    title IV, Sec. 401, Jan. 6, 1988, 101 Stat. 1629; amended Pub. L.
    100-399, title IV, Sec. 401(m), Aug. 17, 1988, 102 Stat. 997; Pub.
    L. 102-237, title V, Sec. 502(b), Dec. 13, 1991, 105 Stat. 1868.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 2071, Pub. L. 92-181, title II, Sec. 2.0, Dec.
    10, 1971, 85 Stat. 590; Pub. L. 100-233, title VIII, Sec. 802(h),
    Jan. 6, 1988, 101 Stat. 1711, related to establishment and branches
    of Federal intermediate credit banks, prior to the general
    amendment of this subchapter by Pub. L. 100-233, Sec. 401.
                                 AMENDMENTS
      1991 - Subsec. (b)(8). Pub. L. 102-237 substituted ''charter,
    to'' for ''charter to'' in introductory provisions.
      1988 - Subsec. (b)(1). Pub. L. 100-399, Sec. 401(m)(1),
    substituted ''this part'' for ''this subchapter''.
      Subsec. (b)(3)(B). Pub. L. 100-399, Sec. 401(m)(2), (3), struck
    out ''the'' before ''powers'' and substituted ''this subtitle'' for
    ''this part'', both of which for purposes of codification were
    translated as ''this part'', requiring no change in text.
      Subsec. (b)(3)(C). Pub. L. 100-399, Sec. 401(m)(3), struck out
    ''the'' before ''territory''.
      Subsec. (b)(8). Pub. L. 100-399, Sec. 401(m)(4), struck out in
    introductory provision ''or by approval of bylaws of the
    association'' after ''the charter'' and amended subpar. (D)
    generally.  Prior to amendment, subpar. (D) read as follows:
    ''direct at any time such changes in the charter as the Farm Credit
    Administration finds necessary for the accomplishment of the
    purposes of this chapter''.
                      EFFECTIVE DATE OF 1991 AMENDMENT
      Amendment by Pub. L. 102-237 effective as if included in the
    provision of the Food, Agriculture, Conservation, and Trade Act of
    1990, Pub. L. 101-624, to which the amendment relates, see section
    1101(b)(4) of Pub. L. 102-237, set out as a note under section 1421
    of Title 7, Agriculture.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective immediately after
    amendment made by section 401 of Pub. L. 100-233, which was
    effective 6 months after Jan. 6, 1988, see section 1001(b) of Pub.
    L. 100-399, set out as a note under section 2002 of this title.
                               EFFECTIVE DATE
      Section 401 of Pub. L. 100-233 provided in part that this
    subchapter is effective 6 months after Jan. 6, 1988.
       MERGER OF PRODUCTION CREDIT ASSOCIATIONS AND FEDERAL LAND BANK
                                ASSOCIATIONS
      Section 411 of Pub. L. 100-233, as amended by Pub. L. 100-399,
    title IV, Sec. 403, Aug. 17, 1988, 102 Stat. 999, provided that:
      ''(a) Submission of Proposal. - Not later than 6 months after the
    date of the merger of the Federal land bank and the Federal
    intermediate credit bank in a district, the Boards of Directors of
    each Federal land bank association and each production credit
    association in such district, that share substantially the same
    geographical territory with each other, shall submit to the voting
    stockholders of each such association for their approval, a plan,
    approved by the supervising bank and the Farm Credit
    Administration, for merging such associations.
      ''(b) Prerequisites to Merger. -
        ''(1) Stockholder vote. - The stockholder vote required for
      approval of a merger under subsection (a) shall be a majority of
      the voting stockholders of each association voting, in person or
      by written proxy, at a duly authorized stockholders meeting.
        ''(2) Submission to fca. - Not later than 60 days prior to the
      end of the 12-month period beginning on the date of the enactment
      of this section (Jan. 6, 1988), the plan of merger under
      subsection (a), together with all information to be presented to
      the stockholders, shall be submitted to the Farm Credit
      Administration.
        ''(3) Expedited consideration by fca. - The Farm Credit
      Administration shall expedite its consideration of the plan and
      accompanying information submitted under paragraph (2) so that
      review and approval of such plan and information shall be
      completed by the Administration so as to enable a stockholder
      vote to occur within the 12-month period referred to in paragraph
      (2).
      ''(c) Direct Lenders. - On approval of a merger under this
    subsection, the resulting association shall be a direct lender in
    the same manner as applies to production credit associations.''
            REASSIGNMENT OF ASSOCIATIONS TO ADJOINING DISTRICTS
      Section 433 of Pub. L. 100-233, as amended by Pub. L. 100-399,
    title IV, Sec. 417, Aug. 17, 1988, 102 Stat. 1004, provided that:
      ''(a) Petition of Bank. - Notwithstanding any other provision of
    law, effective for the 12-month period beginning on the date of
    enactment of this Act (Jan. 6, 1988), each Federal land bank
    association or production credit association, whose chartered
    territory adjoins the territory of another district, may petition
    the Farm Credit Administration to amend the charters of the
    association and the adjoining district bank to provide that the
    territory of the association is part of the adjoining district.
      ''(b) Requirements of Petition. - To be considered under this
    section, the petition must be signed by not less than 15 percent of
    the stockholders of the association.  Only one such petition may be
    filed by an association under this section.
      ''(c) FCA Action. - The Farm Credit Administration shall take any
    action necessary -
        ''(1) to amend the charters of the association and the district
      bank; and
        ''(2) to incorporate the petitioning association into the
      adjoining district if the reassignment is approved by -
          ''(A) a majority of the stockholders of the association
        voting, in person or by proxy, at a duly authorized
        stockholders' meeting held for such purpose;
          ''(B) the board of directors of the adjoining district bank;
          ''(C) the Farm Credit System Assistance Board; and
          ''(D) the Farm Credit Administration Board.''
 
-CITE-
    12 USC Sec. 2072                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER II - FARM CREDIT ASSOCIATIONS
    Part A - Production Credit Associations
 
-HEAD-
    Sec. 2072. Board of directors
 
-STATUTE-
      Each production credit association shall elect from the voting
    members of such association, a board of directors of such number,
    for such terms, with such qualifications, and in such manner as may
    be required by the bylaws of the association, except that at least
    one member shall be elected by the other directors, which member
    shall not be a director, officer, employee, stockholder, or agent
    of a System institution.
 
-SOURCE-
    (Pub. L. 92-181, title II, Sec. 2.1, as added Pub. L. 100-233,
    title IV, Sec. 401, Jan. 6, 1988, 101 Stat. 1630; amended Pub. L.
    100-399, title IV, Sec. 401(n), Aug. 17, 1988, 102 Stat. 997; Pub.
    L. 102-237, title V, Sec. 502(c), Dec. 13, 1991, 105 Stat. 1868.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 2072, Pub. L. 92-181, title II, Sec. 2.1, Dec.
    10, 1971, 85 Stat. 591; Pub. L. 96-592, title II, Sec. 201, Dec.
    24, 1980, 94 Stat. 3439; Pub. L. 99-205, title II, Sec. 205(e)(1),
    Dec. 23, 1985, 99 Stat. 1704; Pub. L. 100-233, title VII, Sec.
    705(c), title VIII, Sec. 802(i), 805(d), Jan. 6, 1988, 101 Stat.
    1707, 1711, 1715; Pub. L. 100-399, title VI, Sec. 604, title IX,
    Sec. 901(b), Aug. 17, 1988, 102 Stat. 1006, 1007, related to
    corporate existence and general corporate powers, prior to the
    general amendment of this subchapter by Pub. L. 100-233, Sec. 401.
                                 AMENDMENTS
      1991 - Pub. L. 102-237 substituted ''stockholder, or agent'' for
    ''or stockholder''.
      1988 - Pub. L. 100-399 struck out the comma after ''except
    that''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective immediately after
    amendment made by section 401 of Pub. L. 100-233, which was
    effective 6 months after Jan. 6, 1988, see section 1001(b) of Pub.
    L. 100-399, set out as a note under section 2002 of this title.
 
-CITE-
    12 USC Sec. 2073                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER II - FARM CREDIT ASSOCIATIONS
    Part A - Production Credit Associations
 
-HEAD-
    Sec. 2073. General corporate powers
 
-STATUTE-
      Each production credit association shall be a body corporate and,
    subject to supervision by the Farm Credit Bank for the district and
    regulation by the Farm Credit Administration, shall have the power
    to -
        (1) have succession until terminated in accordance with this
      chapter or any other Act of Congress;
        (2) adopt and use a corporate seal;
        (3) make contracts;
        (4) sue and be sued;
        (5) acquire, hold, dispose, and otherwise exercise all of the
      usual incidents of ownership of real and personal property
      necessary or convenient to the business of the association;
        (6) operate under the direction of the board of directors of
      the association in accordance with the provisions of this
      chapter;
        (7) subscribe to stock of the bank;
        (8) purchase stock of the bank held by other production credit
      associations and stock of other production credit associations;
        (9) contribute to the capital of the bank or other production
      credit associations;
        (10) invest funds of the association as may be approved by the
      Farm Credit Bank under regulations of the Farm Credit
      Administration and deposit the current funds and securities of
      such with the Farm Credit Bank, a member bank of the Federal
      Reserve System, or any bank insured under the Federal Deposit
      Insurance Corporation, and may pay fees therefor and receive
      interest thereon as may be agreed;
        (11) buy and sell obligations of or insured by the United
      States or of any agency thereof or of any banks of the Farm
      Credit System and buy from and sell to such banks, interests in
      loans and in other financial assistance extended and nonvoting
      stock, as may be authorized by the Farm Credit Bank in accordance
      with regulations of the Farm Credit Administration;
        (12) borrow money from the Farm Credit Bank, and with the
      approval of such bank, borrow from and issue notes or other
      obligations to any commercial bank or other financial
      institution;
        (13) make and participate in loans, accept advance payments,
      and provide services and other assistance as authorized in this
      part and charge fees therefor, and when authorized by the bank
      participate with one or more other Farm Credit System
      institutions in loans made under this subchapter or other
      subchapters of this chapter on the basis prescribed in section
      2206 of this title;
        (14) endorse and become liable on loans discounted or pledged
      to the Farm Credit Bank;
        (15) as may be authorized by the Farm Credit Bank in accordance
      with regulations of the Farm Credit Administration, agree with
      other Farm Credit System institutions to share loan or other
      losses, whether to protect against capital impairment or for any
      other purpose;
        (16) prescribe, by its board of directors, its bylaws that
      shall be consistent with law, and that shall provide for -
          (A) the classes of its stock and the manner in which such
        stock shall be issued, transferred, and retired; and
          (B) the manner in which it is to -
            (i) select officers and employees;
            (ii) acquire, hold, and transfer property;
            (iii) conduct general business; and
            (iv) exercise and enjoy the privileges granted to it by
          law;
        (17) provide by its board of directors for a manager or other
      chief executive officer, and provide for such other officers or
      employees as may be necessary, including joint employees as
      provided in this chapter, define their duties, and require surety
      bonds or make other provisions against losses occasioned by
      employees, but no director shall, within one year after the date
      when such director ceases to be a member of the board, serve as a
      salaried employee of the association on the board of which he
      served;
        (18) elect by the board of directors of the association a loan
      committee with power to approve applications for membership in
      the association and loans or participations or, with the approval
      of the bank, delegate the approval of applications for membership
      and loans or participations within specified limits to other
      committees or to authorized officers and employees of the
      association;
        (19) perform any functions delegated to the association by the
      bank;
        (20) exercise by the board of directors or authorized officers
      or employees of the association, all such incidental powers as
      may be necessary or expedient to carry on the business of the
      association; and
        (21) operate as an originator and become certified as a
      certified facility under subchapter VIII of this chapter.
 
-SOURCE-
    (Pub. L. 92-181, title II, Sec. 2.2, as added Pub. L. 100-233,
    title IV, Sec. 401, Jan. 6, 1988, 101 Stat. 1630; amended Pub. L.
    100-399, title IV, Sec. 401(o), Aug. 17, 1988, 102 Stat. 997.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 2073, Pub. L. 92-181, title II, Sec. 2.2, Dec.
    10, 1971, 85 Stat. 592; Pub. L. 96-592, title II, Sec. 202, Dec.
    24, 1980, 94 Stat. 3440; Pub. L. 99-205, title II, Sec.
    205(e)(2)-(5), title VI, Sec. 604, Dec. 23, 1985, 99 Stat. 1704,
    1711; Pub. L. 100-233, title VIII, Sec. 802(j), 805(e), Jan. 6,
    1988, 101 Stat. 1711, 1715, related to Federal intermediate credit
    bank stock, prior to the general amendment of this subchapter by
    Pub. L. 100-233, Sec. 401.
                                 AMENDMENTS
      1988 - Par. (16). Pub. L. 100-399, Sec. 401(o)(1), amended par.
    (16) generally.  Prior to amendment, par. (16) read as follows:
    ''prescribe by the board of directors of the association the bylaws
    not inconsistent with law providing for -
        ''(A) the classes of association stock and the manner in which
      the stock shall be issued, transferred, and retired;
        ''(B) the officers and employees elected or provided for;
        ''(C) the property acquired, held, and transferred by the
      association; and
        ''(D) the general business conducted, and the privileges
      granted to the association by law exercised and enjoyed;''.
      Par. (17). Pub. L. 100-399, Sec. 401(o)(2), substituted ''provide
    by its board of directors for'' for ''elect by the board of
    directors of the association'' and ''serve as'' for ''be elected or
    designated''.
      Par. (21). Pub. L. 100-399, Sec. 401(o)(3)-(5), added par. (21).
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective immediately after
    amendment made by section 401 of Pub. L. 100-233, which was
    effective 6 months after Jan. 6, 1988, see section 1001(b) of Pub.
    L. 100-399, set out as a note under section 2002 of this title.
 
-CITE-
    12 USC Sec. 2074                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER II - FARM CREDIT ASSOCIATIONS
    Part A - Production Credit Associations
 
-HEAD-
    Sec. 2074. Production credit association capitalization
 
-STATUTE-
    (a) In general
      In accordance with section 2154a of this title, each production
    credit association shall provide, through its bylaws and subject to
    Farm Credit Administration regulations, for its capitalization and
    the manner in which its stock shall be issued, held, transferred,
    and retired and, except as provided in subsection (b) of this
    section, its earnings distributed.
    (b) Application of earnings
      At the end of each fiscal year, each production credit
    association shall apply the amount of the earnings of the
    association for the fiscal year in excess of the operating expenses
    of the association (including provision for valuation reserves
    against loan assets in accordance with generally accepted
    accounting principles) -
        (1) first, to the restoration of the impairment (if any) of
      capital; and
        (2) second, to the establishment and maintenance of the surplus
      accounts, the minimum aggregate amount of which shall be
      prescribed by the Farm Credit Bank.
    (c) Patronage
      When the bylaws of an association so provide and subject to the
    general directions of the Farm Credit Administration, available net
    earnings at the end of any fiscal year may be distributed on a
    patronage basis in stock, participation certificates, or in cash.
    Any part of the earnings of the fiscal year in excess of the
    operating expenses for such year held in the surplus account may be
    allocated to patrons on a patronage basis.
 
-SOURCE-
    (Pub. L. 92-181, title II, Sec. 2.3, as added Pub. L. 100-233,
    title IV, Sec. 401, Jan. 6, 1988, 101 Stat. 1632; amended Pub. L.
    102-552, title V, Sec. 501, Oct. 28, 1992, 106 Stat. 4129.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 2074, Pub. L. 92-181, title II, Sec. 2.3, Dec.
    10, 1971, 85 Stat. 593; Pub. L. 96-592, title II, Sec. 203, Dec.
    24, 1980, 94 Stat. 3440; Pub. L. 99-205, title II, Sec. 205(e)(6),
    Dec. 23, 1985, 99 Stat. 1704, related to loans, discounts,
    participation, and leasing, prior to the general amendment of this
    subchapter by Pub. L. 100-233, Sec. 401.
                                 AMENDMENTS
      1992 - Subsec. (b). Pub. L. 102-552 amended subsec. (b)
    generally.  Prior to amendment, subsec. (b) read as follows: ''Each
    production credit association at the end of each fiscal year shall
    apply the amount of the earnings of the association for such year
    in excess of the operating expenses of the association (including
    provision for valuation reserves against loan assets in an amount
    equal to one-half of 1 percent of the loans outstanding at the end
    of the fiscal year to the extent that such earnings in such year in
    excess of other operating expenses permit, or in such greater
    amounts as are deemed necessary under generally accepted accounting
    principles, until such reserves equal or exceed 3 1/2 percent of
    the loans outstanding at the end of the fiscal year, beyond which 3
    1/2 percent further additions to such reserves may be made, if
    deemed necessary under generally accepted accounting principles)
    first to the restoration of the impairment, if any, of capital, and
    second, to the establishment and maintenance of the surplus
    accounts, the minimum aggregate amount of which shall be prescribed
    by the Farm Credit Bank.''
 
-CITE-
    12 USC Sec. 2075                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER II - FARM CREDIT ASSOCIATIONS
    Part A - Production Credit Associations
 
-HEAD-
    Sec. 2075. Short- and intermediate-term loans; participation; other
        financial assistance; terms; conditions; interest; security
 
-STATUTE-
    (a) Short- and intermediate-term loans
      Each production credit association, under standards prescribed by
    the board of directors of the Farm Credit Bank of the district, may
    make, guarantee, or participate with other lenders in short- and
    intermediate-term loans and other similar financial assistance to -
        (1) bona fide farmers and ranchers and the producers or
      harvesters of aquatic products, for agricultural or aquatic
      purposes and other requirements of such borrowers, including
      financing for basic processing and marketing directly related to
      the operations of the borrower and those of other eligible
      farmers, ranchers, and producers or harvesters of aquatic
      products, except that the operations of the borrower shall supply
      some portion of the total processing or marketing for which
      financing is extended, except that the aggregate of the financing
      provided by any association for basic processing and marketing
      directly related to the operations of farmers, ranchers, and
      producers or harvesters of aquatic products, if the operations of
      the applicant supply less than 20 percent of the total processing
      or marketing for which financing is extended, shall not exceed 15
      percent of the total of all outstanding loans of all associations
      in the district at the end of its preceding fiscal year;
        (2) rural residents for housing financing in rural areas, under
      regulations of the Farm Credit Administration; and
        (3) persons furnishing to farmers and ranchers farm-related
      services directly related to their on-farm operating needs.
    (b) Rural housing
      (1) In general
        Rural housing financed under this part shall be for
      single-family, moderate-priced dwellings and the appurtenances of
      such not inconsistent with the general quality and standards of
      housing existing in, or planned or recommended for, the rural
      area where it is located.
      (2) Limitation
        The aggregate of such housing loans in an association to
      persons other than farmers or ranchers shall not exceed 15
      percent of the outstanding loans at the end of its preceding
      fiscal year except on prior approval by the Farm Credit Bank of
      the district.  The aggregate of such housing loans in any farm
      credit district shall not exceed 15 percent of the outstanding
      loans of all associations in the district at the end of the
      preceding fiscal year.
      (3) Rural areas
        For rural housing purposes under this section the term ''rural
      areas'' shall not be defined to include any city or village
      having a population in excess of 2,500 inhabitants.
      (4) Equipment
        Each association may own and lease, or lease with option to
      purchase, to stockholders of the association equipment needed in
      the operations of the stockholder.
    (c) Interest rates and charges
      (1) In general
        Loans authorized in subsection (a) of this section shall bear
      such rate or rates of interest as are determined under standards
      prescribed by the board of the bank subject to the provisions of
      section 2205 of this title, and shall be made upon such terms,
      conditions, and upon such security, if any, as shall be
      authorized in such standards.
      (2) Setting of rates
        In setting rates and charges, it shall be the objective to
      provide the types of credit needed by eligible borrowers, at the
      lowest reasonable cost on a sound business basis, taking into
      account the cost of money to the association, necessary reserves
      and expenses of the association, and services provided to
      borrowers and members.
      (3) Varying rates
        The loan documents may provide for the interest rate or rates
      to vary from time to time during the repayment period of the loan
      in accordance with the rate or rates currently being charged by
      the association.
      (4) Prior approval
        Such standards may require prior approval of the bank on
      certain classes of loans, and may authorize a continuing
      commitment to a borrower of a line of credit.
    (d) Special district rule
      (1) Provision of credit and technical assistance outside service
          territory
        Notwithstanding any territorial limitation in the charter of a
      production credit association located in a district in which
      there are only two such associations, the Farm Credit
      Administration Board, on request of such association, may permit
      such association to provide credit and technical assistance to
      any borrower who is denied credit by the other production credit
      association in the district if the Board determines that such
      other production credit association in the district is unduly
      restrictive in the application of credit standards.
      (2) Timing of determination
        If the Farm Credit Administration Board approves the extension
      of credit and technical assistance under paragraph (1), the
      association shall approve or deny the application for credit
      within 90 days after receipt of the application from the
      borrower.
 
-SOURCE-
    (Pub. L. 92-181, title II, Sec. 2.4, as added Pub. L. 100-233,
    title IV, Sec. 401, Jan. 6, 1988, 101 Stat. 1632; amended Pub. L.
    100-399, title IV, Sec. 401(p), (q), Aug. 17, 1988, 102 Stat. 997;
    Pub. L. 101-624, title XVIII, Sec. 1832(b), Nov. 28, 1990, 104
    Stat. 3832.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 2075, Pub. L. 92-181, title II, Sec. 2.4, Dec.
    10, 1971, 85 Stat. 594; Pub. L. 95-443, Oct. 10, 1978, 92 Stat.
    1066; Pub. L. 96-592, title II, Sec. 204, Dec. 24, 1980, 94 Stat.
    3441; Pub. L. 99-509, title I, Sec. 1033(b), Oct. 21, 1986, 100
    Stat. 1877, related to terms, prior to the general amendment of
    this subchapter by Pub. L. 100-233, Sec. 401.
                                 AMENDMENTS
      1990 - Subsec. (a)(1). Pub. L. 101-624 substituted ''some portion
    of the total processing or marketing for which financing is
    extended, except that the aggregate of the financing provided by
    any association for basic processing and marketing directly related
    to the operations of farmers, ranchers, and producers or harvesters
    of aquatic products, if the operations of the applicant supply less
    than 20 percent of the total processing or marketing for which
    financing is extended, shall not exceed 15 percent of the total of
    all outstanding loans of all associations in the district at the
    end of its preceding fiscal year'' for ''at least 20 percent, or
    such larger percent as is required by the supervising bank under
    regulations of the Farm Credit Administration, of the total
    processing or marketing for which financing is extended''.
      1988 - Subsec. (b)(1). Pub. L. 100-399, Sec. 401(p), substituted
    ''this part'' for ''this subchapter'' and substituted ''or
    planned'' for ''planned''.
      Subsec. (d). Pub. L. 100-399, Sec. 401(q), added subsec. (d).
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective immediately after
    amendment made by section 401 of Pub. L. 100-233, which was
    effective 6 months after Jan. 6, 1988, see section 1001(b) of Pub.
    L. 100-399, set out as a note under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2206a of this title.
 
-CITE-
    12 USC Sec. 2076                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER II - FARM CREDIT ASSOCIATIONS
    Part A - Production Credit Associations
 
-HEAD-
    Sec. 2076. Other services
 
-STATUTE-
      Each production credit association may provide technical
    assistance to borrowers, applicants, and members and may make
    available to them at their option such financial related services
    appropriate to their on-farm and aquatic operations as is
    determined feasible by the board of directors of each Farm Credit
    Bank, under regulations prescribed by the Farm Credit
    Administration.
 
-SOURCE-
    (Pub. L. 92-181, title II, Sec. 2.5, as added Pub. L. 100-233,
    title IV, Sec. 401, Jan. 6, 1988, 101 Stat. 1633.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 2076, Pub. L. 92-181, title II, Sec. 2.5, Dec.
    10, 1971, 85 Stat. 595; Pub. L. 96-592, title II, Sec. 205, Dec.
    24, 1980, 94 Stat. 3442; Pub. L. 100-233, title III, Sec. 305, Jan.
    6, 1988, 101 Stat. 1621, related to services related to borrowers'
    operations, prior to the general amendment of this subchapter by
    Pub. L. 100-233, Sec. 401.
 
-CITE-
    12 USC Sec. 2076a                                            01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER II - FARM CREDIT ASSOCIATIONS
    Part A - Production Credit Associations
 
-HEAD-
    Sec. 2076a. Liens on stock
 
-STATUTE-
      Except with regard to stock or participation certificates held by
    other Farm Credit System institutions, each production credit
    association shall have a first lien on stock and participation
    certificates the association issues, on allocated surplus, and on
    investments in equity reserve, for any indebtedness of the holder
    of the capital investments and, in the case of equity reserves, for
    charges for association losses in excess of reserves and surpluses.
 
-SOURCE-
    (Pub. L. 92-181, title II, Sec. 2.6, as added Pub. L. 101-624,
    title XVIII, Sec. 1833(2), Nov. 28, 1990, 104 Stat. 3832.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 2.6 of Pub. L. 92-181 was renumbered section 2.7
    and is classified to section 2077 of this title.
                               EFFECTIVE DATE
      Section effective Jan. 7, 1988, see section 1861(d) of Pub. L.
    101-624, set out as an Effective Date of 1990 Amendment note under
    section 2001 of Title 7, Agriculture.
 
-CITE-
    12 USC Sec. 2077                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER II - FARM CREDIT ASSOCIATIONS
    Part A - Production Credit Associations
 
-HEAD-
    Sec. 2077. Taxation
 
-STATUTE-
      Each production credit association and its obligations are
    instrumentalities of the United States and as such any and all
    notes, debentures, and other obligations issued by such
    associations shall be exempt, both as to principal and interest,
    from all taxation (except surtaxes, estate, inheritance, and gift
    taxes) now or hereafter imposed by the United States or any State,
    territorial, or local taxing authority, except that interest on
    such obligations shall be subject to Federal income taxation in the
    hands of the holder.
 
-SOURCE-
    (Pub. L. 92-181, title II, Sec. 2.7, formerly Sec. 2.6, as added
    Pub. L. 100-233, title IV, Sec. 401, Jan. 6, 1988, 101 Stat. 1633;
    amended Pub. L. 100-399, title IV, Sec. 401(r), Aug. 17, 1988, 102
    Stat. 998; renumbered Sec. 2.7, Pub. L. 101-624, title XVIII, Sec.
    1833(1), Nov. 28, 1990, 104 Stat. 3832.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 2077, Pub. L. 92-181, title II, Sec. 2.6, Dec.
    10, 1971, 85 Stat. 595; Pub. L. 96-592, title II, Sec. 206, Dec.
    24, 1980, 94 Stat. 3442; Pub. L. 99-205, title II, Sec. 205(e)(7),
    (8), Dec. 23, 1985, 99 Stat. 1704; Pub. L. 100-233, title VIII,
    Sec. 802(k), 805(f), Jan. 6, 1988, 101 Stat. 1711, 1715, related to
    net earnings, prior to the general amendment of this subchapter by
    Pub. L. 100-233, Sec. 401.
      A prior section 2078, Pub. L. 92-181, title II, Sec. 2.7, Dec.
    10, 1971, 85 Stat. 597; Pub. L. 99-205, title II, Sec. 205(e)(9),
    Dec. 23, 1985, 99 Stat. 1704, related to distribution of assets on
    liquidation, prior to the general amendment of this subchapter by
    Pub. L. 100-233, Sec. 401.
      A prior section 2079, Pub. L. 92-181, title II, Sec. 2.8, Dec.
    10, 1971, 85 Stat. 597; Pub. L. 100-399, title IX, Sec. 901(a),
    Aug. 17, 1988, 102 Stat. 1007, related to taxation, prior to the
    general amendment of this subchapter by Pub. L. 100-233, Sec. 401.
                                 AMENDMENTS
      1988 - Pub. L. 100-399 substituted ''interest,'' for ''interest''
    and inserted '', except that interest on such obligations shall be
    subject to Federal income taxation in the hands of the holder''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective immediately after
    amendment made by section 401 of Pub. L. 100-233, which was
    effective 6 months after Jan. 6, 1988, see section 1001(b) of Pub.
    L. 100-399, set out as a note under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2214 of this title.
 
-CITE-
    12 USC Part B - Federal Land Bank Associations               01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER II - FARM CREDIT ASSOCIATIONS
    Part B - Federal Land Bank Associations
    .
 
-HEAD-
    Part B - Federal Land Bank Associations
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-233, title IV, Sec. 401, Jan. 6, 1988, 101
    Stat. 1634, substituted ''Federal Land Bank Associations'' for
    ''Production Credit Associations'' as heading for part B.
 
-CITE-
    12 USC Sec. 2091                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER II - FARM CREDIT ASSOCIATIONS
    Part B - Federal Land Bank Associations
 
-HEAD-
    Sec. 2091. Organizations; articles; charters; powers of the Farm
        Credit Administration
 
-STATUTE-
    (a) Charter
      Each Federal land bank association shall continue as a federally
    chartered instrumentality of the United States.
    (b) Organization
      (1) In general
        A Federal land bank association may be organized by any group
      of 10 or more persons desiring to borrow money from a Farm Credit
      Bank under section 2015(a) of this title, including persons to
      whom the Farm Credit Bank has made a loan directly or through an
      agent and has taken as security real estate located in the
      territory proposed to be served by the association.
      (2) Articles of association
        (A) Description of territory
          The articles of association shall describe the territory
        within which the association proposes to carry on its
        operations.
        (B) Submission to FCB
          Proposed articles shall be forwarded to the Farm Credit Bank
        for the district, accompanied by an agreement to subscribe on
        behalf of the association for stock in accordance with the
        bylaws of the Farm Credit Bank.
        (C) Stock purchase
          Association stock may be paid for by surrendering for
        cancellation stock in the bank held by a borrower and the
        issuance of an equivalent amount of stock to such borrower in
        the association.
        (D) Statement
          The articles shall be accompanied by a statement signed by
        each of the members of the proposed association establishing -
            (i) the individual's eligibility and request for a Farm
          Credit Bank loan;
            (ii) that the real estate with respect to which the
          individual desires the loan for is not being served by
          another Federal land bank association; and
            (iii) that the individual is or will become a stockholder
          in the proposed association.
        (E) Submission to FCA
          A copy of the articles of association shall be forwarded to
        the Farm Credit Administration with the recommendations of the
        bank concerning the need for the proposed association in order
        to adequately serve the credit needs of eligible persons in the
        proposed territory and a statement as to whether or not the
        territory includes any territory described in the charter of
        another Federal land bank association.
      (3) Denials of charters
        The Farm Credit Administration for good cause shown may deny
      the charter applied for.
      (4) Approval of articles
        On the approval of the proposed articles by the Farm Credit
      Administration and the issuance of such charter, the association
      shall become as of such date a federally chartered body corporate
      and an instrumentality of the United States.
    (c) FCA authority on organization
      The Farm Credit Administration shall have power, in the terms of
    the charter, under rules and regulations prescribed by the Farm
    Credit Administration -
        (1) to provide for the organization of the association;
        (2) to provide for the initial amount of stock of the
      association;
        (3) to provide for the territory within which the association
      may carry on its operations; and
        (4) to approve amendments to the charter of such association.
 
-SOURCE-
    (Pub. L. 92-181, title II, Sec. 2.10, as added Pub. L. 100-233,
    title IV, Sec. 401, Jan. 6, 1988, 101 Stat. 1634; amended Pub. L.
    100-399, title IV, Sec. 401(s), (t), Aug. 17, 1988, 102 Stat. 998.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 2091, Pub. L. 92-181, title II, Sec. 2.10, Dec.
    10, 1971, 85 Stat. 597; Pub. L. 96-592, title II, Sec. 207, Dec.
    24, 1980, 94 Stat. 3442; Pub. L. 99-205, title II, Sec. 205(e)(10),
    Dec. 23, 1985, 99 Stat. 1704; Pub. L. 100-233, title VIII, Sec.
    802(l), 805(g), Jan. 6, 1988, 101 Stat. 1711, 1715, related to
    organization and charters of production credit associations, prior
    to the general amendment of this subchapter by Pub. L. 100-233,
    Sec. 401.
                                 AMENDMENTS
      1988 - Subsec. (b)(1). Pub. L. 100-399, Sec. 401(s)(1), inserted
    ''under section 2015(a) of this title'' after ''a Farm Credit
    Bank''.
      Subsec. (b)(2)(D)(i). Pub. L. 100-399, Sec. 401(s)(2), amended
    cl. (i) generally.  Prior to amendment, cl. (i) read as follows:
    ''the individual's eligibility for, and request or need of the
    individual of a Farm Credit Bank loan;''.
      Subsec. (c). Pub. L. 100-399, Sec. 401(t), amended subsec. (c)
    generally.  Prior to amendment, subsec. (c) read as follows: ''The
    Farm Credit Administration shall have power, in the terms of the
    charter, under rules and regulations prescribed by the Farm Credit
    Administration or by approving the bylaws of the association, to
    provide for the -
        ''(1) organization of the association;
        ''(2) the initial amount of stock of such association;
        ''(3) the territory within which the operations of the
      association may be carried on; and
        ''(4) to direct at any time changes in the charter of such
      association as the Farm Credit Administration finds necessary in
      accomplishing the purposes of this chapter.''
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective immediately after
    amendment made by section 401 of Pub. L. 100-233, which was
    effective 6 months after Jan. 6, 1988, see section 1001(b) of Pub.
    L. 100-399, set out as a note under section 2002 of this title.
 
-CITE-
    12 USC Sec. 2092                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER II - FARM CREDIT ASSOCIATIONS
    Part B - Federal Land Bank Associations
 
-HEAD-
    Sec. 2092. Board of directors
 
-STATUTE-
      Each Federal land bank association shall elect from its voting
    shareholders a board of directors of such number, for such terms,
    in such manner, and with such qualifications as may be required by
    its bylaws except that, at least one member shall be elected by the
    other directors, which member shall not be a director, officer,
    employee, stockholder, or agent of a System institution.
 
-SOURCE-
    (Pub. L. 92-181, title II, Sec. 2.11, as added Pub. L. 100-233,
    title IV, Sec. 401, Jan. 6, 1988, 101 Stat. 1635; amended Pub. L.
    102-237, title V, Sec. 502(d), Dec. 13, 1991, 105 Stat. 1868.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 2092, Pub. L. 92-181, title II, Sec. 2.11, Dec.
    10, 1971, 85 Stat. 598, related to board of directors, prior to the
    general amendment of this subchapter by Pub. L. 100-233, Sec. 401.
                                 AMENDMENTS
      1991 - Pub. L. 102-237 substituted ''stockholder, or agent'' for
    ''or stockholder''.
 
-CITE-
    12 USC Sec. 2093                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER II - FARM CREDIT ASSOCIATIONS
    Part B - Federal Land Bank Associations
 
-HEAD-
    Sec. 2093. General corporate powers
 
-STATUTE-
      Each Federal land bank association shall be a body corporate and,
    subject to supervision of the Farm Credit Bank for the district and
    the regulation of the Farm Credit Administration, shall have the
    power to -
        (1) adopt and use a corporate seal;
        (2) have succession until dissolved under the provisions of
      this chapter or other Act of Congress;
        (3) make contracts;
        (4) sue and be sued;
        (5) acquire, hold, dispose, and otherwise exercise all of the
      usual incidents of ownership of real estate and personal property
      necessary or convenient to the business of the association;
        (6) operate under the direction of the board of directors of
      the association in accordance with this chapter;
        (7) provide by its board of directors for a manager or other
      chief executive officer, and provide for such other officers or
      employees as may be necessary, including joint employees as
      provided in this chapter, define the duties of such, and require
      surety bonds or make other provision against losses occasioned by
      employees, except that no director shall, within one year after
      the date when such director ceases to be a member of the board,
      serve as a salaried employee of the association on the board of
      which such director served;
        (8) prescribe, by its board of directors, its bylaws that shall
      be consistent with law, and that shall provide for -
          (A) the classes of its stock and the manner in which such
        stock shall be issued, transferred, and retired; and
          (B) the manner in which it is to -
            (i) select officers and employees;
            (ii) acquire, hold, and transfer property;
            (iii) conduct general business; and
            (iv) exercise and enjoy the privileges granted to it by
          law;
        (9) accept applications for Farm Credit Bank loans and receive
      from such bank and disburse to the borrowers the proceeds of such
      loans;
        (10) subscribe to stock of the Farm Credit Bank of the
      district;
        (11) elect by its board of directors a loan committee with
      power to elect applicants for membership in the association and
      recommend loans to the Farm Credit Bank, or with the approval of
      the Farm Credit Bank, delegate the election of applicants for
      membership and the approval of loans within specified limits to
      other committees or to authorized employees of the association;
        (12) on agreement with the bank, take such additional actions
      with respect to applications and loans and perform such functions
      as are vested by law in the Farm Credit Banks as may be agreed to
      by the association;
        (13) endorse and become liable to the bank on loans it makes to
      association members;
        (14) receive such compensation and deduct such sums from loan
      proceeds with respect to each loan as may be agreed between the
      association and the bank and make such other charges for services
      as may be approved by the bank;
        (15) provide technical assistance to members, borrowers,
      applicants, and other eligible persons and make available to
      them, at their option, such financial related services
      appropriate to their operations as it determines, with Farm
      Credit Bank approval, are feasible, under regulations of the Farm
      Credit Administration;
        (16) borrow money from the bank and, with the approval of such
      bank, borrow from and issue association notes or other
      obligations to any commercial bank or other financial
      institution;
        (17) buy and sell obligations of or insured by the United
      States or any agency thereof or of any banks of the Farm Credit
      System;
        (18) invest association funds in such obligations as may be
      authorized in regulations of the Farm Credit Administration and
      approved by the bank and deposit securities and current funds of
      the association with any member bank of the Federal Reserve
      System, with the Farm Credit Bank, or with any bank insured by
      the Federal Deposit Insurance Corporation, and pay fees therefor
      and receive interest thereon as may be agreed;
        (19) perform such other function delegated to the association
      by the Farm Credit Bank of the district;
        (20) exercise by its board of directors or authorized officers
      or agents all such incidental powers as may be necessary or
      expedient in the conduct of its business;
        (21) contribute to the capital of the bank; and
        (22) operate as an originator and become certified as a
      certified facility under subchapter VIII of this chapter.
 
-SOURCE-
    (Pub. L. 92-181, title II, Sec. 2.12, as added Pub. L. 100-233,
    title IV, Sec. 401, Jan. 6, 1988, 101 Stat. 1635; amended Pub. L.
    100-399, title IV, Sec. 401(u), Aug. 17, 1988, 102 Stat. 998.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 2093, Pub. L. 92-181, title II, Sec. 2.12, Dec.
    10, 1971, 85 Stat. 598; Pub. L. 96-592, title II, Sec. 208, Dec.
    24, 1980, 94 Stat. 3442; Pub. L. 99-205, title II, Sec. 205(e)(11),
    Dec. 23, 1985, 99 Stat. 1704; Pub. L. 100-233, title VII, Sec.
    705(d), Jan. 6, 1988, 101 Stat. 1707; Pub. L. 100-399, title VI,
    Sec. 604, Aug. 17, 1988, 102 Stat. 1006, related to general
    corporate powers, prior to the general amendment of this subchapter
    by Pub. L. 100-233, Sec. 401.
                                 AMENDMENTS
      1988 - Par. (7). Pub. L. 100-399, Sec. 401(u)(1), substituted
    ''provide by its board of directors for'' for ''elect by its board
    of directors'' and ''serve as'' for ''be elected or designated''.
      Par. (8). Pub. L. 100-399, Sec. 401(u)(2), amended par. (8)
    generally.  Prior to amendment, par. (8) read as follows:
    ''prescribe by its board of directors, association bylaws, not
    inconsistent with law, providing for the classes of association
    stock and the manner in which such stock shall be issued,
    transferred, and retired; the officers and employees of the
    association elected or provided for, the property of the
    association that is acquired, held, and transferred, the general
    business of the association conducted, and the privileges granted
    to the association by law exercised and enjoyed;''.
      Par. (12). Pub. L. 100-399, Sec. 401(u)(3), substituted ''agreed
    to by'' for ''agreed to or delegated to''.
      Par. (22). Pub. L. 100-399, Sec. 401(u)(4)-(6), added par. (22).
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective immediately after
    amendment made by section 401 of Pub. L. 100-233, which was
    effective 6 months after Jan. 6, 1988, see section 1001(b) of Pub.
    L. 100-399, set out as a note under section 2002 of this title.
 
-CITE-
    12 USC Sec. 2094                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER II - FARM CREDIT ASSOCIATIONS
    Part B - Federal Land Bank Associations
 
-HEAD-
    Sec. 2094. Federal land bank association capitalization
 
-STATUTE-
      In accordance with section 2154a of this title, the Federal land
    bank association shall provide, through its bylaws and subject to
    Farm Credit Administration regulations, for its capitalization and
    the manner in which its stock shall be issued, held, transferred,
    and retired and its earnings distributed.
 
-SOURCE-
    (Pub. L. 92-181, title II, Sec. 2.13, as added Pub. L. 100-233,
    title IV, Sec. 401, Jan. 6, 1988, 101 Stat. 1636.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 2094, Pub. L. 92-181, title II, Sec. 2.13, Dec.
    10, 1971, 85 Stat. 599; Pub. L. 96-592, title II, Sec. 209, Dec.
    24, 1980, 94 Stat. 3442; Pub. L. 99-205, title II, Sec.
    205(e)(12)-(14), title III, Sec. 304(b), Dec. 23, 1985, 99 Stat.
    1705, 1708; Pub. L. 100-233, title VIII, Sec. 805(h), Jan. 6, 1988,
    101 Stat. 1715, related to stock and participation certificates,
    prior to the general amendment of this subchapter by Pub. L.
    100-233, Sec. 401.
 
-CITE-
    12 USC Sec. 2095                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER II - FARM CREDIT ASSOCIATIONS
    Part B - Federal Land Bank Associations
 
-HEAD-
    Sec. 2095. Repealed. Pub. L. 100-399, title IV, Sec. 401(v), Aug.
        17, 1988, 102 Stat. 999
 
-MISC1-
      Section, Pub. L. 92-181, title II, Sec. 2.14, as added Pub. L.
    100-233, title IV, Sec. 401, Jan. 6, 1988, 101 Stat. 1636, provided
    that whenever any Federal land bank association was liquidated, a
    sum equal to its reserve account as required in this chapter was to
    be paid and become the property of the bank in which such
    association was a shareholder.
      A prior section 2095, Pub. L. 92-181, title II, Sec. 2.14, Dec.
    10, 1971, 85 Stat. 600; Pub. L. 99-205, title II, Sec. 205(e)(15),
    title VI, Sec. 605, Dec. 23, 1985, 99 Stat. 1705, 1711, related to
    application of earnings, restoration of capital impairment, and
    surplus account, prior to the general amendment of this subchapter
    by Pub. L. 100-233, Sec. 401.
                           CONSTRUCTION OF REPEAL
      Section 401(v) of Pub. L. 100-399 repealed this section and
    provided that this chapter be applied and administered as if this
    section had not been enacted.
 
-CITE-
    12 USC Sec. 2096                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER II - FARM CREDIT ASSOCIATIONS
    Part B - Federal Land Bank Associations
 
-HEAD-
    Sec. 2096. Agreements for sharing gains or losses
 
-STATUTE-
      Each Farm Credit Bank may enter into agreements with Federal land
    bank associations in its district for sharing the gain or losses on
    loans or on security held therefor or acquired in liquidation
    thereof, and associations are authorized to enter into any such
    agreements and also, subject to bank approval, agreements with
    other associations in the district for sharing the risk of loss on
    loans endorsed by each such association.  As may be authorized by
    the bank in accordance with regulations of the Farm Credit
    Administration, associations also may enter into agreements with
    other Farm Credit System institutions to share loan and other
    losses, whether to protect against capital impairment or for any
    other purpose.
 
-SOURCE-
    (Pub. L. 92-181, title II, Sec. 2.14, formerly Sec. 2.15, as added
    Pub. L. 100-233, title IV, Sec. 401, Jan. 6, 1988, 101 Stat. 1636;
    renumbered Sec. 2.14, Pub. L. 100-399, title IV, Sec. 401(w), Aug.
    17, 1988, 102 Stat. 999.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 2096, Pub. L. 92-181, title II, Sec. 2.15, Dec.
    10, 1971, 85 Stat. 601; Pub. L. 96-592, title II, Sec. 210, Dec.
    24, 1980, 94 Stat. 3442; Pub. L. 99-205, title II, Sec. 205(b),
    Dec. 23, 1985, 99 Stat. 1703; Pub. L. 100-233, title IV, Sec.
    431(f), title VIII, Sec. 805(i), Jan. 6, 1988, 101 Stat. 1660,
    1715; Pub. L. 100-399, title IV, Sec. 415(b), Aug. 17, 1988, 102
    Stat. 1004, related to short- and intermediate-term loans,
    participation, other financial assistance, terms, conditions,
    interest, and security, prior to the general amendment of this
    subchapter by Pub. L. 100-233, Sec. 401.
      A prior section 2.14 of Pub. L. 92-181 was classified to section
    2095 of this title and was repealed by Pub. L. 100-399, Sec.
    401(v).
 
-CITE-
    12 USC Sec. 2097                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER II - FARM CREDIT ASSOCIATIONS
    Part B - Federal Land Bank Associations
 
-HEAD-
    Sec. 2097. Liens on stock
 
-STATUTE-
      Each Federal land bank association shall have a first lien on the
    stock and participation certificates it issues, except on stock or
    participation certificates held by other Farm Credit System
    institutions, for the payment of any liability of the stockholder
    to the association or to the bank, or to both of them.
 
-SOURCE-
    (Pub. L. 92-181, title II, Sec. 2.15, formerly Sec. 2.16, as added
    Pub. L. 100-233, title IV, Sec. 401, Jan. 6, 1988, 101 Stat. 1637;
    renumbered Sec. 2.15, Pub. L. 100-399, title IV, Sec. 401(w), Aug.
    17, 1988, 102 Stat. 999.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 2097, Pub. L. 92-181, title II, Sec. 2.16, Dec.
    10, 1971, 85 Stat. 602; Pub. L. 96-592, title II, Sec. 211, Dec.
    24, 1980, 94 Stat. 3443, related to other services, prior to the
    general amendment of this subchapter by Pub. L. 100-233, Sec. 401.
      A prior section 2.15 of Pub. L. 92-181 was renumbered section
    2.14 and is classified to section 2096 of this title.
 
-CITE-
    12 USC Sec. 2098                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER II - FARM CREDIT ASSOCIATIONS
    Part B - Federal Land Bank Associations
 
-HEAD-
    Sec. 2098. Taxation
 
-STATUTE-
      Each Federal land bank association and the capital, reserves, and
    surplus thereof, and the income derived therefrom, shall be exempt
    from Federal, State, municipal, and local taxation, except taxes on
    real estate held by a Federal land bank association to the same
    extent, according to its value, as other similar property held by
    other persons is taxed.  The mortgages held by the Federal land
    bank associations and the notes, bonds, debentures, and other
    obligations issued by the associations shall be considered and held
    to be instrumentalities of the United States and, as such, they and
    the income therefrom shall be exempt from all Federal, State,
    municipal, and local taxation, other than Federal income tax
    liability of the holder thereof under the Public Debt Act of 1941
    (31 U.S.C. 3124).
 
-SOURCE-
    (Pub. L. 92-181, title II, Sec. 2.16, formerly Sec. 2.17, as added
    Pub. L. 100-233, title IV, Sec. 401, Jan. 6, 1988, 101 Stat. 1637;
    renumbered Sec. 2.16 and amended Pub. L. 100-399, title IV, Sec.
    401(w), (x), Aug. 17, 1988, 102 Stat. 999.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 2098, Pub. L. 92-181, title II, Sec. 2.17, Dec.
    10, 1971, 85 Stat. 602; Pub. L. 99-205, title II, Sec. 205(e)(16),
    Dec. 23, 1985, 99 Stat. 1705; Pub. L. 100-233, title VIII, Sec.
    805(j), Jan. 6, 1988, 101 Stat. 1715, related to taxation, prior to
    the general amendment of this subchapter by Pub. L. 100-233, Sec.
    401.
      A prior section 2.16 of Pub. L. 92-181 was renumbered section
    2.15 and is classified to section 2097 of this title.
                                 AMENDMENTS
      1988 - Pub. L. 100-399, Sec. 401(x), substituted ''derived
    therefrom, shall'' for ''derived therefrom shall'', ''by the
    associations'' for ''by the banks'', and ''3124'' for ''742(a)''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective immediately after
    amendment made by section 401 of Pub. L. 100-233, which was
    effective 6 months after Jan. 6, 1988, see section 1001(b) of Pub.
    L. 100-399, set out as a note under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2214 of this title.
 
-CITE-
    12 USC SUBCHAPTER III - BANKS FOR COOPERATIVES               01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER III - BANKS FOR COOPERATIVES
    .
 
-HEAD-
    SUBCHAPTER III - BANKS FOR COOPERATIVES
 
-SECREF-
                  SUBCHAPTER REFERRED TO IN OTHER SECTIONS
      This subchapter is referred to in section 2206a of this title.
 
-CITE-
    12 USC Part A - Banks for Cooperatives                       01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER III - BANKS FOR COOPERATIVES
    Part A - Banks for Cooperatives
    .
 
-HEAD-
    Part A - Banks for Cooperatives
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-233, title IV, Sec. 415(1), Jan. 6, 1988, 101
    Stat. 1642, inserted part A heading.
 
-CITE-
    12 USC Sec. 2121                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER III - BANKS FOR COOPERATIVES
    Part A - Banks for Cooperatives
 
-HEAD-
    Sec. 2121. Establishment; titles; branches
 
-STATUTE-
      The banks for cooperatives established pursuant to sections 2 and
    30 of the Farm Credit Act of 1933, as amended, shall continue as
    federally chartered instrumentalities of the United States. The
    Farm Credit Administration shall approve amendments consistent with
    this chapter to charters and organizational certificates of banks
    for cooperatives.  Unless an existing bank for cooperatives is
    merged with another bank, there shall be a bank for cooperatives in
    each farm credit district and a Central Bank for Cooperatives. A
    bank for cooperatives may include in its title the name of the city
    in which it is located or other geographical designation.  The
    Central Bank for Cooperatives may be located in such place as its
    board of directors may determine with the approval of the Farm
    Credit Administration. When authorized by the Farm Credit
    Administration each bank for cooperatives may establish such
    branches or other offices as may be appropriate for the effective
    operation of its business.
 
-SOURCE-
    (Pub. L. 92-181, title III, Sec. 3.0, Dec. 10, 1971, 85 Stat. 602;
    Pub. L. 100-233, title IV, Sec. 414(b), title VIII, Sec. 802(m),
    Jan. 6, 1988, 101 Stat. 1641, 1711; Pub. L. 100-399, title IV, Sec.
    406(b), title IX, Sec. 901(c), Aug. 17, 1988, 102 Stat. 1000,
    1007.)
 
-REFTEXT-
                             REFERENCES IN TEXT
      Sections 2 and 30 of the Farm Credit Act of 1933, as amended,
    referred to in text, were classified to sections 1134 and 1134f,
    respectively, of this title prior to their repeal by section 5.26
    of Pub. L. 92-181, which enacted this chapter.
 
-MISC2-
                                 AMENDMENTS
      1988 - Pub. L. 100-399, Sec. 901(c), substituted ''merged with
    another bank'' for ''merged with one or more other such banks under
    section 2181 of this title''.
      Pub. L. 100-233, Sec. 802(m), substituted ''The Farm Credit
    Administration shall approve amendments consistent with this
    chapter to charters and organizational certificates of banks for
    cooperatives'' for ''Their charters or organization certificates
    may be modified from time to time by the Farm Credit
    Administration, not inconsistent with the provisions of this
    subchapter, as may be necessary or expedient to implement this
    chapter''.
      Pub. L. 100-233, Sec. 414(b), which designated existing
    provisions as subsec. (a), and added subsec. (b) reading ''Each
    bank for cooperatives shall elect from its voting stockholders a
    board of directors of such number, for such term, in such manner,
    and with such qualifications as may be required in its bylaws,
    except that, at least one member shall be elected by the other
    directors, which member shall not be a director, officer, employee,
    or stockholder of a System institution.'', was repealed by section
    406(b) of Pub. L. 100-399. See Construction of 1988 Amendment note
    below.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
                       CONSTRUCTION OF 1988 AMENDMENT
      Section 406(b) of Pub. L. 100-399 provided that section 414(b) of
    Pub. L. 100-233, cited as a credit to this section, is repealed and
    that the Agricultural Credit Act of 1987 (Pub. L. 100-233) and this
    chapter shall be applied and administered as if such section had
    not been enacted.
                 VOLUNTARY MERGER OF BANKS FOR COOPERATIVES
      Section 413 of Pub. L. 100-233, as amended by Pub. L. 100-399,
    title IV, Sec. 405, Aug. 17, 1988, 102 Stat. 1000, provided that:
      ''(a) Submission of Proposal. -
        ''(1) Special committee. -
          ''(A) In general. - Not later than 15 days after the date of
        the enactment of this section (Jan. 6, 1988), a special
        committee shall be selected pursuant to subparagraph (B), for
        the purpose of developing a proposal for the voluntary merger
        of the banks for cooperatives.
          ''(B) Composition. - The special committee selected under
        subparagraph (A) shall be composed of -
            ''(i) one member of each district board elected by the
          voting stockholders of the bank for cooperatives in the
          district; and
            ''(ii) one member chosen from the board of directors of the
          Central Bank for Cooperatives by the board of such Bank.
          ''(C) Development of plan. - Not later than 75 days after the
        date of the enactment of this section (Jan. 6, 1988), the
        special committee shall develop a plan of merger for all such
        banks and the Central Bank for Cooperatives into a National
        Bank for Cooperatives.
        ''(2) Prerequisites to merger. -
          ''(A) Submission to fca. - On completion of the plan of
        merger pursuant to paragraph (1)(C), the special committee
        shall submit the proposed plan, together with all information
        that is to be distributed to the stockholders concerning such
        plan, to the Farm Credit Administration for approval.
          ''(B) Expedited review. - Not later than 30 days after the
        Farm Credit Administration receives the plan of merger, the
        Administration shall promptly review such plan and advise the
        special committee concerning any required changes that are
        necessary to the plan.
        ''(3) Submission to stockholders. - On approval of the plan by
      the Farm Credit Administration, the special committee shall,
      under such procedures as may be established by the committee,
      submit the plan and recommendations to all voting stockholders of
      the district banks for cooperatives and the Central Bank for
      Cooperatives.
      ''(b) Voting Requirements. -
        ''(1) Majority vote required. - An approval of the plan of
      merger developed and submitted under subsection (a) shall -
          ''(A) require a majority vote of the stockholders of each
        district bank for cooperatives voting, in person or by proxy,
        at a duly authorized stockholders' meeting, computed both -
            ''(i) in accordance with the requirement that, except as
          provided in section 3.3(d) (12 U.S.C. 2124(d)), each
          cooperative that is the holder of voting stock in the bank
          for cooperatives shall be entitled to cast one vote; and
            ''(ii) on the basis of the total equity interests in the
          bank (including allocated, but not unallocated, surplus and
          reserves) held by such stockholders;
          ''(B) require a majority vote of the voting stockholders of
        the Central Bank for Cooperatives voting on a one-bank-one-vote
        basis;
          ''(C) take place not later than 180 days after the date of
        the enactment of this section (Jan. 6, 1988); and
          ''(D) take place prior to any other merger vote involving a
        bank for cooperatives.
        ''(2) Approval by all banks for cooperatives. - If the
      stockholders of all of the banks for cooperatives approve the
      merger, the merger shall take place.
        ''(3) Effect of lesser vote. - If the stockholders of more than
      one but fewer than all of the banks approve the plan, each such
      bank whose stockholders voted to approve the merger shall be
      merged into a single bank for cooperatives, as provided in
      paragraphs (4) or (5).
        ''(4) National bank for cooperatives. -
          ''(A) Creation. - If the stockholders of eight or more of the
        district banks for cooperatives approve the merger, such banks,
        and the Central Bank for Cooperatives, shall be merged into a
        single bank, which shall be referred to as the 'National Bank
        for Cooperatives'.
          ''(B) Services provided. - The National Bank for Cooperatives
        may offer credit and related services to eligible borrowers
        located within any territory that may be served by Farm Credit
        System institutions under section 5.0 (12 U.S.C. 2221), or to
        any borrower otherwise eligible under section 3.7(b) (12 U.S.C.
        2128(b)).
        ''(5) United Bank for Cooperatives. -
          ''(A) Creation. - If the stockholders of more than one but
        fewer than eight of the district banks approve the plan, each
        such bank, and the Central Bank for Cooperatives (if approved
        by a numerical majority of its stockholders), shall be merged
        into a single bank, which shall be referred to as the 'United
        Bank for Cooperatives'.
          ''(B) Services provided. - The United Bank for Cooperatives
        shall offer credit and related services only in the territory
        included, as of the date of the enactment of this section (Jan.
        6, 1988), within the boundaries of the districts that had been
        served by the constituent banks of the United Bank for
        Cooperatives, and to any borrower otherwise eligible under
        section 3.7(b) (12 U.S.C. 2128(b)).
        ''(6) Nonconsenting banks. -
          ''(A) In general. -
            ''(i) National bank for cooperatives. - Any of the district
          banks whose stockholders did not approve the plan of merger
          may offer credit and related services to any eligible
          borrowers within any territory or area that may be served by
          the National Bank.
            ''(ii) United bank for cooperatives. - Any of the district
          banks whose stockholders did not approve the plan of merger
          shall continue as district banks for cooperatives and shall
          continue to serve only the territory within the boundaries of
          the district that such banks served as of the date of the
          enactment of this section (Jan. 6, 1988).
          ''(B) Nondiscrimination. - Any district bank whose
        stockholders did not approve the plan of merger shall be
        entitled to the availability, from the National Bank for
        Cooperatives or the United Bank for Cooperatives, as the case
        may be, of the same credit and related services now provided by
        the Central Bank for Cooperatives as of the date of the
        enactment of this section (Jan. 6, 1988), regardless of the
        decision not to merge.
          ''(C) Subsequent mergers. - Any district bank referred to in
        subparagraph (A) may subsequently merge with the National Bank
        for Cooperatives or the United Bank for Cooperatives, as the
        case may be, on the approval of the voting stockholders of both
        banks proposing to merge based on the voting requirement of
        subsection (b)(1).
      ''(c) References. - References in this section to voting
    stockholders shall include subscribers to the guaranty fund.''
              BANK FOR COOPERATIVES INITIAL BOARD OF DIRECTORS
      Section 414(a) of Pub. L. 100-233, as amended by Pub. L. 100-399,
    title IV, Sec. 406(a), Aug. 17, 1988, 102 Stat. 1000, provided
    that: ''Notwithstanding section 3.2 (probably means section 3.2 of
    Pub. L. 92-181, 12 U.S.C. 2123), the initial board of each district
    bank for cooperatives shall be composed of the members of the
    district board (which is dissolved upon the creation of the
    district Farm Credit Bank) elected by the stockholders of the bank
    for cooperatives and one member elected by the other two members,
    which member shall not be a director, officer, employee, or
    stockholder of a System institution.  The initial board shall
    operate for such term as is agreed to by the members of the board,
    except that such period shall not exceed two years.  Thereafter,
    the board shall be elected and serve in accordance with section 3.0
    of the Farm Credit Act of 1971 (12 U.S.C. 2121).''
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2206a of this title.
 
-CITE-
    12 USC Sec. 2122                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER III - BANKS FOR COOPERATIVES
    Part A - Banks for Cooperatives
 
-HEAD-
    Sec. 2122. Corporate existence; general corporate powers
 
-STATUTE-
      Each bank for cooperatives shall be a body corporate and, subject
    to regulation by the Farm Credit Administration, shall have power
    to -
      (1) Adopt and use a corporate seal.
      (2) Have succession until dissolved under the provisions of this
    chapter or other Act of Congress.
      (3) Make contracts.
      (4) Sue and be sued.
      (5) Acquire, hold, dispose, and otherwise exercise all of the
    usual incidents of ownership of real and personal property
    necessary or convenient to its business.
      (6) Make loans and commitments for credit, provide services and
    other assistance as authorized in this chapter, and charge fees
    therefor.
      (7) Operate under the direction of its board of directors.
      (8) Elect by its board of directors a president, any vice
    presidents, a secretary, a treasurer, and provide for such other
    officers, employees, and agents as may be necessary, including
    joint employees as provided in this chapter, define their duties
    and require surety bonds or make other provisions against losses
    occasioned by employees.
      (9) Prescribe by its board of directors its bylaws not
    inconsistent with law providing for the classes of its stock and
    the manner in which its stock shall be issued, transferred, and
    retired; its officers, employees, or agents elected or provided
    for; its property acquired, held, and transferred; its loans made;
    its general business conducted; and the privileges granted it by
    law exercised and enjoyed.
      (10) Borrow money and issue notes, bonds, debentures, or other
    obligations individually or in concert with one or more other banks
    of the System, of such character, and such terms, conditions, and
    rates of interest as may be determined.
      (11)(A) Participate in loans under this subchapter with one or
    more other banks for cooperatives and with commercial banks and
    other financial institutions upon such terms as may be agreed among
    them, and participate with one or more other Farm Credit System
    institutions in loans made under this subchapter or other
    subchapters of this chapter on the basis prescribed in section 2206
    of this title.
      (B)(i) Participate in any loan of a type otherwise authorized
    under this subchapter that is made to a similar entity by any
    institution in the business of extending credit, including
    purchases of participations in loans to finance international trade
    transactions involving the sale of agricultural commodities or the
    products thereof, except that -
        (I) a bank for cooperatives may not participate in a loan -
          (aa) if the participation would cause the total amount of all
        loan participations by the bank under this subparagraph
        involving a single credit risk to exceed 10 percent of the
        bank's total capital; or
          (bb) if the participation by the bank will itself equal or
        exceed 50 percent of the principal of the loan or, when taken
        together with participations in the loan by other Farm Credit
        System institutions, will cause the cumulative amount of the
        participations by all Farm Credit System institutions in the
        loan to equal or exceed 50 percent of the principal of the
        loan;
        (II) a bank for cooperatives may not participate in a loan to a
      similar entity under this subparagraph if the similar entity has
      a loan or loan commitment outstanding with a Farm Credit Bank or
      an association chartered under this chapter, unless agreed to by
      the Bank or association; and
        (III) the cumulative amount of participations that a bank for
      cooperatives may have outstanding under this subparagraph at any
      time may not exceed 15 percent of the bank's total assets.
      (ii) As used in this subparagraph, the term ''similar entity''
    means an entity that, while not eligible for a loan under section
    2129 of this title, is functionally similar to an entity eligible
    for a loan under section 2129 of this title in that it derives a
    majority of its income from, or has a majority of its assets
    invested in, the conduct of activities functionally similar to
    those conducted by the entity.
      (iii) With respect to similar entities that are eligible to
    borrow from a Farm Credit Bank or association under subchapter I or
    II of this chapter, the authority of a bank for cooperatives to
    participate in loans to the entities under this subparagraph shall
    be subject to the prior approval of the Farm Credit Bank or Banks
    in whose chartered territory the entity is eligible to borrow.  The
    approval may be granted on an annual basis and under such terms and
    conditions as may be agreed on between the bank for cooperatives
    and the Farm Credit Bank or Banks that serve the territory.
      (iv) As used in this subparagraph, the term ''participate'' or
    ''participation'' refers to multilender transactions, including
    syndications, assignments, loan participations, subparticipations,
    or other forms of the purchase, sale, or transfer of interests in
    loans, other extensions of credit, or other technical and financial
    assistance.
      (12) Deposit its securities and its current funds with any member
    bank of the Federal Reserve System or any insured State nonmember
    bank (within the meaning of section 1813 of this title) or, to the
    extent necessary to facilitate transactions which may be financed
    under section 2128(b) of this title, any other financial
    organization, domestic or foreign, as may be authorized by its
    board of directors, and pay fees therefor and receive interest
    thereon as may be agreed.  When designated for that purpose by the
    Secretary of the Treasury, it shall be a depository of public
    money, except receipts from customs, under such regulations as may
    be prescribed by the Secretary; may be employed as a fiscal agent
    of the Government, and shall perform all such reasonable duties as
    a depository of public money or financial agent of the Government
    as may be required of it.  No Government funds deposited under the
    provisions of this subsection shall be invested in loans or bonds
    or other obligations of the bank.
      (13)(A) Buy and sell obligations of or insured by the United
    States or of any agency thereof, or securities backed by the full
    faith and credit of any such agency and make such other investments
    as may be authorized under regulations issued by the Farm Credit
    Administration.
      (B) As may be authorized by its board of directors, buy from and
    sell to Farm Credit System institutions interests in loans and in
    other financial assistance extended and nonvoting stock.
      (C) As may be authorized by its board of directors, and solely
    for the purposes of obtaining credit information and other services
    needed to facilitate transactions which may be financed under
    section 2128(b) of this title, invest in ownership interests in
    foreign business entities that are principally engaged in providing
    credit information to and performing such servicing functions for
    their members in connection with the members' international
    activities.
      (14) Conduct studies and adopt standards for lending.
      (15) Amend and modify loan contracts, documents, and payment
    schedules, and release, subordinate, or substitute security for any
    of them.
      (16) Exercise by its board of directors or authorized officers,
    employees, or agents all such incidental powers as may be necessary
    or expedient to carry on the business of the bank.
      (17) As may be authorized by the board of directors, maintain
    credit balances and pay or receive fees or interest thereon, for
    the purpose of assisting in the transfer of funds to or from
    parties to transactions that may be financed under section 2128(b)
    of this title: Provided, however, That nothing herein shall
    authorize the banks for cooperatives to engage in the business of
    accepting domestic deposits.
      (18) As may be authorized by its board of directors, agree with
    other Farm Credit System institutions to share loan or other
    losses, whether to protect against capital impairment or for any
    other purpose.
 
-SOURCE-
    (Pub. L. 92-181, title III, Sec. 3.1, Dec. 10, 1971, 85 Stat. 602;
    Pub. L. 96-592, title III, Sec. 301, Dec. 24, 1980, 94 Stat. 3443;
    Pub. L. 99-205, title II, Sec. 205(e)(1), Dec. 23, 1985, 99 Stat.
    1705; Pub. L. 100-233, title VIII, Sec. 802(n), Jan. 6, 1988, 101
    Stat. 1712; Pub. L. 100-399, title IX, Sec. 901(b), Aug. 17, 1988,
    102 Stat. 1007; Pub. L. 102-552, title V, Sec. 502, Oct. 28, 1992,
    106 Stat. 4130; Pub. L. 103-376, Sec. 2, 6, Oct. 19, 1994, 108
    Stat. 3497, 3500.)
 
-MISC1-
                                 AMENDMENTS
      1994 - Par. (11)(B)(i)(I)(bb). Pub. L. 103-376, Sec. 6,
    substituted ''other Farm Credit System institutions'' for ''the
    other banks for cooperatives under this subparagraph'' and ''all
    Farm Credit System institutions'' for ''all banks for
    cooperatives''.
      Par. (11)(B)(iv). Pub. L. 103-376, Sec. 2, added cl. (iv).
      1992 - Par. (11). Pub. L. 102-552 designated existing provisions
    as subpar. (A) and added subpar. (B).
      1988 - Par. (12). Pub. L. 100-399 substituted ''(within the
    meaning of section 1813 of this title)'' for ''as defined in
    section 1812 of this title.''
      Pars. (12), (13)(B), (C), (17), (18). Pub. L. 100-233 struck out
    ''and approved by the Farm Credit Administration'' after ''board of
    directors''.
      1985 - Pub. L. 99-205 substituted ''regulation'' for
    ''supervision'' in provision preceding par. (1).
      Par. (13)(A). Pub. L. 99-205 inserted ''under regulations
    issued'' after ''authorized''.
      Pars. (16) to (19). Pub. L. 99-205 struck out par. (16)
    respecting power of bank for cooperatives to perform any function
    delegated to it by the Farm Credit Administration, and redesignated
    pars. (17) to (19) as (16) to (18), respectively.
      1980 - Par. (11). Pub. L. 96-592, Sec. 301(1), inserted
    provisions respecting participation with one or more other Farm
    Credit System institutions in loans.
      Par. (12). Pub. L. 96-592, Sec. 301(2), inserted applicability to
    any insured State nonmember bank and to other domestic or foreign
    financial organizations.
      Par. (13). Pub. L. 96-592, Sec. 301(3), designated existing
    provisions as subpar. (A) and added subpars. (B) and (C).
      Pars. (18), (19). Pub. L. 96-592, Sec. 301(4), added pars. (18)
    and (19).
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
 
-CITE-
    12 USC Sec. 2123                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER III - BANKS FOR COOPERATIVES
    Part A - Banks for Cooperatives
 
-HEAD-
    Sec. 2123. Board of directors
 
-STATUTE-
      (a)(1) Each bank for cooperatives not merged into the United Bank
    for Cooperatives or the National Bank for Cooperatives shall elect
    a board of directors of such number, for such term, in such manner,
    and with such qualifications as may be required in its bylaws,
    except that at least one member shall be elected by the other
    directors, which member shall not be a director, officer, employee,
    or stockholder of a System institution.
      (2)(A) If approved by the stockholders through a bylaw amendment,
    the nomination and election of one member from a bank for
    cooperatives (other than the National Bank for Cooperatives) shall
    be carried out with each voting stockholder of a bank for
    cooperatives having one vote, plus a number of votes (or fractional
    part thereof) equal to -
        (i) the number of stockholders eligible to vote; multiplied by
        (ii) the percentage (or fractional part thereof) of the total
      equity interest (including allocated, but not unallocated,
      surplus and reserves) in the bank of all stockholders held by the
      individual voting stockholder at the close of the immediately
      preceding fiscal year of the bank.
      (B) The total number of votes under this paragraph shall be the
    number of voting stockholders of a bank for cooperatives multiplied
    by two.
      (b) The board of directors of the Central Bank for Cooperatives
    shall consist of one member elected by the board of each bank for
    cooperatives, including the United Bank for Cooperatives if the
    Central Bank for Cooperatives is not merged into such bank, and one
    member appointed by the Farm Credit Administration.
 
-SOURCE-
    (Pub. L. 92-181, title III, Sec. 3.2, Dec. 10, 1971, 85 Stat. 603;
    Pub. L. 99-205, title II, Sec. 205(e)(2), Dec. 23, 1985, 99 Stat.
    1705; Pub. L. 100-399, title IX, Sec. 901(d), Aug. 17, 1988, 102
    Stat. 1007; Pub. L. 102-552, title V, Sec. 503, Oct. 28, 1992, 106
    Stat. 4130.)
 
-MISC1-
                                 AMENDMENTS
      1992 - Subsec. (a). Pub. L. 102-552 designated existing
    provisions as par. (1) and added par. (2).
      1988 - Subsec. (a). Pub. L. 100-399 amended subsec. (a)
    generally.  Prior to amendment, subsec. (a) read as follows: ''In
    the case of a district bank for cooperatives, the board of
    directors shall be the farm credit district board and in the case
    of the Central Bank for Cooperatives shall be a separate board of
    not more than thirteen members, one from each farm credit district
    and one at large.  One district director of the Central Bank Board
    shall be elected by each district farm credit board and the member
    at large shall be appointed by the Farm Credit Administration.''
      Subsec. (b). Pub. L. 100-399 amended subsec. (b) generally.
    Prior to amendment, subsec. (b) read as follows: ''For the purposes
    of this section the provisions of sections 2222(b) and (c), 2225,
    2226, and 2227 of this title shall apply to and shall be the
    authority of the Central Bank for Cooperatives the same as though
    it were a district bank.''
      1985 - Subsec. (a). Pub. L. 99-205 substituted ''Farm Credit
    Administration'' for ''Governor with the advice and consent of the
    Federal Farm Credit Board''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective immediately after
    amendment made by section 401 of Pub. L. 100-233, which was
    effective 6 months after Jan. 6, 1988, see section 1001(b) of Pub.
    L. 100-399, set out as a note under section 2002 of this title.
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
 
-CITE-
    12 USC Sec. 2124                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER III - BANKS FOR COOPERATIVES
    Part A - Banks for Cooperatives
 
-HEAD-
    Sec. 2124. Stock of banks for cooperatives
 
-STATUTE-
    (a) Amount
      The Capital stock of each bank for cooperatives shall be in such
    amount as its board determines is required for the purpose of
    providing adequate capital to permit the bank to meet the credit
    needs of borrowers from the bank and such amounts may be increased
    or decreased from time to time in accordance with such needs.
    (b) Value
      The capital stock of each bank shall be divided into shares of
    par value of $100 each and may be of such classes as the board may
    determine.  Such stock may be issued in fractional shares.
    (c) Eligible holders of voting stock
      Voting stock may be issued or transferred to and held only by (i)
    cooperative associations eligible to borrow from the banks and (ii)
    other banks for cooperatives, and shall not be otherwise
    transferred, pledged, or hypothecated except as consented to by the
    issuing bank under regulations of the Farm Credit Administration.
    (d) Entitlement to vote
      Each holder of one or more shares of voting stock which is
    eligible to borrow from a bank for cooperatives shall be entitled
    only to one vote and only in the affairs of the bank in the
    district in which its principal office is located unless otherwise
    authorized under regulations issued by the Farm Credit
    Administration, except that if such holder has not been a borrower
    from the bank in which it holds such stock within a period of two
    years next preceding the date fixed by the Farm Credit
    Administration prior to the commencement of voting, it shall not be
    entitled to vote.
    (e) Nonvoting investment stock
      Nonvoting investment stock may be issued in such series and in
    such amounts as may be determined by the board and may be exchanged
    for voting stock or sold or transferred to any person subject to
    the approval of the issuing bank.
    (f) Participation certificates
      Participation certificates may be issued to parties to whom
    voting stock may not be issued.
 
-SOURCE-
    (Pub. L. 92-181, title III, Sec. 3.3, Dec. 10, 1971, 85 Stat. 603;
    Pub. L. 96-592, title III, Sec. 302, Dec. 24, 1980, 94 Stat. 3443;
    Pub. L. 99-205, title II, Sec. 205(e)(3), (4), Dec. 23, 1985, 99
    Stat. 1705; Pub. L. 100-233, title VIII, Sec. 802(o), 805(k), Jan.
    6, 1988, 101 Stat. 1712, 1715.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Subsec. (a). Pub. L. 100-233, Sec. 802(o)(1), struck out
    '', with the approval of Farm Credit Administration,'' after
    ''board determines''.
      Subsec. (b). Pub. L. 100-233, Sec. 802(o)(2), struck out ''with
    the approval of the Farm Credit Administration'' after ''board may
    determine''.
      Subsec. (d). Pub. L. 100-233, Sec. 805(k), substituted ''by'' for
    ''by by'' after ''regulations issued''.
      Subsec. (e). Pub. L. 100-233, Sec. 802(o)(3), struck out ''and
    approved by the Farm Credit Administration'' after ''Board''.
      1985 - Subsec. (d). Pub. L. 99-205, Sec. 205(e)(3), inserted
    ''under regulations issued by'' after ''authorized''.
      Subsec. (e). Pub. L. 99-205, Sec. 205(e)(4), struck out '',
    except for stock held by the Governor,'' before ''may be
    exchanged''.
      1980 - Subsec. (f). Pub. L. 96-592 added subsec. (f).
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2142 of this title.
 
-CITE-
    12 USC Sec. 2125                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER III - BANKS FOR COOPERATIVES
    Part A - Banks for Cooperatives
 
-HEAD-
    Sec. 2125. Dividends
 
-STATUTE-
      Dividends may be payable only on nonvoting investment stock, if
    declared by the board of directors of the bank, subject to the
    general direction of the Farm Credit Administration.
 
-SOURCE-
    (Pub. L. 92-181, title III, Sec. 3.4, Dec. 10, 1971, 85 Stat. 604;
    Pub. L. 99-205, title II, Sec. 205(e)(5), title VI, Sec. 606, Dec.
    23, 1985, 99 Stat. 1705, 1711; Pub. L. 100-233, title VIII, Sec.
    805(l), Jan. 6, 1988, 101 Stat. 1715.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-233 struck out ''other than stock held by the
    Farm Credit Administration,'' after ''investment stock,''.
      1985 - Pub. L. 99-205 struck out ''the Governor of'' before ''the
    Farm Credit Administration'' and inserted '', subject to the
    general direction of the Farm Credit Administration''.
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
 
-CITE-
    12 USC Sec. 2126                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER III - BANKS FOR COOPERATIVES
    Part A - Banks for Cooperatives
 
-HEAD-
    Sec. 2126. Retirement of stock
 
-STATUTE-
      Nonvoting investment stock and participation certificates may be
    called for retirement at par.  With the approval of the issuing
    bank, the holder may elect not to have the called stock or
    participation certificates retired in response to a call, reserving
    the right to have such stock or participation certificates included
    in the next call for retirement.  Voting stock may also be retired
    at par, on call or on such revolving basis as the board may
    determine with due regard for its total capital needs: Provided,
    however, That all equities in the district banks issued or
    allocated with respect to 1971 and prior years shall be retired on
    a revolving basis according to the year of issue with the oldest
    outstanding equities being first retired.  Equities issued for
    subsequent years shall not be called or retired until equities
    described in the preceding sentence of this proviso have been
    retired.
 
-SOURCE-
    (Pub. L. 92-181, title III, Sec. 3.5, Dec. 10, 1971, 85 Stat. 604;
    Pub. L. 96-592, title III, Sec. 303, Dec. 24, 1980, 94 Stat. 3444;
    Pub. L. 99-205, title II, Sec. 205(e)(6), Dec. 23, 1985, 99 Stat.
    1705; Pub. L. 100-233, title VIII, Sec. 802(p), Jan. 6, 1988, 101
    Stat. 1712.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-233 struck out ''with approval of the Farm
    Credit Administration'' after ''board may determine''.
      1985 - Pub. L. 99-205 substituted ''Nonvoting investment stock''
    for ''Any nonvoting stock held by the Governor of the Farm Credit
    Administration shall be retired to the extent required by section
    2151(b) of this title before any other outstanding voting or
    nonvoting stock or participation certificates shall be retired
    except as may be otherwise authorized by the Farm Credit
    Administration. When those requirements have been satisfied,
    nonvoting investment stock'', and substituted ''Voting'' for ''When
    the requirements of section 2151(b) of this title have been met,
    voting''.
      1980 - Pub. L. 96-592 inserted provisions respecting
    applicability to participation certificates and struck out
    provisions relating to maximum amount of fair book value at
    retirement.
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2132 of this title.
 
-CITE-
    12 USC Sec. 2127                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER III - BANKS FOR COOPERATIVES
    Part A - Banks for Cooperatives
 
-HEAD-
    Sec. 2127. Guaranty fund subscriptions in lieu of stock
 
-STATUTE-
      If any cooperative association is not authorized under the laws
    of the State in which it is organized to take and hold stock in a
    bank for cooperatives, the bank shall, in lieu of any requirement
    for stock purchase, require the association to pay into or have on
    deposit in a guaranty fund, or the bank may retain out of the
    amount of the loan and credit to the guaranty fund account of the
    borrower, a sum equal to the amount of stock which the association
    would otherwise be required to own.  Each reference to stock of the
    banks for cooperatives in this chapter shall include such guaranty
    fund equivalents.  The holder of the guaranty fund equivalent and
    the bank shall each be entitled to the same rights and obligations
    with respect thereto as the rights and obligations associated with
    the class or classes of stock involved.
 
-SOURCE-
    (Pub. L. 92-181, title III, Sec. 3.6, Dec. 10, 1971, 85 Stat. 604.)
 
-CITE-
    12 USC Sec. 2128                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER III - BANKS FOR COOPERATIVES
    Part A - Banks for Cooperatives
 
-HEAD-
    Sec. 2128. Loans, commitments, and technical and financial
        assistance
 
-STATUTE-
    (a) Authorities
      The banks for cooperatives are authorized to make loans and
    commitments to eligible cooperative associations and to extend to
    them other technical and financial assistance at any time (whether
    or not they have a loan from the bank outstanding), including but
    not limited to discounting notes and other obligations, guarantees,
    currency exchange necessary to service individual transactions that
    may be financed under subsection (b) of this section, collateral
    custody, or participation with other banks for cooperatives and
    commercial banks or other financial institutions in loans to
    eligible cooperatives, under such terms and conditions as may be
    determined to be feasible by the board of directors of each bank
    for cooperatives under regulations of the Farm Credit
    Administration. Such regulations may include provisions for
    avoiding duplication between the Central Bank and district banks
    for cooperatives.  Each bank may own and lease, or lease with
    option to purchase, to stockholders eligible to borrow from the
    bank equipment needed in the operations of the stockholder and may
    make or participate in loans or commitments and extend other
    technical and financial assistance to other domestic parties for
    the acquisition of equipment and facilities to be leased to such
    stockholders for use in their operations in the United States.
    (b) Additional authorities
      (1) A bank for cooperatives is authorized to make or participate
    in loans and commitments to, and to extend other technical and
    financial assistance to a domestic or foreign party with respect to
    its transactions with an association that is a voting stockholder
    of the bank for the import of agricultural commodities or products
    thereof, farm supplies, or aquatic products through purchases,
    sales or exchanges, if the bank for cooperatives determines, under
    regulations of the Farm Credit Administration, that the voting
    stockholder will benefit substantially as a result of such loan,
    commitment, or assistance.
      (2)(A) A bank for cooperatives may make or participate in loans
    and commitments to, and extend other technical and financial
    assistance to -
        (i) any domestic or foreign party for the export, including
      (where applicable) the cost of freight, of agricultural
      commodities or products thereof, farm supplies, or aquatic
      products from the United States under policies and procedures
      established by the bank to ensure that the commodities, products,
      or supplies are originally sourced, where reasonably available,
      from one or more eligible cooperative associations described in
      section 2129(a) of this title on a priority basis, except that if
      the total amount of the balances outstanding on loans made by a
      bank under this clause that -
          (I) are made to finance the export of commodities, products,
        or supplies that are not originally sourced from a cooperative,
        and
          (II) are not guaranteed or insured, in an amount equal to at
        least 95 percent of the amount loaned, by a department, agency,
        bureau, board, commission, or establishment of the United
        States or a corporation wholly-owned directly or indirectly by
        the United States,
      exceeds an amount that is equal to 50 percent of the bank's
      capital, then a sufficient interest in the loans shall be sold by
      the bank for cooperatives to commercial banks and other
      non-System lenders to reduce the total amount of such outstanding
      balances to an amount not greater than an amount equal to 50
      percent of the bank's capital; and
        (ii) except as provided in subparagraph (B), any domestic or
      foreign party in which an eligible cooperative association
      described in section 2129(a) of this title (including, for the
      purpose of facilitating its domestic business operations only, a
      cooperative or other entity described in section 2129(b)(1)(A) of
      this title) has an ownership interest, for the purpose of
      facilitating the domestic or foreign business operations of the
      association, except that if the ownership interest by an eligible
      cooperative association, or associations, is less than 50
      percent, the financing shall be limited to the percentage held in
      the party by the association or associations.
      (B) A bank for cooperatives shall not use the authority provided
    in subparagraph (A)(ii) to provide financial assistance to a party
    for the purpose of financing the relocation of a plant or facility
    from the United States to another country.
      (3) A bank for cooperatives is authorized to provide such
    services as may be customary and normal in maintaining
    relationships with domestic or foreign entities to facilitate the
    activities specified in paragraphs (1) and (2), consistent with
    this chapter.
    (c) Applicable policies
      Loans, commitments, and assistance authorized by subsection (b)
    of this section shall be extended in accordance with policies
    adopted by the board of directors of the bank under regulations of
    the Farm Credit Administration.
    (d) Regulatory limitations
      The regulations of the Farm Credit Administration implementing
    subsection (b) of this section and other provisions of this
    subchapter relating to the authority under subsection (b) of this
    section may not confer upon the banks for cooperatives powers and
    authorities greater than those specified in this subchapter.  The
    Farm Credit Administration shall, during the formulation of such
    regulations, closely consult on a continuing basis with the Board
    of Governors of the Federal Reserve System to insure that such
    regulations conform to national banking policies, objectives, and
    limitations.
    (e) Speculative futures transactions
      Notwithstanding any other provision of this subchapter, the banks
    for cooperatives shall not make or participate in loans or
    commitments for the purpose of financing speculative futures
    transactions by eligible borrowers in foreign currencies.
    (f) Installation, expansion, or improvement of water and waste
        disposal facilities
      The banks for cooperatives may, for the purpose of installing,
    maintaining, expanding, improving, or operating water and waste
    disposal facilities in rural areas, make and participate in loans
    and commitments and extending other technical and financial
    assistance to -
        (1) cooperatives formed specifically for the purpose of
      establishing or operating such facilities; and
        (2) public and quasi-public agencies and bodies, and other
      public and private entities that, under authority of State or
      local law, establish or operate such facilities.
    For purposes of this subsection, the term ''rural area'' means all
    territory of a State that is not within the outer boundary of any
    city or town having a population of more than 20,000 based on the
    latest decennial census of the United States.
 
-SOURCE-
    (Pub. L. 92-181, title III, Sec. 3.7, Dec. 10, 1971, 85 Stat. 605;
    Pub. L. 96-592, title III, Sec. 304, Dec. 24, 1980, 94 Stat. 3444;
    Pub. L. 101-624, title XXIII, Sec. 2323(a), Nov. 28, 1990, 104
    Stat. 4013; Pub. L. 102-237, title V, Sec. 502(e)(1), Dec. 13,
    1991, 105 Stat. 1868; Pub. L. 102-552, title V, Sec. 504, 505, Oct.
    28, 1992, 106 Stat. 4131; Pub. L. 103-376, Sec. 3, Oct. 19, 1994,
    108 Stat. 3497.)
 
-MISC1-
                                 AMENDMENTS
      1994 - Subsec. (b)(1). Pub. L. 103-376, Sec. 3(A), substituted
    ''assistance to'' for ''assistance to (A)'', ''bank for the
    import'' for ''bank for the export or import'', and ''if the bank
    for cooperatives'' for ''and (B) a domestic or foreign party in
    which such an association has at least the minimum ownership
    interest approved under regulations of the Farm Credit
    Administration for the purpose of facilitating the association's
    export or import operations of the type described in subparagraph
    (A): Provided, That a'' bank for cooperatives''.
      Subsec. (b)(2). Pub. L. 103-376, Sec. 3(B), added par. (2) and
    struck out former par. (2) which read as follows: ''A bank for
    cooperatives is authorized to make or participate in loans and
    commitments, and to extend other technical and financial
    assistance, to any domestic or foreign entity that is eligible for
    a guarantee or insurance as described in subparagraphs (A) and (B)
    with respect to transactions involving the Soviet Union (its
    successor entities or any of the individual republics of the Soviet
    Union) or an emerging democracy (as defined in section 1542(f) of
    the Food, Agriculture, Conservation, and Trade Act of 1990 (7
    U.S.C. 5622 note)) for the export of agricultural commodities and
    products thereof from the United States, including (where
    applicable) the cost of freight, if in each case -
        ''(A) the loan involved is unconditionally guaranteed or
      insured by a department, agency, bureau, board, commission, or
      establishment of the United States or any corporation wholly
      owned directly or indirectly by the United States; and
        ''(B) the guarantee or insurance -
          ''(i) covers at least 95 percent of the amount loaned for the
        purchase of the commodities or products; and
          ''(ii) is issued on or before September 30, 1995.''
      1992 - Subsec. (a). Pub. L. 102-552, Sec. 504, inserted ''at any
    time (whether or not they have a loan from the bank outstanding)''
    after ''assistance'' in first sentence.
      Subsec. (f). Pub. L. 102-552, Sec. 505, in introductory
    provisions, substituted ''installing, maintaining, expanding,
    improving, or operating'' for ''the installation, expansion, or
    improvement of'' and ''extending'' for ''to extend''.
      1991 - Subsec. (b). Pub. L. 102-237 designated existing
    provisions as par. (1), redesignated cl. (1) as (A) and inserted
    ''or products thereof'' after ''commodities'', redesignated cl. (2)
    as (B) and substituted ''subparagraph (A)'' for ''clause (1) of
    this subsection'', and added pars. (2) and (3).
      1990 - Subsec. (f). Pub. L. 101-624 added subsec. (f).
      1980 - Pub. L. 96-592 designated existing provisions as subsec.
    (a), inserted provisions relating to currency exchanges and
    provisions relating to loans, etc., to domestic parties, and added
    subsecs. (b) to (e).
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2122, 2129, 2252 of this
    title.
 
-CITE-
    12 USC Sec. 2129                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER III - BANKS FOR COOPERATIVES
    Part A - Banks for Cooperatives
 
-HEAD-
    Sec. 2129. Eligibility
 
-STATUTE-
      (a) Any association of farmers, producers or harvesters of
    aquatic products, or any federation of such associations, which is
    operated on a cooperative basis, and has the powers for processing,
    preparing for market, handling, or marketing farm or aquatic
    products; or for purchasing, testing, grading, processing,
    distributing, or furnishing farm or aquatic supplies or furnishing
    farm or aquatic business services or services to eligible
    cooperatives and conforms to either of the two following
    requirements:
        (1) no member of the association is allowed more than one vote
      because of the amount of stock or membership capital he may own
      therein; or
        (2) does not pay dividends on stock or membership capital in
      excess of such per centum per annum as may be approved under
      regulations of the Farm Credit Administration; and in any case
        (3) does not deal in farm products or aquatic products, or
      products processed therefrom, farm or aquatic supplies, farm or
      aquatic business services, or services to eligible cooperatives
      with or for nonmembers in an amount greater in value than the
      total amount of such business transacted by it with or for
      members, excluding from the total of member and nonmember
      business transactions with the United States or any agency or
      instrumentality thereof or services or supplies furnished as a
      public utility; and
        (4) a percentage of the voting control of the association not
      less than 80 per centum (60 per centum (A) in the case of rural
      electric, telephone, public utility, and service cooperatives;
      (B) in the case of local farm supply cooperatives that have
      historically served needs of the community that would not
      adequately be served by other suppliers and have experienced a
      reduction in the percentage of farmer membership due to changed
      circumstances beyond their control such as, but not limited to,
      urbanization of the community; and (C) in the case of local farm
      supply cooperatives that provide or will provide needed services
      to a community and that are or will be in competition with a
      cooperative specified in paragraph (B)) or, with respect to any
      type of association or cooperative, such higher percentage as
      established by the bank board, is held by farmers, producers or
      harvesters of aquatic products, or eligible cooperative
      associations as defined herein;
    shall be eligible to borrow from a bank for cooperatives.  Any such
    association that has received a loan from a bank for cooperatives
    shall, without regard to the requirements of paragraphs (1) through
    (4), continue to be eligible for so long as more than 50 percent
    (or such higher percentage as is established by the bank board) of
    the voting control of the association is held by farmers, producers
    or harvesters of aquatic products, or eligible cooperative
    associations.
      (b) Notwithstanding any other provision of this section:
        (1) The following entities shall also be eligible to borrow
      from a bank for cooperatives:
          (A) Cooperatives and other entities that have received a
        loan, loan commitment, or loan guarantee from the Rural
        Electrification Administration, or a loan or loan commitment
        from the Rural Telephone Bank, or that are eligible under the
        Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.) for a
        loan, loan commitment, or loan guarantee from the
        Administration or the Bank (or a successor of the
        Administration or the Bank), and subsidiaries of such
        cooperatives or other entities.
          (B) Any legal entity that (i) holds more than 50 percent of
        the voting control of an association or other entity that is
        eligible to borrow from a bank for cooperatives under
        subsection (a) of this section or subparagraph (A) of this
        paragraph, and (ii) borrows for the purpose of making funds
        available to that association or entity, and makes funds
        available to that association or entity under the same terms
        and conditions that the funds are borrowed from a bank for
        cooperatives.
          (C) Any cooperative or other entity described in subsection
        (b) or (f) of section 2128 of this title.
          (D) Any creditworthy private entity that satisfies the
        requirements for a service cooperative under paragraphs (1),
        (2), and (4), or under the last sentence, of subsection (a) of
        this section and subsidiaries of the entity, if the entity is
        organized to benefit agriculture in furtherance of the welfare
        of its farmer-members and is operated on a not-for-profit
        basis.
        (2) Notwithstanding the provisions of section 2130 of this
      title, the board of directors of a bank for cooperatives may
      determine that, with respect to a loan to any borrower eligible
      to borrow from a bank under paragraph (1)(A) that is fully
      guaranteed by the United States, no stock purchase requirement
      shall apply, other than the requirement that a borrower eligible
      to own voting stock shall purchase one share of such stock.
        (3) Each association and other entity eligible to borrow from a
      bank for cooperatives under this subsection, for purposes of
      section 2128(a) of this title, shall be treated as an eligible
      cooperative association and a stockholder eligible to borrow from
      the bank.
        (4) Nothing in this subsection shall be construed to adversely
      affect the eligibility, as it existed on January 6, 1988, of
      cooperatives and other entities for any other credit assistance
      under Federal law.
 
-SOURCE-
    (Pub. L. 92-181, title III, Sec. 3.8, Dec. 10, 1971, 85 Stat. 605;
    Pub. L. 94-184, Sec. 1(a), Dec. 31, 1975, 89 Stat. 1060; Pub. L.
    96-592, title III, Sec. 305, Dec. 24, 1980, 94 Stat. 3445; Pub. L.
    99-198, title XIII, Sec. 1322, Dec. 23, 1985, 99 Stat. 1534; Pub.
    L. 100-233, title IV, Sec. 421, title VIII, Sec. 805(m), Jan. 6,
    1988, 101 Stat. 1654, 1715; Pub. L. 100-399, title IV, Sec. 410,
    title IX, Sec. 901(e), Aug. 17, 1988, 102 Stat. 1003, 1007; Pub. L.
    101-624, title XXIII, Sec. 2323(b), Nov. 28, 1990, 104 Stat. 4013;
    Pub. L. 102-237, title V, Sec. 502(e)(2), (f), Dec. 13, 1991, 105
    Stat. 1869; Pub. L. 102-552, title V, Sec. 506, Oct. 28, 1992, 106
    Stat. 4131; Pub. L. 103-376, Sec. 4, Oct. 19, 1994, 108 Stat. 3498;
    Pub. L. 104-105, title II, Sec. 204, 205, Feb. 10, 1996, 110 Stat.
    172.)
 
-REFTEXT-
                             REFERENCES IN TEXT
      The Rural Electrification Act of 1936, referred to in subsec.
    (b)(1)(A), is act May 20, 1936, ch. 432, 49 Stat. 1363, as amended,
    which is classified generally to chapter 31 (Sec. 901 et seq.) of
    Title 7, Agriculture. For complete classification of this Act to
    the Code, see section 901 of Title 7 and Tables.
 
-MISC2-
                                 AMENDMENTS
      1996 - Subsec. (a). Pub. L. 104-105, Sec. 204(a), inserted at end
    ''Any such association that has received a loan from a bank for
    cooperatives shall, without regard to the requirements of
    paragraphs (1) through (4), continue to be eligible for so long as
    more than 50 percent (or such higher percentage as is established
    by the bank board) of the voting control of the association is held
    by farmers, producers or harvesters of aquatic products, or
    eligible cooperative associations.''
      Subsec. (b)(1)(A). Pub. L. 104-105, Sec. 205, substituted ''are
    eligible under the Rural Electrification Act of 1936 (7 U.S.C. 901
    et seq.) for'' for ''have been certified by the Administrator of
    the Rural Electrification Administration to be eligible for such''
    and ''loan guarantee from the Administration or the Bank (or a
    successor of the Administration or the Bank), and'' for ''loan
    guarantee, and''.
      Subsec. (b)(1)(D). Pub. L. 104-105, Sec. 204(b), substituted
    ''and (4), or under the last sentence, of subsection (a) of this
    section'' for ''and (4) of subsection (a) of this section''.
      1994 - Subsec. (b)(1)(B) to (E). Pub. L. 103-376 redesignated
    subpars. (C) to (E) as (B) to (D), respectively, realigned margin
    of subpar. (D), and struck out former subpar. (B) which read as
    follows: ''Any legal entity more than 50 percent of the voting
    control of which is held by one or more associations or other
    entities that are eligible to borrow from a bank for cooperatives
    under subsection (a) of this section or subparagraph (A) of this
    paragraph, except that any such legal entity, when considered
    together with one or more such associations or other entities that
    hold such control, meet the requirement of subsection (a)(3) of
    this section.''
      1992 - Subsec. (b)(1)(E). Pub. L. 102-552 added subpar. (E).
      1991 - Subsec. (a)(4). Pub. L. 102-237, Sec. 502(f)(1),
    substituted ''a percentage'' for ''A percentage''.
      Subsec. (b)(1)(D). Pub. L. 102-237, Sec. 502(e)(2), (f)(2),
    substituted ''subsection (b) or (f) of section 2128 of this title''
    for ''section 2128(f) of this title'' and realigned margin of
    subpar. (D).
      1990 - Subsec. (b)(1)(D). Pub. L. 101-624 added subpar. (D).
      1988 - Pub. L. 100-399, Sec. 901(e), substituted ''bank board''
    for ''district board'' in subsec. (a)(4).
      Pub. L. 100-399, Sec. 410, substituted ''makes'' for ''make'' in
    subsec. (b)(1)(C).
      Pub. L. 100-233, Sec. 805(m), redesignated subsec. (1) as subsec.
    (a) and pars. (a) to (d) as pars. (1) to (4), respectively, in par.
    (4) redesignated cls. (1) to (3) as (A) to (C), respectively, and
    in cl. (C) substituted ''paragraph (B)'' for ''paragraph (2)''.
      Pub. L. 100-233, Sec. 421, added subsec. (b) and struck out
    former subsec. (2) which read as follows: ''Notwithstanding any
    other provision of this subchapter, cooperatives and other entities
    that have received a loan, loan commitment, or loan guarantee from
    the Rural Electrification Administration, or a loan or loan
    commitment from the Rural Telephone Bank, or that have been
    certified by the Administrator of the Rural Electrification
    Administration to be eligible for such a loan, loan commitment, or
    loan guarantee, and subsidiaries of such cooperatives or other
    entities, shall also be eligible to borrow from a bank for
    cooperatives.''
      1985 - Pub. L. 99-198, Sec. 1322(1), designated existing
    provisions as subsec. (1) and added subsec. (2).
      1980 - Pub. L. 96-592, Sec. 305(1), inserted reference to aquatic
    business in introductory text.
      Subsec. (c). Pub. L. 96-592, Sec. 305(2), inserted reference to
    aquatic business services or services to eligible cooperatives.
      Subsec. (d). Pub. L. 96-592, Sec. 305(3), substituted ''60'' for
    ''70'', and designated former parenthetical material as item (1),
    and added items (2) and (3) and limitation with respect to any type
    of association or cooperative.
      1975 - Subsec. (d). Pub. L. 94-184 inserted provision relating to
    70 per centum of voting control in the case of rural electric,
    telephone, and public utility cooperatives.
                      EFFECTIVE DATE OF 1991 AMENDMENT
      Amendment by section 502(f) of Pub. L. 102-237 effective as if
    included in the provision of the Food, Agriculture, Conservation,
    and Trade Act of 1990, Pub. L. 101-624, to which the amendment
    relates, see section 1101(b)(4) of Pub. L. 102-237, set out as a
    note under section 1421 of Title 7, Agriculture.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2122, 2128 of this title.
 
-CITE-
    12 USC Sec. 2130                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER III - BANKS FOR COOPERATIVES
    Part A - Banks for Cooperatives
 
-HEAD-
    Sec. 2130. Ownership of stock by borrowers
 
-STATUTE-
      (a) Each borrower entitled to hold voting stock shall, at the
    time a loan is made by a bank for cooperatives, own at least one
    share of voting stock and shall be required by the bank to invest
    in additional voting stock or nonvoting investment stock at that
    time, or from time to time, as the lending bank may determine, but
    the requirement for investment in stock at the time the loan is
    closed shall not exceed an amount equal to 10 per centum of the
    face amount of the loan.  Such additional ownership requirements
    may be based on the face amount of the loan, the outstanding loan
    balance or on a percentage of the interest payable by the borrower
    during any year or during any quarter thereof, or upon such other
    basis as the bank determines will provide adequate capital for the
    operation of the bank and equitable ownership thereof among
    borrowers.  In the case of a direct loan by the Central Bank, the
    borrower shall be required to own or invest in the necessary stock
    in a district bank or banks and such district bank shall be
    required to own a corresponding amount of stock in the Central
    Bank, but voting stock shall be in the one district bank,
    designated by the Farm Credit Administration.
      (b) Notwithstanding the provisions of subsection (a) of this
    section, the purchase of stock need not be required with respect to
    that part of any loan made by a bank for cooperatives which it
    sells to or makes in participation with financial institutions
    other than any of the banks for cooperatives.  In such cases the
    distribution of earnings of the bank for cooperatives shall be on
    the basis of the interest in the loan retained by such bank.
 
-SOURCE-
    (Pub. L. 92-181 title III, Sec. 3.9, Dec. 10, 1971, 85 Stat. 605;
    Pub. L. 96-592, title III, Sec. 306, Dec. 24, 1980, 94 Stat. 3445;
    Pub. L. 100-233, title VIII, Sec. 802(q), Jan. 6, 1988, 101 Stat.
    1712.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Subsec. (a). Pub. L. 100-233 substituted ''by the bank to
    invest'' for ''by the bank with the approval of the Farm Credit
    Administration to invest'', ''or upon such other basis as the bank
    determines'' for ''or upon such other basis as the bank, with the
    approval of the Farm Credit Administration, determines'', and ''in
    a district bank or banks and such district bank shall be required''
    for ''in a district bank or banks as may be approved by the Farm
    Credit Administration and such district bank shall be required''.
      1980 - Subsec. (a). Pub. L. 96-592 inserted provisions respecting
    entitlement to hold voting stock.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2129 of this title.
 
-CITE-
    12 USC Sec. 2131                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER III - BANKS FOR COOPERATIVES
    Part A - Banks for Cooperatives
 
-HEAD-
    Sec. 2131. Loans
 
-STATUTE-
    (a) Interest rates and charges
      Loans made by a bank for cooperatives shall bear interest at a
    rate or rates determined by the board of directors of the bank from
    time to time.  In setting rates and charges, it shall be the
    objective to provide the types of credit needed by eligible
    borrowers at the lowest reasonable cost on a sound business basis,
    taking into account the net cost of money to the bank, necessary
    reserves and expenses of the bank, and services provided.  The loan
    documents may provide for the interest rate or rates to vary from
    time to time during the repayment period of the loan, in accordance
    with the rate or rates currently being charged by the bank.
    (b) Security
      Loans shall be made upon such terms, conditions, and security, if
    any, as may be determined by the bank in accordance with
    regulations of the Farm Credit Administration.
    (c) Lien
      Each bank for cooperatives shall have a first lien on all stock
    or other equities in the bank as collateral for the payment of any
    indebtedness of the owner thereof to the bank.  In the case of a
    direct loan to an eligible cooperative by the Central Bank, the
    Central Bank shall have a first lien on the stock and equities of
    the borrower in the district bank and the district bank shall have
    a lien thereon junior only to the lien of the Central Bank.
    (d) Cancellation; application on indebtedness
      In any case where the debt of a borrower is in default, or in any
    case of liquidation or dissolution of a present or former borrower
    from a bank for cooperatives, the bank may, but shall not be
    required to, retire and cancel all or a part of the stock,
    allocated surplus or contingency reserves, or any other equity in
    the bank owned by or allocated to such borrower, at the fair market
    value thereof not exceeding par, and, to the extent required in
    such cases, corresponding shares and allocations and other equity
    interests held by a district bank in another district bank on
    account of such indebtedness, shall be retired or equitably
    adjusted.  In no event shall the bank's equities be retired or
    canceled if the retirement or cancellation would adversely affect
    the bank's capital structure, as determined by the Farm Credit
    Administration.
 
-SOURCE-
    (Pub. L. 92-181, title III, Sec. 3.10, Dec. 10, 1971, 85 Stat. 606;
    Pub. L. 96-592, title III, Sec. 307, Dec. 24, 1980, 94 Stat. 3445;
    Pub. L. 99-509, title I, Sec. 1033(c), Oct. 21, 1986, 100 Stat.
    1877.)
 
-MISC1-
                                 AMENDMENTS
      1986 - Subsec. (a). Pub. L. 99-509 struck out '', with the
    approval of the Farm Credit Administration as provided in section
    2205 of this title'' after ''from time to time''.
      1980 - Subsec. (a). Pub. L. 96-592, Sec. 307(1), inserted
    reference to section 2205 of this title.
      Subsec. (d). Pub. L. 96-592, Sec. 307(2), substituted ''market''
    for ''book'' and inserted provisions respecting retirement or
    cancellation of equities as affected by the capital structure.
 
-CITE-
    12 USC Sec. 2132                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER III - BANKS FOR COOPERATIVES
    Part A - Banks for Cooperatives
 
-HEAD-
    Sec. 2132. Earnings and reserves; application of savings
 
-STATUTE-
    (a) Application of savings
      At the end of each fiscal year, the net savings shall, under
    regulations prescribed by the Farm Credit Administration, continue
    to be applied on a cooperative basis with provision for sound,
    adequate capitalization to meet the changing financing needs of
    eligible cooperative borrowers and prudent corporate fiscal
    management, to the end that current year's patrons carry their fair
    share of the capitalization, ultimate expenses, and reserves
    related to the year's operations and the remaining net savings
    shall be distributed as patronage refunds as provided in
    subsections (b) and (c) of this section.  Such regulations may
    provide for application of net savings to the restoration or
    maintenance of an allocated surplus account, reasonable additions
    to unallocated surplus, or to unallocated reserves after payment of
    operating expenses, and provide for allocations to patrons not
    qualified under title 26, or payment of such per centum of
    patronage refunds in cash, as the board may determine.
    (b) Patronage refunds
      The net savings of each district bank for cooperatives, after the
    earnings for the fiscal year have been applied in accordance with
    subsection (a) of this section shall be paid in stock,
    participation certificates, or cash, or in any of them, as
    determined by its board, as patronage refunds to borrowers to whom
    such refunds are payable who are borrowers of the fiscal year for
    which such patronage refunds are distributed.  Except as provided
    in subsection (c) below, all patronage refunds shall be paid in
    proportion that the amount of interest and service fees on the
    loans to each borrower during the year bears to the interest and
    service fees on the loans of all borrowers during the year or on
    such other proportionate patronage basis as may be approved by the
    board of directors.
    (c) Savings of Central Bank for Cooperatives
      The net savings of the Central Bank for Cooperatives after the
    earnings for the fiscal year have been applied in accordance with
    subsection (a) of this section shall be paid in stock or cash, or
    both, as determined by the board, as patronage refunds to the
    district banks on the basis of interests held by the Central Bank
    in loans made by the district banks and upon any direct loans made
    by the Central Bank to cooperative associations, or on such other
    proportionate patronage basis as may be approved by the board of
    directors.  In cases of direct loans, such refund shall be paid to
    the district bank or banks which issued their stock to the borrower
    incident to such loans, and the district bank or banks shall issue
    a like amount of patronage refunds to the borrower.
    (d) Loss carryover
      In the event of a net loss in any fiscal year after providing for
    all operating expenses (including reasonable valuation reserves and
    losses in excess of any applicable reserves), such loss may be
    carried forward or carried back, if appropriate, or otherwise shall
    be absorbed by charges to unallocated reserve or surplus accounts
    established after December 10, 1971; charges to allocated
    contingency reserve account; charges to allocated surplus accounts;
    charges to other contingency reserve and surplus accounts; the
    impairment of voting stock; or the impairment of all other stock.
    (e) Charge of unrecognized costs or expenses to reserve, surplus,
        or patronage allocations
      Notwithstanding any other provisions of this section any costs or
    expenses attributable to a prior year or years but not recognized
    in determining the net savings for such year or years may be
    charged to reserves or surplus of the bank or to patronage
    allocations for such years, as may be determined by the board of
    directors.
    (f) Payment of patronage refunds in cash
      A bank for cooperatives may pay in cash such portion of its
    patronage refunds as will permit its taxable income to be
    determined without taking into account savings applied as allocated
    surplus, allocated contingency reserves, and patronage refunds
    under subsection (a) of this section.
 
-SOURCE-
    (Pub. L. 92-181, title III, Sec. 3.11, Dec. 10, 1971, 85 Stat. 606;
    Pub. L. 96-592, title III, Sec. 308, Dec. 24, 1980, 94 Stat. 3445;
    Pub. L. 99-205, title II, Sec. 205(e)(7), (8), Dec. 23, 1985, 99
    Stat. 1705; Pub. L. 100-233, title VIII, Sec. 802(r), 805(n), Jan.
    6, 1988, 101 Stat. 1712, 1716.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Subsec. (a). Pub. L. 100-233, Sec. 802(r)(1), 805(n)(1),
    (5), redesignated subsec. (b) as (a), substituted ''(b) and (c)''
    for ''(c) and (d)'', struck out ''as may be approved by the Farm
    Credit Administration'' after ''payment of operating expenses'',
    and struck out at end ''If during the fiscal year but not at the
    end thereof a bank shall have had outstanding capital stock held by
    the United States, provision will be made for payment of franchise
    taxes required in section 2151 of this title.''
      Subsec. (b). Pub. L. 100-233, Sec. 802(r)(2), 805(n)(2), (5),
    redesignated subsec. (c) as (b) and substituted ''(a) of this
    section'' for ''(b) of this section, whichever is applicable,'',
    ''(c) below'' for ''(d) below'', and ''may be approved by the board
    of directors'' for ''the Farm Credit Administration may approve''.
    Former subsec. (b) redesignated (a).
      Subsec. (c). Pub. L. 100-233, Sec. 802(r)(3), 805(n)(3), (5),
    redesignated subsec. (d) as (c) and substituted ''(a) of this
    section'' for ''(b) of this section whichever is applicable,'' and
    ''may be approved by the board of directors'' for ''the Farm Credit
    Administration may approve''.  Former subsec. (c) redesignated (b).
      Subsecs. (d), (e). Pub. L. 100-233, Sec. 805(n)(5), redesignated
    subsecs. (e) and (f) as (d) and (e), respectively.  Former subsec.
    (d) redesignated (c).
      Subsecs. (f), (g). Pub. L. 100-233, Sec. 805(n)(4), (5),
    redesignated subsec. (g) as (f), substituted ''A bank for
    cooperatives'' for ''For any year that a bank for cooperatives is
    subject to Federal income tax, it'', and struck out ''or (b)''
    after ''subsection (a)''. Former subsec. (f) redesignated (e).
      1985 - Subsec. (a). Pub. L. 99-205, Sec. 205(e)(7), struck out
    subsec. (a) which provided for application of savings when bank for
    cooperatives has outstanding stock held by the Governor.
      Subsec. (b). Pub. L. 99-205, Sec. 205(e)(8)(A), substituted ''At
    the end of each fiscal year, the net'' for ''Whenever at the end of
    any fiscal year a bank for cooperatives shall have no outstanding
    capital stock held by the Governor of the Farm Credit
    Administration, the net''.
      Subsecs. (c), (d). Pub. L. 99-205, Sec. 205(e)(8)(B), substituted
    ''subsection (b) of this section'' for ''subsection (a) or (b) of
    this section''.
      1980 - Subsec. (b). Pub. L. 96-592, Sec. 308(1), struck out
    provisions relating to 25 per centum requirement for net savings.
      Subsec. (c). Pub. L. 96-592, Sec. 308(2), inserted applicability
    to participation certificates and to borrowers to whom refunds are
    payable.
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
 
-CITE-
    12 USC Sec. 2133                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER III - BANKS FOR COOPERATIVES
    Part A - Banks for Cooperatives
 
-HEAD-
    Sec. 2133. Distribution of assets on liquidation or dissolution
 
-STATUTE-
      In the case of liquidation or dissolution of any bank for
    cooperatives, after payment or retirement, first, of all
    liabilities; second, of all capital stock issued before January 1,
    1956, at par, and all nonvoting stock at par; and third, all voting
    stock at par; any surplus and reserves existing on January 1, 1956,
    shall be paid to the holders of stock issued before that date, and
    voting stock pro rata; and any remaining allocated surplus and
    reserves shall be distributed to those entities to which they are
    allocated on the books of the bank, and any other remaining surplus
    shall be paid to the holders of outstanding voting stock.  If it
    should become necessary to use any surplus or reserves to pay any
    liabilities or to retire any capital stock, unallocated reserves or
    surplus, allocated reserves and surplus shall be exhausted in
    accordance with rules prescribed by the Farm Credit Administration.
 
-SOURCE-
    (Pub. L. 92-181, title III, Sec. 3.12, Dec. 10, 1971, 85 Stat. 608;
    Pub. L. 99-205, title II, Sec. 205(e)(9), Dec. 23, 1985, 99 Stat.
    1705; Pub. L. 100-233, title VIII, Sec. 805(o), Jan. 6, 1988, 101
    Stat. 1716.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-233 inserted ''the'' before ''Farm Credit
    Administration''.
      1985 - Pub. L. 99-205 struck out '', any stock held by the
    Governor of the Farm Credit Administration at par'' before '', and
    all nonvoting stock at par'', and struck out ''stock held by the
    Governor of the Farm Credit Administration,'' before ''and voting
    stock pro rata'' in first sentence.
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
 
-CITE-
    12 USC Sec. 2134                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER III - BANKS FOR COOPERATIVES
    Part A - Banks for Cooperatives
 
-HEAD-
    Sec. 2134. Taxation
 
-STATUTE-
      Each bank for cooperatives and its obligations are
    instrumentalities of the United States and as such any and all
    notes, debentures, and other obligations issued by such bank shall
    be exempt, both as to principal and interest from all taxation
    (except surtaxes, estate, inheritance, and gift taxes) now or
    hereafter imposed by the United States or any State, territorial,
    or local taxing authority, except that interest on such obligations
    shall be subject to Federal income taxation in the hands of the
    holder.
 
-SOURCE-
    (Pub. L. 92-181, title III, Sec. 3.13, Dec. 10, 1971, 85 Stat. 608;
    Pub. L. 99-205, title II, Sec. 205(e)(10), Dec. 23, 1985, 99 Stat.
    1705; Pub. L. 100-233, title VIII, Sec. 805(p), Jan. 6, 1988, 101
    Stat. 1716.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-233 inserted before period at end '', except
    that interest on such obligations shall be subject to Federal
    income taxation in the hands of the holder''.
      1985 - Pub. L. 99-205 struck out last two sentences relating to
    exemption of banks for cooperatives and their property, franchises,
    capital, reserves, surplus, other funds, and income from Federal
    and non-Federal taxation except for Federal income taxation of
    interest on obligations of such banks and for Federal and
    non-Federal taxation of real and tangible personal property of such
    banks to same extent as similar property is taxed, and making such
    exemption provisions applicable only for any year or part thereof
    in which stock in such banks was held by the Governor of the Farm
    Credit Administration.
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2214 of this title.
 
-CITE-
    12 USC Part B - United and National Banks for
                  Cooperatives                                   01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER III - BANKS FOR COOPERATIVES
    Part B - United and National Banks for Cooperatives
    .
 
-HEAD-
    Part B - United and National Banks for Cooperatives
 
-CITE-
    12 USC Sec. 2141                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER III - BANKS FOR COOPERATIVES
    Part B - United and National Banks for Cooperatives
 
-HEAD-
    Sec. 2141. Charter, powers, and operation
 
-STATUTE-
    (a) Charter
      The National Bank for Cooperatives or the United Bank for
    Cooperatives, as the case may be (hereinafter in this part referred
    to as the ''consolidated bank''), established under section 413 of
    the Agricultural Credit Act of 1987, shall be a federally chartered
    instrumentality of the United States and an institution of the Farm
    Credit System.
    (b) Powers
      The consolidated bank and the board of directors of such bank
    shall have all of the powers, rights, responsibilities, and
    obligations of the district banks for cooperatives and the Central
    Bank for Cooperatives and the boards of directors of such banks,
    except as otherwise provided for in this chapter.
    (c) Operation
      The consolidated bank shall be organized and operated on a
    cooperative basis.
 
-SOURCE-
    (Pub. L. 92-181, title III, Sec. 3.20, as added Pub. L. 100-233,
    title IV, Sec. 415(2), Jan. 6, 1988, 101 Stat. 1642; amended Pub.
    L. 100-399, title IV, Sec. 407(a), (b), Aug. 17, 1988, 102 Stat.
    1000.)
 
-REFTEXT-
                             REFERENCES IN TEXT
      Section 413 of the Agricultural Credit Act of 1987, referred to
    in subsec. (a), is section 413 of Pub. L. 100-233, as amended,
    which is set out as a note under section 2121 of this title.
 
-MISC2-
                                 AMENDMENTS
      1988 - Subsec. (a). Pub. L. 100-399, Sec. 407(a), struck out ''in
    this section'' after ''referred to'' and inserted '', established
    under section 413 of the Agricultural Credit Act of 1987,'' before
    ''shall''.
      Subsec. (b). Pub. L. 100-399, Sec. 407(b), inserted ''except''
    before ''as otherwise''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-CITE-
    12 USC Sec. 2142                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER III - BANKS FOR COOPERATIVES
    Part B - United and National Banks for Cooperatives
 
-HEAD-
    Sec. 2142. Board of directors provisions
 
-STATUTE-
    (a) Initial board of directors
      The initial board of directors of a consolidated bank shall
    include the members of the boards of directors of the farm credit
    districts who were elected by voting stockholders of the
    constituent district banks for cooperatives (as such banks existed
    on January 6, 1988) and who shall serve out the terms for which
    they were elected.
    (b) Permanent board of directors
      (1) Composition
        The permanent board of directors of a consolidated bank shall
      consist of -
          (A) three members, elected by the voting stockholders of the
        consolidated bank, from each of the farm credit districts that
        had been served by constituent banks, as such districts existed
        on January 6, 1988, at least one of whom, from each such
        district, shall be a farmer;
          (B) one member elected by the voting stockholders of each
        district bank for cooperatives that is not a constituent of the
        consolidated bank; and
          (C) one member appointed by the members chosen under
        subparagraphs (A) and (B) who shall not be a stockholder or
        borrower of a System institution or an officer or director of
        any such stockholder or borrower.
      (2) Nomination and election
        For purposes of nominating and electing members of the board of
      directors under paragraph (1)(A):
        (A) First member
          The nomination and election of the first member from each
        district shall be carried out on the basis provided for in
        section 2124(d) of this title.
        (B) Second member
          (i) In general
            The nomination and election of the second member from each
          district shall be carried out with each voting stockholder of
          the consolidated bank located in the district having one
          vote, plus a number of votes (or fractional part thereof)
          equal to the number of stockholders eligible to vote in that
          district multiplied by the percentage (or fractional part
          thereof) of the total equity interest (including allocated,
          but not unallocated, surplus and reserves) in the
          consolidated bank of all such stockholders located in that
          district held by the individual voting stockholder -
              (I) at the close of the immediately preceding fiscal year
            of the consolidated bank; or
              (II) with respect to the first election held under this
            subsection, as of such date as the Farm Credit
            Administration shall prescribe.
          (ii) Total number of votes
            The total number of votes for each district under this
          subparagraph shall be the number of voting stockholders of
          the consolidated bank located in the district multiplied by
          two.
        (C) Third member
          The nomination and election of the third member from each
        district shall be carried out in accordance with procedures
        prescribed in the bylaws of the consolidated bank.
      (3) Terms
        (A) In general
          The members of the board of directors of the consolidated
        bank shall serve for a term of 3 years.
        (B) Timing of elections
          Procedures for electing members of the board of directors of
        the consolidated bank under this subsection shall ensure that
        the beginning of the terms of such members coincide with the
        expiration of the terms of members of the interim board of
        directors of the bank under subsection (a) of this section.
      (4) FCA regulations
        The nomination and election of the members of the board of
      directors of the consolidated bank under this subsection shall be
      carried out in accordance with regulations issued by the Farm
      Credit Administration.
    (c) Modification of board of directors provisions
      The provisions of subsection (b) of this section relating to the
    board of directors of the consolidated bank, other than the
    provisions relating to the initial composition, nomination, and
    election of the members of the board, may be modified on an
    affirmative vote of at least two-thirds of the voting stockholders
    of the bank, with each such stockholder to have, for such purposes,
    only one vote.  Any proposals for modifying such provisions shall
    be submitted for a vote by such stockholders in accordance with
    procedures prescribed by the Farm Credit Administration.
 
-SOURCE-
    (Pub. L. 92-181, title III, Sec. 3.21, as added Pub. L. 100-233,
    title IV, Sec. 415(2), Jan. 6, 1988, 101 Stat. 1642; amended Pub.
    L. 100-399, title IV, Sec. 407(c), (d), Aug. 17, 1988, 102 Stat.
    1000.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Subsec. (b)(2)(B)(i)(I). Pub. L. 100-399, Sec. 407(d),
    amended subcl. (I) generally.  Prior to amendment, subcl. (I) read
    as follows: ''as of the final date of the fiscal year of the
    consolidated bank; or''.
      Subsec. (b)(2)(C). Pub. L. 100-399, Sec. 407(c), added subpar.
    (C).
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-CITE-
    12 USC Sec. 2143                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER III - BANKS FOR COOPERATIVES
    Part B - United and National Banks for Cooperatives
 
-HEAD-
    Sec. 2143. Credit delivery office
 
-STATUTE-
      On a determination by the board of directors of the consolidated
    bank that the bank's loan portfolio is concentrated in any one
    district or districts (according to the district boundaries in
    effect immediately prior to the effective date of the establishment
    of the bank under section 413 of the Agricultural Credit Act of
    1987), the bank may consider the creation of regional service
    centers to accommodate such loan concentrations.
 
-SOURCE-
    (Pub. L. 92-181, title III, Sec. 3.22, as added Pub. L. 100-233,
    title IV, Sec. 415(2), Jan. 6, 1988, 101 Stat. 1643; amended Pub.
    L. 100-399, title IV, Sec. 407(e), Aug. 17, 1988, 102 Stat. 1000.)
 
-REFTEXT-
                             REFERENCES IN TEXT
      Section 413 of the Agricultural Credit Act of 1987, referred to
    in text, is section 413 of Pub. L. 100-233, as amended, which is
    set out as a note under section 2121 of this title.
 
-MISC2-
                                 AMENDMENTS
      1988 - Pub. L. 100-399 substituted ''consolidated bank'' for
    ''United Bank for Cooperatives or the National Bank for
    Cooperatives'' and ''establishment of the bank under section 413 of
    the Agricultural Credit Act of 1987'' for ''merger''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2144 of this title.
 
-CITE-
    12 USC Sec. 2144                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER III - BANKS FOR COOPERATIVES
    Part B - United and National Banks for Cooperatives
 
-HEAD-
    Sec. 2144. Consolidation of functions
 
-STATUTE-
      Subject to section 2143 of this title, to the greatest extent
    practicable, the functions of the consolidated bank shall be
    consolidated in the central office of the bank.
 
-SOURCE-
    (Pub. L. 92-181, title III, Sec. 3.23, as added Pub. L. 100-233,
    title IV, Sec. 415(2), Jan. 6, 1988, 101 Stat. 1644.)
 
-CITE-
    12 USC Sec. 2145                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER III - BANKS FOR COOPERATIVES
    Part B - United and National Banks for Cooperatives
 
-HEAD-
    Sec. 2145. Exchange of ownership interests
 
-STATUTE-
      On the establishment of the consolidated bank, ownership
    interests of the stockholders and subscribers to the guaranty funds
    of the constituent district banks for cooperatives (including
    stock, participation certificates, and allocated equities) shall be
    exchanged for like ownership interests in the consolidated bank on
    a book value basis.
 
-SOURCE-
    (Pub. L. 92-181, title III, Sec. 3.24, as added Pub. L. 100-233,
    title IV, Sec. 415(2), Jan. 6, 1988, 101 Stat. 1644.)
 
-CITE-
    12 USC Sec. 2146                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER III - BANKS FOR COOPERATIVES
    Part B - United and National Banks for Cooperatives
 
-HEAD-
    Sec. 2146. Capitalization
 
-STATUTE-
      In accordance with section 2154a of this title, each consolidated
    bank shall provide, through bylaws and subject to Farm Credit
    Administration regulations, for the capitalization of the bank and
    the manner in which bank stock shall be issued, held, transferred,
    and retired and bank earnings distributed.
 
-SOURCE-
    (Pub. L. 92-181, title III, Sec. 3.25, as added Pub. L. 100-233,
    title IV, Sec. 415(2), Jan. 6, 1988, 101 Stat. 1644; amended Pub.
    L. 100-399, title IV, Sec. 407(f), Aug. 17, 1988, 102 Stat. 1000.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-399 amended section generally.  Prior to
    amendment, section read as follows: ''The board of directors of the
    consolidated bank shall provide for the capitalization of such bank
    in accordance with the provisions of section 2154a of this title.''
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-CITE-
    12 USC Sec. 2147                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER III - BANKS FOR COOPERATIVES
    Part B - United and National Banks for Cooperatives
 
-HEAD-
    Sec. 2147. Patronage pools
 
-STATUTE-
      Under such terms and conditions as may be determined by its board
    of directors, the consolidated bank may -
        (1) for a period of at least 3 years following January 6, 1988,
      establish separate patronage pools consisting of loans to
      eligible borrowers located in each constituent farm credit
      district (as such district existed on January 6, 1988); and
        (2) allocate revenues, expenses, and net savings among such
      pools on an equitable basis.
 
-SOURCE-
    (Pub. L. 92-181, title III, Sec. 3.26, as added Pub. L. 100-233,
    title IV, Sec. 415(2), Jan. 6, 1988, 101 Stat. 1644.)
 
-CITE-
    12 USC Sec. 2148                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER III - BANKS FOR COOPERATIVES
    Part B - United and National Banks for Cooperatives
 
-HEAD-
    Sec. 2148. Transactions to accomplish merger
 
-STATUTE-
      The receipt of assets or assumption of liabilities by the
    consolidated bank, the exchange of stock, equities, or other
    ownership interests, and any other transaction carried out in
    accomplishing the merger of the banks for cooperatives shall not be
    treated as a taxable event under the laws of the United States or
    of any State or political subdivision thereof.  The preceding
    sentence shall also apply to the receipt of assets and liabilities
    by a cooperative to the extent that the net amount of the
    distribution is immediately reinvested in stock of a consolidated
    bank (and in such case the basis of such stock shall be
    appropriately reduced by the amount of gain not recognized by
    reason of this sentence).
 
-SOURCE-
    (Pub. L. 92-181, title III, Sec. 3.27, as added Pub. L. 100-233,
    title IV, Sec. 415(2), Jan. 6, 1988, 101 Stat. 1644; amended Pub.
    L. 100-399, title IV, Sec. 407(g), Aug. 17, 1988, 102 Stat. 1001.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-399 substituted ''cooperative'' for ''taxable
    institution''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-CITE-
    12 USC Sec. 2149                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER III - BANKS FOR COOPERATIVES
    Part B - United and National Banks for Cooperatives
 
-HEAD-
    Sec. 2149. Lending limits
 
-STATUTE-
      The Farm Credit Administration may not establish lending limits
    for the consolidated bank with respect to any loans or borrowers
    that are more restrictive than the combined lending limits that
    were previously established by the Farm Credit Administration for a
    district bank for cooperatives and the Central Bank for
    Cooperatives with respect to such loans or borrowers.
 
-SOURCE-
    (Pub. L. 92-181, title III, Sec. 3.28, as added Pub. L. 100-233,
    title IV, Sec. 415(2), Jan. 6, 1988, 101 Stat. 1644.)
 
-CITE-
    12 USC Sec. 2149a                                            01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER III - BANKS FOR COOPERATIVES
    Part B - United and National Banks for Cooperatives
 
-HEAD-
    Sec. 2149a. Reports by merged banks for cooperatives
 
-STATUTE-
    (a) In general
      When two or more banks for cooperatives merge, the resulting bank
    shall, not later than December 31 of each year of the succeeding 5
    years following the date of the merger, file an annual report with
    the Farm Credit Administration that -
        (1) analyzes the effect of the merger;
        (2) includes a breakdown of loans outstanding according to the
      size of the cooperative stockholders of the bank; and
        (3) describes the adequacy of credit and other assistance
      services provided to smaller cooperatives.
    (b) Availability
      A copy of the report required in subsection (a) of this section
    shall be made available to the Committee on Agriculture of the
    House of Representatives and the Committee on Agriculture,
    Nutrition, and Forestry of the Senate.
 
-SOURCE-
    (Pub. L. 92-181, title III, Sec. 3.29, formerly title VII, Sec.
    7.5, as added Pub. L. 100-233, title IV, Sec. 416, Jan. 6, 1988,
    101 Stat. 1646; renumbered Sec. 3.29, Pub. L. 100-399, title IV,
    Sec. 408(e), Aug. 17, 1988, 102 Stat. 1001.)
 
-COD-
                                CODIFICATION
      Section was classified to section 2279a-5 of this title prior to
    renumbering by Pub. L. 100-399.
 
-CITE-
    12 USC SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR
                  MORE CLASSES OF INSTITUTIONS OF THE SYSTEM     01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    .
 
-HEAD-
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
    INSTITUTIONS OF THE SYSTEM
 
-CITE-
    12 USC Part A - Funding                                      01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part A - Funding
    .
 
-HEAD-
    Part A - Funding
 
-CITE-
    12 USC Sec. 2151                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part A - Funding
 
-HEAD-
    Sec. 2151. Revolving fund
 
-STATUTE-
      The revolving fund established by this section (in effect
    immediately before January 6, 1988) shall be available to the Farm
    Credit Administration and the Assistance Board during the periods,
    and for the purposes, provided for in sections 2278a-13 and 2278a-7
    of this title, respectively.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.0, Dec. 10, 1971, 85 Stat. 609;
    Pub. L. 99-205, title I, Sec. 101(1), Dec. 23, 1985, 99 Stat. 1678;
    Pub. L. 100-233, title II, Sec. 202, Jan. 6, 1988, 101 Stat. 1605;
    Pub. L. 100-399, title II, Sec. 202, Aug. 17, 1988, 102 Stat. 992.)
 
-REFTEXT-
                             REFERENCES IN TEXT
      For explanation of the revolving fund established by this section
    (in effect immediately before January 6, 1988), referred to in
    text, see Revolving Funds note below.
 
-MISC2-
                                 AMENDMENTS
      1988 - Pub. L. 100-399 amended section generally.  Prior to
    amendment, section read as follows:
      ''(a) Revolving Fund. - The revolving fund established by this
    section (in effect immediately before January 6, 1988) shall be
    available to the Farm Credit Administration during the period, and
    for the purposes provided for, in sections 2278a-7(b) and 2278a-13
    of this title.
      ''(b) Farm Credit Insurance Fund. - On the date the first premium
    is due and payable under section 2277a-5(c) of this title, any
    funds remaining in the revolving fund shall be transferred to the
    Farm Credit Insurance Fund in accordance with the terms and
    conditions established by the Farm Credit Administration.''
      Pub. L. 100-233 amended section generally.  Prior to amendment,
    section read as follows: ''The revolving fund established by Public
    Law 87-343, 75 Stat. 758, as amended, and the revolving fund
    established by Public Law 87-494, 76 Stat. 109, as amended, and
    continued by Public Law 96-592, shall be merged and shall be
    available to the Farm Credit Administration for the purchase, on
    behalf of the United States, of capital stock of the Capital
    Corporation. The Farm Credit Administration may make such purchases
    of stock as the Farm Credit Administration determines, in its
    discretion, are necessary to achieve the purposes of this
    chapter.''
      1985 - Pub. L. 99-205 substituted provisions relating to
    revolving funds and investments for provisions respecting stock
    purchased by the Governor for the Farm Credit Administration,
    retirement, and franchise tax.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
                              REVOLVING FUNDS
      The revolving fund established by this section (in effect
    immediately before January 6, 1988), referred to in text, means the
    revolving fund created by former provisions of this section, which
    merged the revolving fund established by Public Law 87-343, 75
    Stat. 758, as amended (described below as ''first fund''), with the
    revolving fund established by Public Law 87-494, 76 Stat. 109, as
    amended (described below as ''second fund''), which was regarded as
    continued by Pub. L. 96-592.
      At the time of enactment of former section 2152 of this title
    (see second par. of note under former section 2152 of this title)
    by Pub. L. 92-181 funds for temporary investment by the Governor of
    the Farm Credit Administration in the farm credit system were
    available from two revolving funds.
      The first fund, providing moneys for investment in production
    credit associations and intermediate credit banks, was covered by
    former section 1131i of this title.  Such fund was itself the
    result of an earlier merger of two revolving funds, the first
    having been created by the Farm Credit Act of 1933 and the second
    having been created by the Federal Farm Mortgage Corporation Act of
    1934. These two were combined into a single fund pursuant to Pub.
    L. 87-343, Sec. 2(1), Oct. 3, 1961, 75 Stat. 758. Each of the
    statutory steps in the establishment of such fund was cast in the
    form of an amendment to the Farm Credit Act of 1933. Since such
    Farm Credit Act of 1933 has been repealed by section 5.26 of Pub.
    L. 92-181, section 1131i of this title is carried as repealed.
    Notwithstanding such apparent repeal, statements of Congressional
    intent indicate an intention to retain the fund using as its
    statutory base the law (Pub. L. 87-343) which had effected the
    consolidation in 1961.
      The second fund, providing moneys for investment in banks for
    cooperatives, is covered by section 1141d of this title.  Although
    the basic authority for such fund would be the Agricultural
    Marketing Act of 1929, a more updated authority for such fund is
    the Agricultural Marketing Act Amendment of 1962, Pub. L. 87-494,
    June 25, 1962, 76 Stat. 109, under which the fund was reduced to
    $150,000,000 and the amount in such fund in excess of such figure
    was returned to the Treasury as miscellaneous receipts.
      Pub. L. 96-592, referred to above as continuing the revolving
    fund established by Pub. L. 87-494, is the Farm Credit Act
    Amendment of 1980, Pub. L. 96-592, Dec. 24, 1980, 94 Stat. 3437.
    For complete classification of this Act to the Code, see Short
    Title of 1980 Amendment note set out under section 2001 of this
    title and Tables.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2277a-9, 2278a-7,
    2278a-13 of this title.
 
-CITE-
    12 USC Sec. 2152                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part A - Funding
 
-HEAD-
    Sec. 2152. Repealed. Pub. L. 100-233, title II, Sec. 207(a)(1),
        Jan. 6, 1988, 101 Stat. 1607
 
-MISC1-
      Section, Pub. L. 92-181, title IV, Sec. 4.1, as added Pub. L.
    99-205, title I, Sec. 104, Dec. 23, 1985, 99 Stat. 1687, contained
    requirements for purchase of stock and payment of assessments and
    contribution of capital to Capital Corporation.
      A prior section 2152, Pub. L. 92-181, title IV, Sec. 4.1, Dec.
    10, 1971, 85 Stat. 609, related to revolving funds and government
    deposits, prior to repeal, effective thirty days after Dec. 23,
    1985, by Pub. L. 99-205, title I, Sec. 101(2), Dec. 23, 1985, 99
    Stat. 1678. See section 2151 of this title.
                          EFFECTIVE DATE OF REPEAL
      Section 207(b) of Pub. L. 100-233 provided that: ''The repeals
    made by subsection (a) (repealing this section and sections 2216 to
    2216k, and 2252(a)(8) of this title) shall take effect 15 days
    after the date of the enactment of this Act (Jan. 6, 1988).''
 
-CITE-
    12 USC Sec. 2153                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part A - Funding
 
-HEAD-
    Sec. 2153. Power to borrow; issuance of notes, bonds, debentures,
        and other obligations
 
-STATUTE-
      Each of the banks of the System, in order to obtain funds for its
    authorized purposes, shall have power, subject to regulation by the
    Farm Credit Administration, and subject to the limitations of
    paragraph (e) of this section, to -
      (a) Borrow money from or loan to any other institution of the
    System, borrow from any commercial bank or other lending
    institution, issue its notes or other evidence of debt on its own
    individual responsibility and full faith and credit, and invest its
    excess funds in such sums, at such times, and on such terms and
    conditions as it may determine.
      (b) Issue its own notes, bonds, debentures, or other similar
    obligations, fully collateralized as provided in section 2154(c) of
    this title by the notes, mortgages, and security instruments it
    holds in the performance of its functions under this chapter in
    such sums, maturities, rates of interest, and terms and conditions
    of each issue as it may determine with approval of the Farm Credit
    Administration.
      (c) Join with any or all banks organized and operating under the
    same subchapter of this chapter in borrowing or in issuance of
    consolidated notes, bonds, debentures, or other obligations as may
    be agreed with approval of the Farm Credit Administration.
      (d) Join with other banks of the System in issuance of
    System-wide notes, bonds, debentures, and other obligations in the
    manner, form, amounts, and on such terms and conditions as may be
    agreed upon with approval of the Farm Credit Administration. Such
    System-wide issue by the participating banks and such
    participations by each bank shall not exceed the limits to which
    each such bank is subject in the issuance of its individual or
    consolidated obligations and each such issue shall be subject to
    approval of the Farm Credit Administration: Provided, however,
    There shall be no issues of System-wide obligations without the
    concurrence of the boards of directors of each bank and the
    approval of the Farm Credit Administration for such issues shall be
    conditioned on and be evidence of the compliance with this
    provision.
      (e) No bank or banks shall issue notes, bonds, debentures, or
    other obligations individually or in concert with one or more banks
    of the System other than through the Federal Farm Credit Banks
    Funding Corporation under any provision of this chapter except
    under subsection (a) of this section: Provided, That any bank or
    banks may issue investment bonds or like obligations other than
    through the Federal Farm Credit Banks Funding Corporation if the
    interest rate is not in excess of the interest allowable on savings
    deposits of commercial banks of comparable amounts and maturities
    under Federal Reserve regulation on its member banks.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.2, Dec. 10, 1971, 85 Stat. 610;
    Pub. L. 99-205, title II, Sec. 205(f)(1), Dec. 23, 1985, 99 Stat.
    1705; Pub. L. 100-233, title IV, Sec. 418(b), formerly Sec. 415(b),
    Jan. 6, 1988, 101 Stat. 1653, renumbered Sec. 418(b), Pub. L.
    100-399, title IV, Sec. 409(a), Aug. 17, 1988, 102 Stat. 1003; Pub.
    L. 100-399, title II, Sec. 203(e), Aug. 17, 1988, 102 Stat. 993.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Subsec. (d). Pub. L. 100-233 substituted ''the boards of
    directors of each bank'' for ''the boards of directors of each of
    the 12 districts and the Central Bank for Cooperatives''.
      Subsec. (e). Pub. L. 100-399, Sec. 203(e), substituted ''System
    other than through the'' for ''System other than through their'',
    and substituted ''Federal Farm Credit Banks Funding Corporation''
    for ''fiscal agent'' in two places.
      1985 - Pub. L. 99-205 substituted ''regulation by'' for
    ''supervision of'' in provision preceding subsec. (a).
      Subsec. (b). Pub. L. 99-205 substituted references to section
    ''2154(c)'' for ''2154(b)'' and ''Farm Credit Administration'' for
    ''Governor''.
      Subsecs. (c), (d). Pub. L. 99-205 substituted ''Farm Credit
    Administration'' for ''Governor'' wherever appearing.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2244, 2252, 2277a,
    2277a-1 of this title.
 
-CITE-
    12 USC Sec. 2154                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part A - Funding
 
-HEAD-
    Sec. 2154. Capital adequacy of banks and institutions
 
-STATUTE-
    (a) Minimum levels of capital
      The Farm Credit Administration shall cause System institutions to
    achieve and maintain adequate capital by establishing minimum
    levels of capital for such System institutions and by using such
    other methods as the Farm Credit Administration deems appropriate.
    The Farm Credit Administration may establish such minimum level of
    capital for a System institution as the Farm Credit Administration,
    in its discretion, deems to be necessary or appropriate in light of
    the particular circumstances of the System institution.
    (b) Failure to maintain minimum levels; directives; plans for
        achieving minimum levels; proposals affecting compliance
      (1) Failure of a System institution to maintain capital at or
    above its minimum level as established under subsection (a) of this
    section may be deemed by the Farm Credit Administration, in its
    discretion, to constitute an unsafe and unsound practice within the
    meaning of this chapter.
      (2) In addition to, or in lieu of, any other action authorized by
    law, including paragraph (1), the Farm Credit Administration may
    issue a directive to a System institution that fails to maintain
    capital at or above its required level as established under
    subsection (a) of this section.  Such directive may require the
    System institution to submit and adhere to a plan acceptable to the
    Farm Credit Administration describing the means and timing by which
    the System institution shall achieve its required capital level,
    but may not require merger or consolidation without a majority vote
    of the voting stockholders or the contributors to the guaranty fund
    of the institution.
      (3) The Farm Credit Administration may consider such System
    institution's progress in adhering to any plan required under
    paragraph (2) whenever such System institution, or an affiliate
    thereof, seeks the requisite approval of the Farm Credit
    Administration for any proposal that would divert earnings,
    diminish capital, or otherwise impede such System institution's
    progress in achieving its minimum capital level.  The Farm Credit
    Administration may deny such approval where it determines that such
    proposal would adversely affect the ability of the System
    institution to comply with such plan.
    (c) Enhancement of capital adequacy of banks
      Each bank shall have on hand at the time of issuance of any note,
    bond, debenture, or other similar obligation and at all times
    thereafter maintain, free from any lien or other pledge, notes and
    other obligations representing loans made under this chapter or
    real or personal property acquired in connection with loans made
    under this chapter, obligations of the United States or any agency
    thereof direct or fully guaranteed, other bank assets (including
    marketable securities) approved by the Farm Credit Administration,
    or cash, in an aggregate value equal to the total amount of notes,
    bonds, debentures, or other similar obligations outstanding for
    which the bank is primarily liable.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.3, Dec. 10, 1971, 85 Stat. 611;
    Pub. L. 99-205, title I, Sec. 101(3), Dec. 23, 1985, 99 Stat. 1678;
    Pub. L. 100-233, title III, Sec. 304, title VIII, Sec. 804(a)(3),
    805(q), Jan. 6, 1988, 101 Stat. 1621, 1715, 1716; Pub. L. 100-399,
    title VII, Sec. 702(b), Aug. 17, 1988, 102 Stat. 1006.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Subsec. (b)(2). Pub. L. 100-233, Sec. 804(a)(3), struck
    out subpar. (A) designation and struck out subpar. (B) which read
    as follows: ''Any directive issued under this paragraph, including
    plans submitted pursuant thereto, shall be enforceable under the
    provisions of section 2267 of this title to the same extent as an
    effective and outstanding order issued under section 2261 of this
    title that has become final.''
      Subsec. (c). Pub. L. 100-233, Sec. 805(q), which directed the
    amendment of subsec. (c) by substituting ''direct or fully
    guaranteed'' for ''direct of fully guaranteed'' was repealed by
    Pub. L. 100-399, Sec. 702(b). See Construction of 1988 Amendment
    note below.
      Pub. L. 100-233, Sec. 304, amended subsec. (c) generally.  Prior
    to amendment, subsec. (c) read as follows: ''Each bank shall have
    on hand at the time of issuance of any long-term notes, bonds,
    debentures, or other similar obligations and at all times
    thereafter maintain, free from any lien or other pledge, notes and
    other obligations representing loans made under the authority of
    this chapter, obligations of the United States or any agency
    thereof direct or fully guaranteed, other readily marketable
    securities approved by the Farm Credit Administration, or cash, in
    an aggregate value equal to the total amount of long-term notes,
    bonds, debentures, or other similar obligations outstanding for
    which the bank is primarily liable.''
      1985 - Pub. L. 99-205 substituted ''Capital adequacy of banks and
    associations'' for ''Aggregate of obligations; collateral'' in
    section catchline.
      Subsec. (a). Pub. L. 99-205 amended subsec. (a) generally.  Prior
    to amendment, subsec. (a) read as follows: ''No issue of long-term
    notes, bonds, debentures, or other similar obligations by a bank or
    banks shall be approved in an amount which, together with the
    amount of other bonds, debentures, long-term notes, or other
    similar obligations issued and outstanding, exceeds twenty times
    the capital and surplus of all the banks which will be primarily
    liable on the proposed issue, or such lesser amount as the Farm
    Credit Administration shall establish by regulation.''
      Subsecs. (b), (c). Pub. L. 99-205 added subsec. (b) and
    redesignated former subsec. (b) as (c).
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
                       CONSTRUCTION OF 1988 AMENDMENT
      Section 702(b) of Pub. L. 100-399 provided that section 805(q) of
    Pub. L. 100-233, cited as a credit to this section, is repealed and
    that subsec. (c) of this section shall be applied and administered
    as if such section had not been enacted.
                     MINIMUM CAPITAL ADEQUACY STANDARDS
      Section 301(a) of Pub. L. 100-233, as amended by Pub. L. 100-399,
    title III, Sec. 301(a), Aug. 17, 1988, 102 Stat. 993, provided
    that:
      ''(1) In general. -
        ''(A) Establishment. - Within 120 days after the date of the
      enactment of this Act (Jan. 6, 1988), the Farm Credit
      Administration shall issue regulations under section 4.3(a) of
      the Farm Credit Act of 1971 (12 U.S.C. 2154(c) (12 U.S.C.
      2154(a))) that establish minimum permanent capital adequacy
      standards for Farm Credit System institutions.
        ''(B) Basis for establishment. - The standards established
      under subparagraph (A) shall apply to an institution based on the
      financial statements of the institution prepared in accordance
      with generally accepted accounting principles.
        ''(C) Ratio of capital to assets. - The standards established
      under subparagraph (A) shall specify fixed percentages
      representing the ratio of permanent capital of the institution to
      the assets of the institution, taking into consideration relative
      risk factors as determined by the Farm Credit Administration.
        ''(D) Phase-in period. - The standards established under
      subparagraph (A) shall be phased in during the 5-year period
      beginning on the date of the enactment of this Act (Jan. 6,
      1988).
      ''(2) Emergency power not available. - The Farm Credit
    Administration shall not invoke the emergency provisions of section
    5.17(c)(2) of the Farm Credit Act of 1971 (12 U.S.C. 2251(c)(2) (12
    U.S.C. 2252(c)(2))) with respect to the issuance of the regulations
    required under paragraph (1)(A).
      ''(3) Prohibitions during transition period. - During the 5-year
    period specified in paragraph (1)(D), the Farm Credit
    Administration shall not initiate any receivership,
    conservatorship, liquidation, or enforcement action against any
    System institution certified to issue preferred stock under section
    6.27 of the Farm Credit Act of 1971 (as added by section 201 of
    this Act) (12 U.S.C. 2278b-7), solely because of the failure of
    such institution to meet minimum permanent capital adequacy
    standards unless such action is recommended or concurred in by the
    Farm Credit System Assistance Board established under section 6.0
    of such Act (as added by section 201 of this Act) (12 U.S.C.
    2278a).
      ''(4) Permanent capital. - For purposes of this subsection, the
    term 'permanent capital' has the same meaning given that term in
    section 4.3A(a)(1) of the Farm Credit Act of 1971 (12 U.S.C.
    2154a(a)(1)).''
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2153, 2154a, 2155, 2267,
    2268, 2278b-6 of this title.
 
-CITE-
    12 USC Sec. 2154a                                            01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part A - Funding
 
-HEAD-
    Sec. 2154a. Capitalization of System institutions
 
-STATUTE-
    (a) Definitions
      As used in this section:
      (1) Permanent capital
        The term ''permanent capital'' means -
          (A) current year retained earnings;
          (B) allocated and unallocated earnings (which, in the case of
        earnings allocated in any form by a System bank to any
        association or other recipient and retained by the bank, shall
        be considered, in whole or in part, permanent capital of the
        bank or of any such association or other recipient as provided
        under an agreement between the bank and each such association
        or other recipient);
          (C) all surplus (less allowances for losses);
          (D) stock issued by a System institution, except -
            (i) stock that may be retired by the holder of the stock on
          repayment of the holder's loan, or otherwise at the option or
          request of the holder; or
            (ii) stock that is protected under section 2162 of this
          title or is otherwise not at risk; and
          (E) any other debt or equity instruments or other accounts
        that the Farm Credit Administration determines appropriate to
        be considered permanent capital.
      (2) Stock
        The term ''stock'' means voting and nonvoting stock (including
      preferred stock), equivalent contributions to a guaranty fund,
      participation certificates, allocated equities, and other forms
      and types of equities.
    (b) Adoption of bylaws
      Subject to approval by shareholders under subsection (c)(2) of
    this section, each bank and association shall adopt bylaws,
    developed by its board of directors, that provide for the
    capitalization of the institution in accordance with subsection
    (c)(1) of this section.
    (c) Requirements of bylaws
      (1) In general
        Notwithstanding any other provision of this chapter, the bylaws
      adopted under subsection (b) of this section -
          (A) shall provide for such classes, par value, and amounts of
        the stock of the institution, the manner in which such stock
        shall be issued, transferred, and retired, and the payment of
        dividends and patronage refunds, as determined appropriate by
        the Board of Directors, subject to this section;
          (B) may provide for the charging of loan origination fees as
        determined appropriate by the Board of Directors;
          (C) shall enable the institution to meet the capital adequacy
        standards established under the regulations issued under
        section 2154(a) of this title;
          (D) shall provide for the issuance of voting stock, which may
        only be held by -
            (i) borrowers who are farmers, ranchers, or producers or
          harvesters of aquatic products, and cooperative associations
          eligible to borrow from System institutions under this
          chapter;
            (ii) in the case of a Central Bank for Cooperatives, other
          banks for cooperatives; and
            (iii) in the case of banks other than banks for
          cooperatives, System associations;
          (E) shall require that -
            (i) as a condition of borrowing from or through the
          institution, any borrower who is entitled to hold voting
          stock or participation certificates shall, at the time a loan
          is made, acquire voting stock or participation certificates
          in an amount not less than $1,000 or 2 percent of the amount
          of the loan, whichever is less; and
            (ii) within 2 years after the loan of a borrower is repaid
          in full, any voting stock held by the borrower be converted
          to nonvoting stock;
          (F) may provide that persons who are not borrowers from the
        institution may hold nonvoting stock of the institution;
          (G) shall require that any holder of voting stock issued
        before the adoption of bylaws under this section exchange a
        portion of such stock for new voting stock;
          (H) do not need to provide for maximum or minimum standards
        of borrower stock ownership based on a percentage of the loan
        of the borrower, except as otherwise provided in this section;
          (I) shall permit the retirement of stock at the discretion of
        the institution if the institution meets the capital adequacy
        standards established under section 2154(a) of this title; and
          (J) shall permit stock to be transferable.
      (2) Effective date
        The bylaws adopted by the board of directors of a System
      institution under subsection (b) of this section shall take
      effect only on approval of a majority of the stockholders of such
      institution present and voting, or voting by written proxy, at a
      duly authorized stockholders' meeting.
    (d) Reduction of capital
      (1) General rule
        Except as provided in paragraph (2), the board of directors of
      a System institution may not reduce the permanent capital of the
      institution through the payment of patronage refunds or
      dividends, or the retirement of stock if, after or due to such
      action, the permanent capital of the institution would thereafter
      fail to meet the minimum capital adequacy standards established
      under section 2154(a) of this title.
      (2) Exceptions
        Paragraph (1) shall not apply to the payment of noncash
      patronage refunds by any institution exempt from Federal income
      tax if the entire refund paid qualifies as permanent capital.
      Notwithstanding paragraph (1), any System institution subject to
      Federal income tax may pay patronage refunds partially in cash as
      long as the cash portion of the refund is the minimum amount
      required to qualify the refund as a deductible patronage
      distribution for Federal income tax purposes and the remaining
      portion of the refund paid qualifies as permanent capital.
    (e) Compliance
      The Farm Credit Administration may issue a directive that
    requires compliance with subsection (d) of this section, to the
    board of directors of any System institution that fails to comply
    therewith.
    (f) Loans designated for sale or sold into secondary market
      (1) In general
        Subject to paragraph (2) and notwithstanding any other
      provision of this section, the bylaws adopted by a bank or
      association under subsection (b) of this section may provide -
          (A) in the case of a loan made on or after February 10, 1996,
        that is designated, at the time the loan is made, for sale into
        a secondary market, that no voting stock or participation
        certificate purchase requirement shall apply to the borrower
        for the loan; and
          (B) in the case of a loan made before February 10, 1996, that
        is sold into a secondary market, that all outstanding voting
        stock or participation certificates held by the borrower with
        respect to the loan shall, subject to subsection (d)(1) of this
        section, be retired.
      (2) Applicability
        Notwithstanding any other provision of this section, in the
      case of a loan sold to a secondary market under subchapter VIII
      of this chapter, paragraph (1) shall apply regardless of whether
      the bank or association retains a subordinated participation
      interest in a loan or pool of loans or contributes to a cash
      reserve.
      (3) Exception
        (A) In general
          Subject to subparagraph (B) and notwithstanding any other
        provision of this section, if a loan designated for sale under
        paragraph (1)(A) is not sold into a secondary market during the
        180-day period that begins on the date of the designation, the
        voting stock or participation certificate purchase requirement
        that would otherwise apply to the loan in the absence of a
        bylaw provision described in paragraph (1)(A) shall be
        effective.
        (B) Retirement
          The bylaws adopted by a bank or association under subsection
        (b) of this section may provide that if a loan described in
        subparagraph (A) is sold into a secondary market after the end
        of the 180-day period described in the subparagraph, all
        outstanding voting stock or participation certificates held by
        the borrower with respect to the loan shall, subject to
        subsection (d)(1) of this section, be retired.
    (g) Construction
      This section shall not be construed to affect the provisions of
    this chapter that confer on System institutions a lien on borrower
    stock or other equities and the privilege to retire or cancel such
    stock or other equities for application against the indebtedness on
    a defaulted or restructured loan.
    (h) Controlling authority
      To the extent that any provision of this section is inconsistent
    with any other provision of this chapter (other than section 2162
    of this title), the provision of this section shall control.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.3A, as added Pub. L. 100-233,
    title III, Sec. 301(b), Jan. 6, 1988, 101 Stat. 1608; amended Pub.
    L. 100-399, title III, Sec. 301(b)-(f), Aug. 17, 1988, 102 Stat.
    994; Pub. L. 102-552, title I, Sec. 101, Oct. 28, 1992, 106 Stat.
    4103; Pub. L. 104-105, title II, Sec. 206, Feb. 10, 1996, 110 Stat.
    173.)
 
-MISC1-
                                 AMENDMENTS
      1996 - Subsecs. (f) to (h). Pub. L. 104-105 added subsec. (f) and
    redesignated former subsecs. (f) and (g) as (g) and (h),
    respectively.
      1992 - Subsec. (a)(1). Pub. L. 102-552 amended par. (1)
    generally.  Prior to amendment, par. (1) read as follows: ''The
    term 'permanent capital' means current year retained earnings,
    allocated and unallocated earnings, all surplus (less allowances
    for losses), and stock issued by a System institution, except stock
    that -
        ''(A) may be retired by the holder thereof on repayment of the
      holder's loan, or otherwise at the option or request of the
      holder; or
        ''(B) is protected under section 2162 of this title or is
      otherwise not at risk.''
      1988 - Subsec. (a)(1)(B). Pub. L. 100-399, Sec. 301(b),
    substituted ''section 2162 of this title'' for ''section 4.9B''.
      Subsec. (c)(1)(D)(i). Pub. L. 100-399, Sec. 301(c)(1),
    substituted ''producers or'' for ''producers, or''.
      Subsec. (c)(1)(G). Pub. L. 100-399, Sec. 301(c)(2), substituted
    ''voting stock issued'' for ''stock issued''.
      Subsec. (c)(1)(H). Pub. L. 100-399, Sec. 301(d), inserted '',
    except as otherwise provided in this section'' after ''the
    borrower''.
      Subsec. (c)(1)(I). Pub. L. 100-399, Sec. 301(e), struck out
    ''standards issued under'' after ''established under''.
      Subsec. (d)(1). Pub. L. 100-399, Sec. 301(f), struck out ''and in
    section 2162 of this title'' after ''paragraph (2)'' and ''or
    allocated equities'' after ''retirement of stock''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2014, 2074, 2094, 2146,
    2162, 2267, 2268, 2279a-3, 2279c-1 of this title.
 
-CITE-
    12 USC Sec. 2155                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part A - Funding
 
-HEAD-
    Sec. 2155. Liability of banks; United States not liable
 
-STATUTE-
    (a) Joint and several liability of banks
      (1) Each bank of the System shall be fully liable on notes,
    bonds, debentures, or other obligations issued by it individually,
    and shall be liable for the interest payments on long-term notes,
    bonds, debentures, or other obligations issued by other banks
    operating under the same subchapter of this chapter.
      (2)(A) Each bank shall also be primarily liable for the portion
    of any issue of consolidated or System-wide obligations made on its
    behalf and be jointly and severally liable for the payment of any
    additional sums as called upon by the Farm Credit Administration in
    order to make payments of interest or principal which any bank
    primarily liable therefor shall be unable to make.
      (B) Such calls first shall be made on all nondefaulting banks in
    proportion to each such bank's proportionate share of the aggregate
    available collateral held by all such banks.
      (C) For purposes of this paragraph, the term ''available
    collateral'' means the amount (determined at the close of the last
    calendar quarter ending before such call) by which a bank's
    collateral as described in section 2154 of this title exceeds the
    collateral required to support the bank's outstanding notes, bonds,
    debentures, and other similar obligations.
      (D) If the Farm Credit Administration makes any such call and the
    available collateral of all such banks does not fully satisfy the
    liability necessitating such calls, such calls shall be made on all
    nondefaulting banks in proportion to each such bank's remaining
    assets.
      (E) Any System bank that, pursuant to a call by the Farm Credit
    Administration, makes a payment of principal or interest to the
    holder of any consolidated or System-wide obligation issued on
    behalf of another System bank shall be subrogated to all rights of
    the holder against such other bank to the extent of such payment.
      (F) On making such a call with respect to obligations issued on
    behalf of a System bank, the Farm Credit Administration shall
    appoint a receiver for the bank, which shall expeditiously
    liquidate or otherwise wind up the affairs of the bank.
    (b) Resolutions as to liability; execution of obligations
      Each bank participating in an issue shall by appropriate
    resolution undertake such responsibility as provided in subsection
    (a) of this section, and in the case of consolidated or System-wide
    obligations shall authorize the execution of such long-term notes,
    bonds, debentures, or other obligations on its behalf.  When a
    consolidated or System-wide issue is approved, the notes, bonds,
    debentures, or other obligations shall be executed and the banks
    shall be liable thereon as provided herein.
    (c) United States liability
      The United States shall not be liable or assume any liability
    directly or indirectly thereon.
    (d) Insurance Fund called on before invoking joint and several
        liability
      Beginning 5 years after January 6, 1988, the Farm Credit
    Administration shall not call on any System institution to satisfy
    the liability of the institution on any joint, consolidated, or
    System-wide obligation participated in by the institution or with
    respect to which the institution is primarily, or jointly and
    severally, liable, before the Farm Credit Insurance Fund is
    exhausted, even if the Fund is only able to make a partial payment
    because of insufficient amounts in the Fund.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.4, Dec. 10, 1971, 85 Stat. 611;
    Pub. L. 99-205, title I, Sec. 101(4), title II, Sec. 205(f)(2),
    Dec. 23, 1985, 99 Stat. 1679, 1706; Pub. L. 100-233, title II, Sec.
    207(c), title III, Sec. 303, Jan. 6, 1988, 101 Stat. 1608, 1620;
    Pub. L. 100-399, title III, Sec. 303, Aug. 17, 1988, 102 Stat.
    995.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Subsec. (a). Pub. L. 100-233, Sec. 303(a), amended subsec.
    (a) generally.  Prior to amendment, subsec. (a) read as follows:
    ''Each bank of the System shall be fully liable on notes, bonds,
    debentures, or other obligations issued by it individually, and
    shall be liable for the interest payments on long-term notes,
    bonds, debentures, or other obligations issued by other banks
    operating under the same subchapter of this chapter.  Each bank
    shall also be primarily liable for the portion of any issue of
    consolidated or System-wide obligations made on its behalf and be
    jointly and severally liable for the payment of any additional sums
    as called upon by the Farm Credit Administration in order to make
    payments of interest or principal which any bank primarily liable
    therefor shall be unable to make.  Such calls shall be made first
    upon the other banks operating under the same subchapter of this
    chapter as the defaulting bank, and second upon banks operating
    under other subchapters of this chapter, taking into consideration
    the capital, surplus, bonds, debentures, or other obligations which
    each may have outstanding at the time of such assessment.''
      Subsec. (c). Pub. L. 100-233, Sec. 207(c), redesignated subsec.
    (d) as (c), and struck out former subsec. (c) which provided that
    for purposes of this part, the term ''bank'' included the Capital
    Corporation.
      Subsec. (d). Pub. L. 100-399 redesignated subsec. (e) as (d).
      Pub. L. 100-233, Sec. 207(c), redesignated subsec. (d) as (c).
      Subsec. (e). Pub. L. 100-399 redesignated subsec. (e) as (d).
      Pub. L. 100-233, Sec. 303(b), added subsec. (e).
      1985 - Subsec. (b). Pub. L. 99-205, Sec. 205(f)(2), substituted
    ''execution of'' for ''Governor to execute'' in first sentence and
    struck out ''by the Governor'' after ''shall be executed'' in
    second sentence.
      Subsecs. (c), (d). Pub. L. 99-205, Sec. 101(4), added subsec. (c)
    and redesignated former subsec. (c) as (d).
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2278b-6 of this title.
 
-CITE-
    12 USC Sec. 2156                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part A - Funding
 
-HEAD-
    Sec. 2156. Repealed. Pub. L. 100-233, title II, Sec. 204(b), Jan.
        6, 1988, 101 Stat. 1607
 
-MISC1-
      Section, Pub. L. 92-181, title IV, Sec. 4.5, Dec. 10, 1971, 85
    Stat. 611; Pub. L. 96-592, title IV, Sec. 401, Dec. 24, 1980, 94
    Stat. 3446; Pub. L. 99-205, title II, Sec. 205(f)(3), Dec. 23,
    1985, 99 Stat. 1706, provided for establishment of a finance
    committee for banks organized and operated under subchapters I, II,
    and III of this chapter.  See section 2160 of this title.
 
-CITE-
    12 USC Sec. 2157                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part A - Funding
 
-HEAD-
    Sec. 2157. Bonds as investments
 
-STATUTE-
      The bonds, debentures, and other similar obligations issued under
    the authority of this chapter shall be lawful investments for all
    fiduciary and trust funds and may be accepted as security for all
    public deposits.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.6, Dec. 10, 1971, 85 Stat. 612.)
 
-CITE-
    12 USC Sec. 2158                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part A - Funding
 
-HEAD-
    Sec. 2158. Purchase and sale by Federal Reserve System
 
-STATUTE-
      Any member of the Federal Reserve System may buy and sell bonds,
    debentures, or other similar obligations issued under the authority
    of this chapter and any Federal Reserve bank may buy and sell such
    obligations to the same extent and subject to the same limitations
    placed upon the purchase and sale by said banks of State, county,
    district, and municipal bonds under section 355 of this title.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.7, Dec. 10, 1971, 85 Stat. 612.)
 
-CITE-
    12 USC Sec. 2159                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part A - Funding
 
-HEAD-
    Sec. 2159. Purchase and sale of obligations; additional powers
 
-STATUTE-
      (a) Each bank of the System may purchase its own obligations and
    the obligations of other banks of the System and may provide for
    the sale of obligations issued by it, consolidated obligations, or
    Systemwide obligations through a fiscal agent or agents, by
    negotiation, offer, bid, syndicate sale, and to deliver such
    obligations by book entry, wire transfer, or such other means as
    may be appropriate.
      (b) Through December 31, 1992, each bank of the System, in
    addition to purchasing obligations as authorized by this chapter,
    may, with the prior approval of the Farm Credit Administration and
    subject to such conditions as it may establish, (1) reduce the cost
    of its borrowings by doing one or more of the following: (A)
    contracting with a third party, or an entity that is established as
    a limited purpose System institution under section 2211 of this
    title and that is not to be included in the combined financial
    statements of other System institutions, with respect to the
    payment of interest on the bank's obligations and the obligations
    of other banks incurred before January 1, 1985, in consideration of
    the payment of market interest rates on such obligations, plus a
    premium, or (B) for the period July 1, 1986, through December 31,
    1992, capitalizing interest costs on obligations incurred before
    January 1, 1985, in excess of the estimated interest costs on an
    equivalent amount of Farm Credit System obligations at prevailing
    market rates on such obligations of similar maturities as of
    October 21, 1986, or (C) taking other similar action; and (2)
    amortize, over a period of not to exceed 20 years, the
    capitalization of the premium, capitalization of interest expense,
    or like costs of any action taken under clause (1).
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.8, Dec. 10, 1971, 85 Stat. 612;
    Pub. L. 99-509, title I, Sec. 1034, Oct. 21, 1986, 100 Stat. 1878;
    Pub. L. 100-233, title II, Sec. 205(a), Jan. 6, 1988, 101 Stat.
    1607.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Subsec. (b). Pub. L. 100-233 substituted ''December 31,
    1992'' for ''December 31, 1988'' in two places.
      1986 - Pub. L. 99-509 designated existing provisions as subsec.
    (a) and added subsec. (b).
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2001, 2254, 2278a-6 of
    this title.
 
-CITE-
    12 USC Sec. 2160                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part A - Funding
 
-HEAD-
    Sec. 2160. Federal Farm Credit Banks Funding Corporation
 
-STATUTE-
    (a) Establishment
      There is hereby established the Federal Farm Credit Banks Funding
    Corporation (hereinafter in this section referred to as the
    ''Corporation''), which shall be an institution of the Farm Credit
    System.
    (b) Duties
      The Corporation -
        (1) shall issue, market, and handle the obligations of the
      banks of the Farm Credit System, and interbank or intersystem
      flow of funds as may from time to time be required;
        (2) acting for the banks of the Farm Credit System, subject to
      approval of the Farm Credit Administration, shall determine the
      amount, maturities, rates of interest, terms, and conditions of
      participation by the several banks in each issue of joint,
      consolidated, or System-wide obligations; and
        (3) shall exercise such other powers as were provided to the
      predecessor Federal Farm Credit Banks Funding Corporation in
      accordance with its charter issued under section 2211 of this
      title, in effect immediately before January 6, 1988.
    (c) Officers and committees
      (1) Designation
        The board of directors may designate such officers and
      committees for such terms and such purposes as may be agreed on
      by the board.
      (2) Issuance of obligations
        When appropriate to the board's functions under this section, a
      committee of the board of directors of the Corporation, or
      representatives thereof, may act on behalf of the board in
      connection with the issuance of joint, consolidated, and
      System-wide obligations.
    (d) Board of directors
      (1) Composition
        The board of directors shall be composed of nine voting members
      and one nonvoting member, as follows:
          (A) Four voting members shall be current or former directors
        of the System banks elected by the shareholders of the
        Corporation.
          (B) Three voting members shall be chief executive officers or
        presidents of System banks elected by the shareholders of the
        Corporation.
          (C) Two voting members shall be appointed by the members
        elected under subparagraphs (A) and (B) after the elected
        members have received recommendations for such appointments
        from, and consulted with, the Secretary of the Treasury and the
        Chairman of the Board of Governors of the Federal Reserve
        System. The appointed members shall be selected from United
        States citizens -
            (i) who are not borrowers from, shareholders in, or
          employees or agents of any System institution, who are not
          affiliated with the Farm Credit Administration, and who are
          not actively engaged with a bank or investment organization
          that is a member of the Corporation's selling group for
          System-wide securities; and
            (ii) who are experienced or knowledgeable in corporate and
          public finance, agricultural economics, and financial
          reporting and disclosure.
          (D) The president of the Corporation shall serve as a
        nonvoting member of the board.
      In selecting candidates under subparagraphs (A) and (B), due
      consideration shall be given to choosing individuals
      knowledgeable in agricultural economics, public and corporate
      finance, and financial reporting and disclosure.
      (2) Non-voting representatives
        (A) Assistance Board
          During the period in which the Assistance Board is in
        existence, the board of directors of the Assistance Board shall
        designate one of its directors to serve as a non-voting
        representative to the board of directors of the Corporation.
        (B) Meetings
          The person designated by the Assistance Board under
        subparagraph (A) may attend and participate in all
        deliberations of the board of directors of the Corporation.
        (C) Termination of Assistance Board
          After termination of the Assistance Board, neither the
        Assistance Board nor its successor, the Farm Credit System
        Insurance Corporation, shall have any representation on the
        board of directors of the Corporation.
    (e) Transitional authority
      Until a majority of the voting members of the board of directors
    of the Corporation is elected, which shall occur as soon as is
    practicable after January 6, 1988 -
        (1) the finance committee established under section 2156
      (FOOTNOTE 1) of this title in effect before January 6, 1988, and
      the fiscal agency established under section 2160 (FOOTNOTE 1) of
      this title in effect before January 6, 1988, shall continue to
      operate as if this section had not been enacted; and
       (FOOTNOTE 1) See References in Text note below.
        (2) the board of directors of the predecessor Federal Farm
      Credit Banks Funding Corporation shall be the board of directors
      of the Financial Assistance Corporation.
    (f) Succession
      (1) Assets and liabilities
        The Corporation shall, by operation of law and without any
      further action by the Farm Credit Administration, the predecessor
      Federal Farm Credit Banks Funding Corporation (hereinafter
      referred to in this subsection as ''the predecessor
      corporation'') chartered under this chapter, or any court,
      succeed to the assets of and assume all debts, obligations,
      contracts, and other liabilities of the predecessor corporation,
      matured or unmatured, accrued, absolute, contingent or otherwise,
      and whether or not reflected or reserved against on balance
      sheets, books of account, or records of the predecessor
      corporation.
      (2) Contracts
        The existing contractual obligations, security instruments, and
      title instruments of the predecessor corporation shall, by
      operation of law and without any further action by the Farm
      Credit Administration, the predecessor corporation, or any court,
      become and be converted into obligations, entitlements, and
      instruments of the Corporation.
      (3) Stock
        The stock of the predecessor corporation issued before January
      6, 1988, shall, by operation of law and without any further
      action by the Farm Credit Administration, the predecessor
      corporation, or any court, become and be converted into stock of
      the Corporation established by this section.
      (4) Taxation
        The succession to assets, assumption of liabilities, conversion
      of obligations, instruments, and stock, and effectuation of any
      other transaction by the Corporation to carry out this subsection
      shall not be treated as a taxable event under the laws of any
      State or political subdivision thereof.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.9, Dec. 10, 1971, 85 Stat. 612;
    Pub. L. 100-233, title II, Sec. 204(a), Jan. 6, 1988, 101 Stat.
    1605; Pub. L. 100-399, title II, Sec. 203(a)-(d), Aug. 17, 1988,
    102 Stat. 992, 993; Pub. L. 102-552, title V, Sec. 507, Oct. 28,
    1992, 106 Stat. 4131.)
 
-REFTEXT-
                             REFERENCES IN TEXT
      January 6, 1988, referred to in subsecs. (e) and (f)(3), was in
    the original ''the enactment of this section'', ''the date of the
    enactment of this section'', and ''such date of enactment'', which
    were translated as meaning the date of enactment of Pub. L.
    100-233, which amended this section generally, to reflect the
    probable intent of Congress.
      Section 2156 of this title, referred to in subsec. (e)(1), was
    repealed by Pub. L. 100-233, title II, Sec. 204(b), Jan. 6, 1988,
    101 Stat. 1607.
      For text of section 2160 of this title in effect before January
    6, 1988, referred to in subsec. (e)(1), see 1988 Amendment note
    below.
 
-MISC2-
                                 AMENDMENTS
      1992 - Subsec. (d)(2). Pub. L. 102-552 amended par. (2)
    generally.  Prior to amendment, par. (2) read as follows:
      ''(A) Assistance board. - During the period in which the
    Assistance Board is in existence, the board of directors of the
    Assistance Board shall designate one of its directors to serve as a
    nonvoting representative to the board of directors of the
    Corporation.
      ''(B) Insurance corporation. - After such period, the board of
    directors of the Farm Credit System Insurance Corporation may
    designate one of its directors to serve as a nonvoting
    representative to the board of directors of the Corporation.
      ''(C) Meetings. - The persons so designated by the Assistance
    Board and by the Farm Credit System Insurance Corporation may
    attend and participate in all deliberations of the board of
    directors of the Corporation.''
      1988 - Pub. L. 100-233 amended section generally.  Prior to
    amendment, section read as follows: ''A fiscal agency shall be
    established by the banks for such of their functions relating to
    the issuance, marketing, and handling of their obligations, and
    interbank or intersystem flow of funds as may from time to time be
    required.''
      Subsec. (b)(3). Pub. L. 100-399, Sec. 203(b), inserted
    ''predecessor Federal Farm Credit Banks'' before ''Funding
    Corporation''.
      Subsec. (d)(2)(B), (C). Pub. L. 100-399, Sec. 203(c), substituted
    ''directors of the Corporation'' for ''directors of the Federal
    Farm Credit Banks Funding Corporation''.
      Subsec. (e). Pub. L. 100-399, Sec. 203(d), amended subsec. (e)
    generally.  Prior to amendment, subsec. (e) read as follows:
    ''Until a quorum of the board of directors of the Corporation is
    elected or appointed, the finance committee established under
    section 2156 of this title in effect before January 6, 1988, and
    the fiscal agency established under section 2160 of this title in
    effect before January 6, 1988, shall continue to operate as if this
    section had not been enacted.''
      Subsec. (f). Pub. L. 100-399, Sec. 203(a), added subsec. (f).
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-CITE-
    12 USC Sec. 2161                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part A - Funding
 
-HEAD-
    Sec. 2161. Repealed. Pub. L. 100-399, title I, Sec. 101(a), Aug.
        17, 1988, 102 Stat. 989
 
-MISC1-
      Section, Pub. L. 92-181, title IV, Sec. 4.9A, as added Pub. L.
    99-205, title I, Sec. 105, Dec. 23, 1985, 99 Stat. 1687, authorized
    a central reserve for Farm Credit System.
                          EFFECTIVE DATE OF REPEAL
      Repeal effective immediately after enactment of Pub. L. 100-233,
    approved Jan. 6, 1988, see section 1001(a) of Pub. L. 100-399, set
    out as a note under section 2002 of this title.
 
-CITE-
    12 USC Sec. 2162                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part A - Funding
 
-HEAD-
    Sec. 2162. Protection of borrower stock
 
-STATUTE-
    (a) Retirement of stock
      Notwithstanding any other section of this chapter, each
    institution of the Farm Credit System, when retiring eligible
    borrower stock in accordance with this chapter, shall retire such
    stock at par value.
    (b) Certain powers not affected
      This section does not affect the authority of any institution of
    the Farm Credit System -
        (1) to retire or cancel borrower stock at par value for
      application against a loan in default;
        (2) to cancel borrower stock at par value under section 2202b
      of this title; or
        (3) to apply, against any outstanding indebtedness to a System
      association arising out of or in connection with a liquidation
      referred to in subsection (d)(2) of this section, the par value
      of borrower stock frozen in such liquidation.
    (c) Inability to retire stock at par value
      If an institution is unable to retire eligible borrower stock at
    par value due to the liquidation of the institution, the receiver
    of the institution shall retire such stock at par value as would
    have been retired in the ordinary course of business of the
    institution, and -
        (1) during the 5-year period beginning on January 6, 1988, the
      Assistance Board shall direct the Financial Assistance
      Corporation to provide the receiver with sufficient funds to
      enable the receiver to carry out this subsection; and
        (2) after such 5-year period, the Farm Credit System Insurance
      Corporation shall provide the receiver with sufficient funds from
      the Farm Credit Insurance Fund to enable the receiver to carry
      out this subsection.
    (d) Definitions
      For purposes of this section:
      (1) Borrower stock
        The term ''borrower stock'' means voting and nonvoting stock,
      equivalent contributions to a guaranty fund, participation
      certificates, allocated equities, and other similar equities that
      are subject to retirement under a revolving cycle issued by any
      System institution and held by any person other than any System
      institution.
      (2) Eligible borrower stock
        The term ''eligible borrower stock'' means borrower stock that
      -
          (A) is outstanding on January 6, 1988;
          (B) is issued or allocated after January 6, 1988, but prior
        to the earlier of -
            (i) in the case of each bank and association, the date of
          approval, by the stockholders of such bank or association, of
          the capitalization requirements of the institution in
          accordance with section 2154a of this title; or
            (ii) the date that is 9 months after January 6, 1988;
          (C) was, after January 1, 1983, but before January 6, 1988,
        frozen by an institution that was placed in liquidation; or
          (D) was retired at less than par value by an institution that
        was placed in liquidation after January 1, 1983, but before
        January 6, 1988.
      (3) Institution
        The term ''institution'' means a bank or association chartered
      under this chapter.
      (4) Par value
        The term ''par value'' means -
          (A) in the case of stock, par value;
          (B) in the case of participation certificates and other
        equities and interests not described in subparagraph (C), face
        or equivalent value; or
          (C) in the case of participation certificates and allocated
        equities subject to retirement under a revolving cycle but that
        a System institution elects to retire out of order for
        application against a loan in default or otherwise as provided
        in this chapter, par or face value discounted, at a rate
        determined by the institution, to reflect the present value of
        the equity or interest as of the date of such retirement.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.9A, as added Pub. L. 100-233,
    title I, Sec. 101, Jan. 6, 1988, 101 Stat. 1572; amended Pub. L.
    100-399, title I, Sec. 101(b)-(d), Aug. 17, 1988, 102 Stat. 989.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 4.9A of Pub. L. 92-181, which authorized a
    central reserve for Farm Credit System, was classified to section
    2161 of this title and was repealed by Pub. L. 100-399, Sec.
    101(a).
                                 AMENDMENTS
      1988 - Subsec. (a). Pub. L. 100-399, Sec. 101(b), struck out
    provision that an institution whose capital stock is impaired
    coordinate retirement of stock under this section with the
    activities of the Assistance Board and the Financial Assistance
    Corporation.
      Subsec. (c). Pub. L. 100-399, Sec. 101(c), inserted ''stock'' in
    subsec. heading and amended text generally.  Prior to amendment,
    text read as follows: ''If an institution is unable to retire
    eligible borrower stock at par value due to the freezing of such
    stock during a liquidation of the institution, the receiver of the
    institution shall retire such stock at par value as would have been
    retired in the ordinary course of business of the institution and
    the Financial Assistance Corporation, on request of the Assistance
    Board, shall provide the receiver with sufficient funds to enable
    the receiver to carry out this subsection.''
      Subsec. (d)(2)(B). Pub. L. 100-399, Sec. 101(d), in introductory
    provision substituted ''issued or allocated'' for ''required to be
    purchased, and is purchased, as a condition of obtaining a loan
    made'' and in cl. (i) substituted ''section 2154a of this title''
    for ''section 4.9B''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2154a, 2199, 2277a-9,
    2278b-6 of this title.
 
-CITE-
    12 USC Part B - Dissolution                                  01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part B - Dissolution
    .
 
-HEAD-
    Part B - Dissolution
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-233, title IV, Sec. 418(a)(1), formerly Sec.
    415(a)(1), Jan. 6, 1988, 101 Stat. 1653, renumbered Sec. 418(a)(1),
    Pub. L. 100-399, title IV, Sec. 409(a), Aug. 17, 1988, 102 Stat.
    1003, substituted ''Dissolution'' for ''Dissolution and merger'' as
    part B heading.
 
-CITE-
    12 USC Sec. 2181, 2182                                       01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part B - Dissolution
 
-HEAD-
    Sec. 2181, 2182. Repealed. Pub. L. 100-233, title IV, Sec.
        418(a)(2), (3), formerly Sec. 415(a)(2), (3), Jan. 6, 1988, 101
        Stat. 1653; renumbered Sec. 418(a)(2), (3), Pub. L. 100-399,
        title IV, Sec. 409(a), Aug. 17, 1988, 102 Stat. 1003
 
-MISC1-
      Section 2181, Pub. L. 92-181, title IV, Sec. 4.10, Dec. 10, 1971,
    85 Stat. 612; Pub. L. 96-592, title IV, Sec. 402, Dec. 24, 1980, 94
    Stat. 3446, related to merger of similar banks.
      Section 2182, Pub. L. 92-181, title IV, Sec. 4.11, Dec. 10, 1971,
    85 Stat. 612; Pub. L. 99-205, title II, Sec. 205(f)(4), Dec. 23,
    1985, 99 Stat. 1706, related to board of directors for merged bank.
 
-CITE-
    12 USC Sec. 2183                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part B - Dissolution
 
-HEAD-
    Sec. 2183. Dissolution; voluntary or involuntary liquidation;
        mergers; receiverships or conservators
 
-STATUTE-
    (a) Voluntary liquidation; consent of Farm Credit Administration;
        rules and regulations; minimization of adverse effect;
        voluntary merger; mandatory merger on failure to comply or meet
        obligations
      No institution of the System shall go into voluntary liquidation
    without the consent of the Farm Credit Administration and with such
    consent may liquidate only in accordance with regulations
    prescribed by the Farm Credit Administration. In the case of a
    voluntary liquidation of an association, such regulations, among
    other things, shall direct the supervising bank to institute such
    measures as it deems appropriate to minimize the adverse effect of
    the liquidation on those borrowers whose loans are purchased by or
    otherwise transferred to another System institution.  The Farm
    Credit Administration Board may require an association to merge
    with another association whenever it determines, with the
    concurrence of the board of the supervising bank, that an
    association has failed to meet its outstanding obligations or
    failed to conduct its operations in accordance with this chapter.
    (b) Appointment of conservator or receiver; grounds; action for
        removal; stay of actions or proceedings
      The Farm Credit Administration Board may appoint a conservator or
    receiver for any System institution on the determination by the
    Farm Credit Administration Board that one or more of the following
    exists, or is occurring, with respect to the institution: (1)
    insolvency, in that the assets of the institution are less than its
    obligations to its creditors and others, including its members; (2)
    substantial dissipation of assets or earnings due to any violation
    of law, rules, or regulations, or to any unsafe or unsound
    practice; (3) an unsafe or unsound condition to transact business;
    (4) willful violation of a cease and desist order that has become
    final; (5) concealment of books, papers, records, or assets of the
    institution or refusal to submit books, papers, records, or other
    material relating to the affairs of the institution for inspection
    to any examiner or to any lawful agent of the Farm Credit
    Administration; (6) the institution is unable to timely pay
    principal or interest on any insured obligation (as defined in
    section 2277a(3) of this title) issued by the institution.  The
    Farm Credit Administration Board shall have exclusive power and
    jurisdiction to appoint a conservator or receiver, and such
    receiver or conservator, after the 5-year period beginning on
    January 6, 1988, shall be the Farm Credit System Insurance
    Corporation. If the Farm Credit Administration Board determines
    that a ground for the appointment of a conservator or receiver as
    herein provided exists, the Farm Credit Administration Board may
    appoint ex parte and without notice a conservator or receiver for
    the institution.  In the event of such appointment, the
    institution, within thirty days thereafter, may bring an action in
    the United States district court for the judicial district in which
    the home office of such institution is located, or in the United
    States District Court for the District of Columbia, for an order
    requiring the Farm Credit Administration Board to remove such
    conservator or receiver, and the court shall on the merits, dismiss
    such action or direct the Farm Credit Administration Board to
    remove such conservator or receiver.  On the commencement of such
    an action, the court having jurisdiction of any other action or
    enforcement proceeding authorized under this chapter to which the
    institution is a party shall stay such action or proceeding during
    the pendency of the action for removal of the conservator or
    receiver.
    (c) Involuntary liquidation; rules and regulations; minimization of
        adverse effect
      In the case of an involuntary liquidation of an association,
    regulations of the Farm Credit Administration, among other things,
    shall direct the supervising bank to institute such measures as it
    deems appropriate to minimize the adverse effect of the liquidation
    on those borrowers whose loans are purchased by or otherwise
    transferred to another System institution.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.12, Dec. 10, 1971, 85 Stat. 612;
    Pub. L. 99-205, title I, Sec. 102, title II, Sec. 205(f)(5), title
    III, Sec. 305, Dec. 23, 1985, 99 Stat. 1679, 1706, 1708; Pub. L.
    100-233, title III, Sec. 306, title IV, Sec. 418(a)(4), formerly
    Sec. 415(a)(4), Sec. 431(g), title VIII, Sec. 805(r), Jan. 6, 1988,
    101 Stat. 1622, 1653, 1660, 1716, renumbered Sec. 418(a)(4), Pub.
    L. 100-399, title IV, Sec. 409(a), Aug. 17, 1988, 102 Stat. 1003;
    Pub. L. 100-399, title IX, Sec. 901(f), Aug. 17, 1988, 102 Stat.
    1007.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Subsec. (a). Pub. L. 100-399, Sec. 901(f), substituted
    ''board of the supervising bank'' for ''district board''.
      Pub. L. 100-233, Sec. 415(a)(4), struck out third sentence which
    provided that Associations may voluntarily merge with other like
    associations upon the vote of a majority of each of their
    stockholders present and voting or voting by written proxy at duly
    authorized meetings, and with the approval of the supervising bank
    and the Farm Credit Administration, and substituted ''Board may
    require an association to merge with another association'' for
    ''may require such merger'' in fourth sentence.
      Subsec. (b). Pub. L. 100-233, Sec. 431(g), substituted ''Farm
    Credit Administration Board'' for ''Farm Credit Administration''
    wherever appearing other than in cl. (5).
      Pub. L. 100-233, Sec. 306, added cl. (6) and inserted '', and
    such receiver or conservator, after the 5-year period beginning on
    January 6, 1988, shall be the Farm Credit System Insurance
    Corporation'' before the period at end of second sentence.
      Pub. L. 100-233, Sec. 805(r), substituted ''court shall'' for
    ''court, shall''.
      1985 - Subsec. (a). Pub. L. 99-205, Sec. 205(f)(5), substituted
    ''Farm Credit Administration'' for ''Federal Farm Credit Board'' in
    last sentence.
      Pub. L. 99-205, Sec. 305(a), inserted after first sentence a
    sentence requiring the regulations, in the case of a voluntary
    liquidation of an association, to direct the supervising bank to
    institute appropriate measures to minimize the adverse effect of
    the liquidation on borrowers whose loans are purchased by or
    otherwise transferred to another System institution.
      Subsec. (b). Pub. L. 99-205, Sec. 102, in revising subsec. (b),
    substituted expanded provisions respecting appointment of
    conservator or receiver for former provision, which read as
    follows: ''Upon default of any obligation by any institution of the
    System, such institution may be declared insolvent and placed in
    the hands of a conservator or a receiver appointed by the Governor
    and the proceedings thereon shall be in accordance with regulations
    of the Farm Credit Administration regarding such insolvencies.''
      Subsec. (c). Pub. L. 99-205, Sec. 305(b), added subsec. (c).
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2278a-6, 2279cc of this
    title.
 
-CITE-
    12 USC Sec. 2184                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part B - Dissolution
 
-HEAD-
    Sec. 2184. Communications with stockholders
 
-STATUTE-
    (a) Provision of stockholder lists
      (1) In general
        Within 7 days after receipt of a written request by a
      stockholder, a bank for cooperatives, Federal land bank
      association, or production credit association shall provide a
      current list of its stockholders to such requesting stockholder.
      (2) Conditions
        As a condition of providing a stockholder list under paragraph
      (1), the bank or association may require that the stockholder
      agree and certify in writing that the stockholder will -
          (A) use the list exclusively for communicating with
        stockholders for permissible purposes; and
          (B) not make the list available to any person, other than the
        stockholder's attorney or accountant, without first obtaining
        the written consent of the institution.
    (b) Alternative communications
      (1) Request to issue
        As an alternative to receiving a list of stockholders, a
      stockholder may request the institution to mail or otherwise
      furnish to each stockholder a communication for a permissible
      purpose on behalf of the requesting stockholder.
      (2) When permissible
        Alternative communications may be used, at the discretion of
      the requesting stockholder, if the requester agrees to defray the
      reasonable costs of the communication.  If the requester decides
      to exercise this option, the institution shall provide the
      requester with a written estimate of the costs of handling and
      mailing the communication as soon as is practicable after receipt
      of the stockholder's request to furnish the communication.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.12A, as added Pub. L. 100-233,
    title IV, Sec. 420, Jan. 6, 1988, 101 Stat. 1653.)
 
-CITE-
    12 USC Part C - Rights of Borrowers; Loan Restructuring      01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part C - Rights of Borrowers; Loan Restructuring
    .
 
-HEAD-
    Part C - Rights of Borrowers; Loan Restructuring
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-233, title VIII, Sec. 804(b), Jan. 6, 1988,
    101 Stat. 1715, substituted ''Rights of Borrowers; Loan
    Restructuring'' for ''Rights of Applicants'' as part C heading.
 
-CITE-
    12 USC Sec. 2199                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part C - Rights of Borrowers; Loan Restructuring
 
-HEAD-
    Sec. 2199. Disclosure
 
-STATUTE-
    (a) In general
      In accordance with regulations of the Farm Credit Administration,
    qualified lenders shall provide to borrowers, for all loans that
    are not subject to the Truth in Lending Act (15 U.S.C. 1601 et
    seq.), meaningful and timely disclosure not later than the time of
    the loan closing, of -
        (1) the current rate of interest on the loan;
        (2) in the case of an adjustable or variable rate loan, the
      amount and frequency by which the interest rate can be increased
      during the term of the loan or, if there are no such limitations,
      a statement to that effect, and the factors (including the cost
      of funds, operating expenses, and provision for loan losses) that
      will be taken into account by the qualified lender in determining
      adjustments to the interest rate;
        (3) the effect, as shown by a representative example or
      examples, of any loan origination charges or purchases of stock
      or participation certificates on the effective rate of interest;
        (4) any change in the interest rate applicable to the
      borrower's loan, and notice to the borrower of a change in the
      interest rate applicable to the loan of the borrower may be made
      within a reasonable time after the effective date of an increase
      or decrease in the interest rate;
        (5) except with respect to stock guaranteed under section 2162
      of this title, a statement indicating that stock that is
      purchased is at risk; and
        (6) a statement indicating the various types of loan options
      available to borrowers, with an explanation of the terms and
      borrowers' rights that apply to each type of loan.
    (b) Differential interest rates
      A qualified lender offering more than one rate of interest to
    borrowers shall, at the request of a borrower of a loan -
        (1) provide a review of the loan to determine if the proper
      interest rate has been established;
        (2) explain to the borrower in writing the basis for the
      interest rate charged; and
        (3) explain to the borrower in writing how the credit status of
      the borrower may be improved to receive a lower interest rate on
      the loan.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.13, as added Pub. L. 99-205,
    title III, Sec. 301(b), Dec. 23, 1985, 99 Stat. 1707; amended Pub.
    L. 100-233, title I, Sec. 103, 109, Jan. 6, 1988, 101 Stat. 1579,
    1584; Pub. L. 104-105, title II, Sec. 207, Feb. 10, 1996, 110 Stat.
    173.)
 
-REFTEXT-
                             REFERENCES IN TEXT
      The Truth in Lending Act, referred to in subsec. (a), is title I
    of Pub. L. 90-321, May 29, 1968, 82 Stat. 146, as amended, which is
    classified generally to subchapter I (Sec. 1601 et seq.) of chapter
    41 of Title 15, Commerce and Trade. For complete classification of
    this Act to the Code, see Short Title note set out under section
    1601 of Title 15 and Tables.
 
-MISC2-
                              PRIOR PROVISIONS
      A prior section 4.13 of Pub. L. 92-181, title IV, Dec. 10, 1971,
    85 Stat. 613, was renumbered section 4.13B by Pub. L. 99-205, title
    III, Sec. 301(a), Dec. 23, 1985, 99 Stat. 1707, and is classified
    to section 2201 of this title.
                                 AMENDMENTS
      1996 - Subsec. (a)(4). Pub. L. 104-105 inserted before semicolon
    at end '', and notice to the borrower of a change in the interest
    rate applicable to the loan of the borrower may be made within a
    reasonable time after the effective date of an increase or decrease
    in the interest rate''.
      1988 - Pub. L. 100-233, Sec. 109, designated existing provisions
    as subsec. (a), inserted heading, and added subsec. (b).
      Pub. L. 100-233, Sec. 103, amended section generally,
    substituting introductory provisions and cls. (1) to (6) for former
    subsecs. (a) and (b).
                               EFFECTIVE DATE
      Section effective thirty days after Dec. 23, 1985, see section
    401 of Pub. L. 99-205, set out as an Effective Date of 1985
    Amendment note under section 2001 of this title.
 
-CITE-
    12 USC Sec. 2200                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part C - Rights of Borrowers; Loan Restructuring
 
-HEAD-
    Sec. 2200. Access to documents and information
 
-STATUTE-
      In accordance with regulations of the Farm Credit Administration,
    qualified lenders shall provide their borrowers, at the time of
    execution of loans, copies of all documents signed by the borrower
    and at any time thereafter, on a borrower's request, copies of all
    documents signed or delivered by the borrower and at any time, on
    request, a copy of the institution's articles of incorporation or
    charter and bylaws and copies of each appraisal of the borrower's
    assets made or used by the qualified lender.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.13A, as added Pub. L. 99-205,
    title III, Sec. 301(b), Dec. 23, 1985, 99 Stat. 1707; amended Pub.
    L. 100-233, title I, Sec. 104, Jan. 6, 1988, 101 Stat. 1579.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-233 substituted ''qualified lenders'' for
    ''System institutions'' and inserted ''and copies of each appraisal
    of the borrower's assets made or used by the qualified lender''
    before period at end.
                               EFFECTIVE DATE
      Section effective thirty days after Dec. 23, 1985, see section
    401 of Pub. L. 99-205, set out as an Effective Date of 1985
    Amendment note under section 2001 of this title.
 
-CITE-
    12 USC Sec. 2201                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part C - Rights of Borrowers; Loan Restructuring
 
-HEAD-
    Sec. 2201. Notice of action on application
 
-STATUTE-
    (a) Loan applications
      Each qualified lender to which a person has applied for a loan
    shall provide the person with prompt written notice of -
        (1) the action on the application;
        (2) if the loan applied for is reduced or denied, the reasons
      for such action; and
        (3) the applicant's right to review under section 2202 of this
      title.
    (b) Distressed loans
      Each qualified lender that has a distressed loan outstanding that
    is subject to restructuring requirements under this chapter shall
    provide, in accordance with regulations prescribed by the Farm
    Credit Administration, the borrower with prompt written notice of -
        (1) any action taken with respect to restructuring the loan
      under section 2202a of this title;
        (2) if restructuring is denied, the reasons for such action;
      and
        (3) the borrower's right to review under section 2202 of this
      title.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.13B, formerly Sec. 4.13, Dec. 10,
    1971, 85 Stat. 613, renumbered Sec. 4.13B and amended Pub. L.
    99-205, title III, Sec. 301(a), 302, Dec. 23, 1985, 99 Stat. 1707,
    1708; Pub. L. 100-233, title I, Sec. 105, Jan. 6, 1988, 101 Stat.
    1579.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-233 amended section generally.  Prior to
    amendment, section read as follows: ''Every applicant for a loan
    from an institution of the System shall be entitled to prompt
    written notice of action on his application, and, if the loan
    applied for is reduced or denied, the reason for such action, and
    of the applicant's right to review under section 2202 of this
    title.''
      1985 - Pub. L. 99-205, Sec. 302, provided for a ''written''
    notice and for the applicant's right to review under section 2202
    of this title.
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2202 of this title.
 
-CITE-
    12 USC Sec. 2202                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part C - Rights of Borrowers; Loan Restructuring
 
-HEAD-
    Sec. 2202. Reconsideration of actions
 
-STATUTE-
    (a) Credit review committees
      (1) In general
        The board of directors of each qualified lender shall establish
      one or more credit review committees, which shall include farmer
      board representation.
      (2) Membership
        In no case shall a loan officer involved in the initial
      decision on a loan serve on the credit review committee when the
      committee reviews such loan.
    (b) Review of decisions
      (1) Denials or reductions
        Any applicant for a loan from a qualified lender that has
      received a written notice issued under section 2201 of this title
      of a decision to deny or reduce the loan applied for may submit a
      written request, not later than 30 days after receiving a notice
      denying or reducing the amount of the loan application, to obtain
      a review of the decision before the credit review committee.
      (2) Denials of restructuring
        A borrower of a loan from a qualified lender that has received
      notice, under section 2201 of this title, of a decision to deny
      loan restructuring with respect to a loan made to the borrower,
      if the borrower so requests in writing within 7 days after
      receiving such notice, may obtain a review of such decision in
      person before the credit review committee.
    (c) Personal appearance
      An applicant for a loan or for restructuring, who is entitled to
    and has requested a review under this section, may appear in person
    before the credit review committee, and may be accompanied by
    counsel or by any other representative of such person's choice, to
    seek a reversal of the decision on the application under review.
    (d) Independent appraisal
      (1) In general
        An appeal filed with a credit review committee under this
      section may include, as a part of the request for a review of the
      decision filed under subsection (b)(1) or (2) of this section, a
      request for an independent appraisal, by an accredited appraiser,
      of any interests in property securing the loan (other than the
      stock or participation certificates of the qualified lender held
      by the borrower).
      (2) Arrangement and cost
        Within 30 days after a request for an appraisal under paragraph
      (1), the credit review committee shall present the borrower with
      a list of three appraisers approved by the appropriate qualified
      lender from which the borrower shall select an appraiser to
      conduct the appraisal the cost of which shall be borne by the
      borrower, and shall consider the results of such appraisal in any
      final determination with respect to the loan.
      (3) Copy to borrower
        A copy of any appraisal made under this subsection shall be
      provided to the borrower.
      (4) Additional collateral
        An independent appraisal shall be permitted if additional
      collateral for a loan is demanded by the qualified lender when
      determining whether to restructure the loan.
    (e) Notification of applicant
      Promptly after a review by the credit review committee, the
    committee shall notify the applicant or borrower, as the case may
    be, in writing of the decision of the committee and the reasons for
    the decision.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.14, Dec. 10, 1971, 85 Stat. 613;
    Pub. L. 99-205, title III, Sec. 303, Dec. 23, 1985, 99 Stat. 1708;
    Pub. L. 100-233, title I, Sec. 106, title VIII, Sec. 805(s), Jan.
    6, 1988, 101 Stat. 1580, 1716; Pub. L. 100-399, title I, Sec. 103,
    title VII, Sec. 702(b), Aug. 17, 1988, 102 Stat. 990, 1006.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-233, Sec. 805(s), which directed amendment of
    this section by substituting ''committees'' for ''committee(s)'',
    ''2201'' for ''2199'', and ''review'' for ''reviews'', was repealed
    by Pub. L. 100-399, Sec. 702(b). See Construction of 1988 Amendment
    note below.
      Pub. L. 100-233, Sec. 106, amended section generally.  Prior to
    amendment, section read as follows: ''The board of directors of
    each Farm Credit System institution shall establish one or more
    credit review committee(s), which shall include farmer board
    respresentation. (sic) Any loan applicant who has received written
    notice, under section 2199 of this title, of a decision to deny or
    reduce the loan applied for, if the applicant so requests in
    writing within thirty days after receiving such notice, may obtain
    a review of such decision in person before the credit review
    committee.  When a loan applicant requests review of an adverse
    credit decision, a majority of persons serving on such reviews
    committee must be persons who were not involved in making the
    adverse decision.  Promptly after any such review, the applicant
    shall be notified in writing of the credit review committee's
    decision and the reasons therefor.''
      Subsec. (b)(1). Pub. L. 100-399, Sec. 103(a), substituted
    ''before the'' for ''by a''.
      Subsec. (d)(1). Pub. L. 100-399, Sec. 103(b), inserted ''or
    (2)''.
      1985 - Pub. L. 99-205, in amending section generally, substituted
    provisions respecting reconsideration of action on loan application
    for prior reconsideration provisions which read as follows: ''Any
    applicant who has reason to believe that the action on his
    application by an association failed to take into account facts
    pertinent to his application, or has misinterpreted or failed to
    properly apply the applicable law or rules and regulations
    governing his application, may, if he so requests in writing within
    thirty days of the date of that notice, request an informal hearing
    on his application and the action of the association in reduction
    or denial thereof, or the reason for such action, in person before
    the loan committee or officer or employee thereof authorized to act
    on applications under section 2033(11) or 2093(18) of this title.
    Promptly after such a hearing, he shall be notified of the decision
    upon reconsideration and the reasons therefor.''
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
                       CONSTRUCTION OF 1988 AMENDMENT
      Section 702(b) of Pub. L. 100-399 provided that section 805(s) of
    Pub. L. 100-233, cited as a credit to this section, is repealed and
    that this section shall be applied and administered as if such
    section had not been enacted.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2201, 2202a, 2202d,
    2279aa-9 of this title.
 
-CITE-
    12 USC Sec. 2202a                                            01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part C - Rights of Borrowers; Loan Restructuring
 
-HEAD-
    Sec. 2202a. Restructuring distressed loans
 
-STATUTE-
    (a) Definitions
      As used in this part:
      (1) Application for restructuring
        The term ''application for restructuring'' means a written
      request -
          (A) from a borrower for the restructuring of a distressed
        loan in accordance with a preliminary restructuring plan
        proposed by the borrower as a part of the application;
          (B) submitted on the appropriate forms prescribed by the
        qualified lender; and
          (C) accompanied by sufficient financial information and
        repayment projections, where appropriate, as required by the
        qualified lender to support a sound credit decision.
      (2) Cost of foreclosure
        The term ''cost of foreclosure'' includes -
          (A) the difference between the outstanding balance due on a
        loan made by a qualified lender and the liquidation value of
        the loan, taking into consideration the borrower's repayment
        capacity and the liquidation value of the collateral used to
        secure the loan;
          (B) the estimated cost of maintaining a loan as a
        nonperforming asset;
          (C) the estimated cost of administrative and legal actions
        necessary to foreclose a loan and dispose of property acquired
        as the result of the foreclosure, including attorneys' fees and
        court costs;
          (D) the estimated cost of changes in the value of collateral
        used to secure a loan during the period beginning on the date
        of the initiation of an action to foreclose or liquidate the
        loan and ending on the date of the disposition of the
        collateral; and
          (E) all other costs incurred as the result of the foreclosure
        or liquidation of a loan.
      (3) Distressed loan
        The term ''distressed loan'' means a loan that the borrower
      does not have the financial capacity to pay according to its
      terms and that exhibits one or more of the following
      characteristics:
          (A) The borrower is demonstrating adverse financial and
        repayment trends.
          (B) The loan is delinquent or past due under the terms of the
        loan contract.
          (C) One or both of the factors listed in subparagraphs (A)
        and (B), together with inadequate collateralization, present a
        high probability of loss to the lender.
      (4) Foreclosure proceeding
        The term ''foreclosure proceeding'' means -
          (A) a foreclosure or similar legal proceeding to enforce a
        lien on property, whether real or personal, that secures a
        nonaccrual or distressed loan; or
          (B) the seizing of and realizing on nonreal property
        collateral, other than collateral subject to a statutory lien
        arising under subchapter I or II of this chapter, to effect
        collection of a nonaccrual or distressed loan.
      (5) Loan
        (A) In general
          Subject to subparagraph (B), the term ''loan'' means a loan
        made to a farmer, rancher, or producer or harvester of aquatic
        products, for any agricultural or aquatic purpose and other
        credit needs of the borrower, including financing for basic
        processing and marketing directly related to the borrower's
        operations and those of other eligible farmers, ranchers, and
        producers or harvesters of aquatic products.
        (B) Exclusion for loans designated for sale into secondary
            market
          (i) In general
            Except as provided in clause (ii), the term ''loan'' does
          not include a loan made on or after February 10, 1996, that
          is designated, at the time the loan is made, for sale into a
          secondary market.
          (ii) Unsold loans
            (I) In general
              Except as provided in subclause (II), if a loan
            designated for sale under clause (i) is not sold into a
            secondary market during the 180-day period that begins on
            the date of the designation, the provisions of this section
            and sections 2202, 2202b, 2202c, 2202d, and 2219a of this
            title that would otherwise apply to the loan in the absence
            of the exclusion described in clause (i) shall become
            effective with respect to the loan.
            (II) Later sale
              If a loan described in subclause (I) is sold into a
            secondary market after the end of the 180-day period
            described in subclause (I), subclause (I) shall not apply
            with respect to the loan beginning on the date of the sale.
      (6) Qualified lender
        The term ''qualified lender'' means -
          (A) a System institution that makes loans (as defined in
        paragraph (5)) except a bank for cooperatives; and
          (B) each bank, institution, corporation, company, union, and
        association described in section 2015(b)(1)(B) of this title
        but only with respect to loans discounted or pledged under
        section 2015(b)(1) of this title.
      (7) Restructure and restructuring
        The terms ''restructure'' and ''restructuring'' include
      rescheduling, reamortization, renewal, deferral of principal or
      interest, monetary concessions, and the taking of any other
      action to modify the terms of, or forbear on, a loan in any way
      that will make it probable that the operations of the borrower
      will become financially viable.
    (b) Notice
      (1) In general
        On a determination by a qualified lender that a loan made by
      the lender is or has become a distressed loan, the lender shall
      provide written notice to the borrower that the loan may be
      suitable for restructuring, and include with such notice -
          (A) a copy of the policy of the lender established under
        subsection (g) of this section that governs the treatment of
        distressed loans; and
          (B) all materials necessary to enable the borrower to submit
        an application for restructuring on the loan.
      (2) Notice before foreclosure
        Not later than 45 days before any qualified lender begins
      foreclosure proceedings with respect to a loan outstanding to any
      borrower, the lender shall notify the borrower that the loan may
      be suitable for restructuring and that the lender will review any
      such suitable loan for restructuring, and shall include with such
      notice a copy of the policy and the materials described in
      paragraph (1).
      (3) Limitation on foreclosure
        No qualified lender may foreclose or continue any foreclosure
      proceeding with respect to any distressed loan before the lender
      has completed any pending consideration of the loan for
      restructuring under this section.
    (c) Meetings
      On determination by a qualified lender that a loan made by the
    lender is or has become a distressed loan, the lender shall provide
    a reasonable opportunity for the borrower thereof to personally
    meet with a representative of the lender -
        (1) to review the status of the loan, the financial condition
      of the borrower, and the suitability of the loan for
      restructuring; and
        (2) with respect to a loan that is in nonaccrual status, to
      develop a plan for restructuring the loan if the loan is suitable
      for restructuring.
    (d) Consideration of applications
      (1) In general
        When a qualified lender receives an application for
      restructuring from a borrower, the qualified lender shall
      determine whether or not to restructure the loan, taking into
      consideration -
          (A) whether the cost to the lender of restructuring the loan
        is equal to or less than the cost of foreclosure;
          (B) whether the borrower is applying all income over and
        above necessary and reasonable living and operating expenses to
        the payment of primary obligations;
          (C) whether the borrower has the financial capacity and the
        management skills to protect the collateral from diversion,
        dissipation, or deterioration;
          (D) whether the borrower is capable of working out existing
        financial difficulties, reestablishing a viable operation, and
        repaying the loan on a rescheduled basis; and
          (E) in the case of a distressed loan that is not delinquent,
        whether restructuring consistent with sound lending practices
        may be taken to reasonably ensure that the loan will not become
        a loan that it is necessary to place in nonaccrual status.
      (2) Applications not required for restructuring plans
        This section shall not prevent a qualified lender from
      proposing a restructuring plan for an individual borrower in the
      absence of an application for restructuring from the borrower.
    (e) Restructuring
      (1) In general
        If a qualified lender determines that the potential cost to
      such qualified lender of restructuring the loan in accordance
      with a proposed restructuring plan is less than or equal to the
      potential cost of foreclosure, the qualified lender shall
      restructure the loan in accordance with the plan.
      (2) Computation of cost of restructuring
        In determining whether the potential cost to the qualified
      lender of restructuring a distressed loan is less than or equal
      to the potential cost of foreclosure, a qualified lender shall
      consider all relevant factors, including -
          (A) the present value of interest income and principal
        forgone by the lender in carrying out the restructuring plan;
          (B) reasonable and necessary administrative expenses involved
        in working with the borrower to finalize and implement the
        restructuring plan;
          (C) whether the borrower has presented a preliminary
        restructuring plan and cash-flow analysis taking into account
        income from all sources to be applied to the debt and all
        assets to be pledged, showing a reasonable probability that
        orderly debt retirement will occur as a result of the proposed
        restructuring; and
          (D) whether the borrower has furnished or is willing to
        furnish complete and current financial statements in a form
        acceptable to the institution.
    (f) Least cost alternative
      If two or more restructuring alternatives are available to a
    qualified lender under this section with respect to a distressed
    loan, the lender shall restructure the loan in conformity with the
    alternative that results in the least cost to the lender.
    (g) Restructuring policy
      (1) Establishment
        Each bank board of directors shall develop a policy within 60
      days after January 6, 1988, that is consistent with this section,
      to govern the restructuring of distressed loans.  Such policy
      shall constitute the restructuring policy of each qualified
      lender within the district.
      (2) Contents of policy
        The policy established under paragraph (1) shall include an
      explanation of -
          (A) the procedure for submitting an application for
        restructuring; and
          (B) the right of borrowers with distressed loans to seek
        review by a credit review committee in accordance with section
        2202 of this title of a denial of an application for
        restructuring.
      (3) Submission of policy to FCA
        Each bank board shall submit the policy of the district
      governing the treatment of distressed loans under this section to
      the Farm Credit Administration. Notwithstanding the duty imposed
      by the preceding sentence, the other duties imposed by this
      section shall take effect on January 6, 1988.
    (h) Reports
      During the 5-year period beginning on January 6, 1988, each
    qualified lender shall submit semiannual reports to the Farm Credit
    Administration containing -
        (1) the results of the review of distressed loans of the
      lender; and
        (2) the financial effect of loan restructurings and
      liquidations on the lender.
    (i) Compliance
      The Farm Credit Administration may issue a directive requiring
    compliance with any provision of this section to any qualified
    lender that fails to comply with such provision.
    (j) Permitted foreclosures
      This section shall not be construed to prevent any qualified
    lender from enforcing any contractual provision that allows the
    lender to foreclose a loan, or from taking such other lawful action
    as the lender deems appropriate, if the lender has reasonable
    grounds to believe that the loan collateral will be destroyed,
    dissipated, consumed, concealed, or permanently removed from the
    State in which the collateral is located.
    (k) Application of section
      The time limitation prescribed in subsection (b)(2) of this
    section, and the requirements of subsection (c) of this section,
    shall not apply to a loan that became a distressed loan before
    January 6, 1988, if the borrower and lender of the loan are in the
    process of negotiating loan restructuring with respect to the loan.
    (l) Assistance in restructuring
      Each Farm Credit Bank, on request of any production credit
    association, may assist the association in restructuring loans
    under this section.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.14A, as added Pub. L. 100-233,
    title I, Sec. 102(a), Jan. 6, 1988, 101 Stat. 1574; amended Pub. L.
    100-399, title I, Sec. 102(a)-(f), Aug. 17, 1988, 102 Stat. 990;
    Pub. L. 104-105, title II, Sec. 208(a), Feb. 10, 1996, 110 Stat.
    173.)
 
-MISC1-
                                 AMENDMENTS
      1996 - Subsec. (a)(5). Pub. L. 104-105 designated existing
    provisions as subpar. (A), inserted subpar. heading, substituted
    ''Subject to subparagraph (B), the term'' for ''The term'', and
    added subpar. (B).
      1988 - Subsec. (a). Pub. L. 100-399, Sec. 102(a), struck out
    ''(other than in sections 2205 and 2206 of this title)'' after ''in
    this part''.
      Subsec. (a)(6)(B). Pub. L. 100-399, Sec. 102(b), substituted
    ''section 2015(b)(1)(B) of this title'' for ''section 2074(a)(2) of
    this title'' and ''section 2015(b)(1) of this title'' for ''section
    2074(a) of this title''.
      Subsec. (e)(1). Pub. L. 100-399, Sec. 102(c), substituted ''cost
    to such qualified'' for ''cost to a qualified''.
      Subsec. (g)(1). Pub. L. 100-399, Sec. 102(d), substituted
    ''bank'' for ''farm credit district''.
      Subsec. (g)(3). Pub. L. 100-399, Sec. 102(e), substituted ''bank
    board'' for ''district board''.
      Subsec. (l). Pub. L. 100-399, Sec. 102(f), substituted ''Farm
    Credit Bank'' for ''Federal intermediate credit bank''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by section 102(b), (f) of Pub. L. 100-399 effective
    immediately after amendment made by section 401 of Pub. L. 100-233,
    which was effective 6 months after Jan. 6, 1988, and amendment by
    section 102(a), (c)-(e) of Pub. L. 100-399 effective as if enacted
    immediately after enactment of Pub. L. 100-233, which was approved
    Jan. 6, 1988, see section 1001 of Pub. L. 100-399, set out as a
    note under section 2002 of this title.
                             SENSE OF CONGRESS
      Section 102(b) of Pub. L. 100-233 provided that: ''It is the
    sense of Congress that the banks and associations (except banks for
    cooperatives) operating under the Farm Credit Act of 1971 (12
    U.S.C. 2001 et seq.) should administer distressed loans to farmers
    with the objective of using the loan guarantee programs of the
    Farmers Home Administration and other loan restructuring measures,
    including participation in interest rate buy-down programs that are
    Federally or State funded, and other Federal and State sponsored
    financial assistance programs that offer relief to financially
    distressed farmers, as alternatives to foreclosure, considering the
    availability and appropriateness of such programs on a case-by-case
    basis.''
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2201, 2202b, 2202c, 2267,
    2268, 2279aa-9 of this title.
 
-CITE-
    12 USC Sec. 2202b                                            01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part C - Rights of Borrowers; Loan Restructuring
 
-HEAD-
    Sec. 2202b. Effect of restructuring on borrower stock
 
-STATUTE-
    (a) Farm Credit Bank
      If a Farm Credit Bank forgives and writes off, under section
    2202a of this title, any of the principal outstanding on a loan
    made to any borrower, the Federal land bank association of which
    the borrower is a member and stockholder shall cancel the same
    dollar amount of borrower stock held by the borrower in respect of
    the loan, up to the total amount of such stock, and, to the extent
    provided for in the bylaws of the bank relating to its
    capitalization, the bank shall retire an equal amount of stock
    owned by the Federal land bank association.
    (b) Production credit association
      If a production credit association forgives and writes off, under
    section 2202a of this title, any of the principal outstanding on a
    loan made to any borrower, the association shall cancel the same
    dollar amount of borrower stock held by the borrower in respect of
    the loan, up to the total amount of such stock.
    (c) Retention of stock
      Notwithstanding subsections (a) and (b) of this section, the
    borrower shall be entitled to retain at least one share of stock to
    maintain the borrower's membership and voting interest in the
    association.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.14B, as added Pub. L. 100-233,
    title I, Sec. 102(a), Jan. 6, 1988, 101 Stat. 1577; amended Pub. L.
    100-399, title I, Sec. 102(g), Aug. 17, 1988, 102 Stat. 990.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Subsec. (a). Pub. L. 100-399 substituted in subsec.
    heading ''Farm Credit Bank'' for ''Federal land bank'' and in text
    ''a Farm Credit Bank'' for ''a Federal land bank'' and '', to the
    extent provided for in the bylaws of the bank relating to
    capitalization, the bank shall'' for ''the Federal land bank
    shall''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective immediately after
    amendment made by section 401 of Pub. L. 100-233, which was
    effective 6 months after Jan. 6, 1988, see section 1001(b) of Pub.
    L. 100-399, set out as a note under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2162, 2202a, 2279aa-9 of
    this title.
 
-CITE-
    12 USC Sec. 2202c                                            01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part C - Rights of Borrowers; Loan Restructuring
 
-HEAD-
    Sec. 2202c. Review of restructuring denials
 
-STATUTE-
    (a) Requirements for restructuring by System institutions
      (1) Existing nonaccrual loans
        Within 9 months after a qualified lender is certified under
      section 2278a-4 of this title, such lender shall review each loan
      that has not been previously restructured and that is in
      nonaccrual status on the date the lender is certified, and
      determine whether to restructure the loan.
      (2) New nonaccrual loans
        Within 6 months after a loan made by a certified lender is
      placed in nonaccrual status, the lender shall determine whether
      to restructure the loan.
    (b) Special asset groups
      (1) Establishment
        Within 30 days after a qualified lender in a district is
      certified to issue preferred stock under section 2278b-7 of this
      title, the Farm Credit Bank board shall establish a special asset
      group that shall review each determination by the lender not to
      restructure a loan.
      (2) Restructuring plan
        If a special asset group determines under paragraph (1) that a
      loan under review should be restructured, the group shall
      prescribe a restructuring plan for the loan that the qualified
      lender shall implement.
    (c) National Special Asset Council
      (1) Establishment
        A National Special Asset Council shall be established by the
      Assistance Board to -
          (A) monitor compliance with the restructuring requirements of
        this section by qualified lenders certified to issue preferred
        stock under section 2278b-7 of this title, and by special asset
        groups established under subsection (b) of this section; and
          (B) review a sample of determinations made by each special
        asset group that a loan will not be restructured.
      (2) Review of determination
        The National Special Asset Council shall review a sufficient
      number of determinations made by each special asset group to
      foreclose on any loan to assure the Council that such group is
      complying with this section.  With regard to each determination
      reviewed, the Council shall make an independent judgment on the
      merits of the decision to foreclose rather than restructure the
      loan.
      (3) Noncompliance
        If the National Special Asset Council determines that any
      special asset group is not in substantial compliance with this
      section, the Council shall notify the group of the determination,
      and may take such other action as the Council considers necessary
      to ensure that such group complies with this section.
    (d) Report
      With respect to determinations by a special asset group that a
    loan will not be restructured, the special asset group shall submit
    to the National Special Asset Council a report evaluating the loan
    and the basis for the determination that the loan should not be
    restructured.
    (e) Restructuring factors
      In determining whether a loan is to be restructured, the National
    Special Asset Council, each special asset group, and each qualified
    lender certified under section 2278a-4 of this title shall take
    into consideration the factors specified in section 2202a(d)(1) of
    this title.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.14C, as added Pub. L. 100-233,
    title I, Sec. 102(a), Jan. 6, 1988, 101 Stat. 1578; amended Pub. L.
    100-399, title I, Sec. 102(h), Aug. 17, 1988, 102 Stat. 990.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Subsec. (b)(1). Pub. L. 100-399 substituted ''Farm Credit
    Bank board'' for ''district board of such district''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective immediately after
    amendment made by section 401 of Pub. L. 100-233, which was
    effective 6 months after Jan. 6, 1988, see section 1001(b) of Pub.
    L. 100-399, set out as a note under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2202a, 2279aa-9 of this
    title.
 
-CITE-
    12 USC Sec. 2202d                                            01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part C - Rights of Borrowers; Loan Restructuring
 
-HEAD-
    Sec. 2202d. Protection of borrowers who meet all loan obligations
 
-STATUTE-
    (a) Foreclosure prohibited
      A qualified lender may not foreclose on any loan because of the
    failure of the borrower thereof to post additional collateral, if
    the borrower has made all accrued payments of principal, interest,
    and penalties with respect to the loan.
    (b) Prohibition against required principal reduction
      A qualified lender may not require any borrower to reduce the
    outstanding principal balance of any loan made to the borrower by
    any amount that exceeds the regularly scheduled principal
    installment payment (when due and payable), unless -
        (1) the borrower sells or otherwise disposes of part or all of
      the collateral; or
        (2) the parties agree otherwise in a written agreement entered
      into by the parties.
    (c) Nonenforcement
      After a borrower has made all accrued payments of principal,
    interest, and penalties with respect to a loan made by a qualified
    lender, the lender shall not enforce acceleration of the borrower's
    repayment schedule due to the borrower having not timely made one
    or more principal or interest payments.
    (d) Placing loans in nonaccrual status
      (1) Notification
        If a qualified lender places any loan in nonaccrual status, the
      lender shall document such change of status and promptly notify
      the borrower thereof in writing of such action and the reasons
      therefor.
      (2) Review of denial
        If the borrower was not delinquent in any principal or interest
      payment under the loan at the time of such action and the
      borrower's request to have the loan placed back into accrual
      status is denied, the borrower may obtain a review of such denial
      before the appropriate credit review committee under section 2202
      of this title.
      (3) Application
        This subsection shall only apply if a loan being placed in
      nonaccrual status results in an adverse action being taken
      against the borrower.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.14D, as added Pub. L. 100-233,
    title I, Sec. 107, Jan. 6, 1988, 101 Stat. 1581.)
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2202a, 2279aa-9 of this
    title.
 
-CITE-
    12 USC Sec. 2202e                                            01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part C - Rights of Borrowers; Loan Restructuring
 
-HEAD-
    Sec. 2202e. Waiver of mediation rights by borrowers
 
-STATUTE-
      No System institution may make a loan secured by a mortgage or
    lien on agricultural property to a borrower on the condition that
    the borrower waive any right under the mediation program of any
    State.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.14E, as added Pub. L. 100-233,
    title V, Sec. 511, Jan. 6, 1988, 101 Stat. 1664; amended Pub. L.
    103-354, title II, Sec. 282(f)(2), Oct. 13, 1994, 108 Stat. 3235.)
 
-MISC1-
                                 AMENDMENTS
      1994 - Pub. L. 103-354 struck out ''agricultural loan'' before
    ''mediation program''.
 
-CITE-
    12 USC Part D - Activities of Institutions of the System     01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part D - Activities of Institutions of the System
    .
 
-HEAD-
    Part D - Activities of Institutions of the System
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-233, title VIII, Sec. 805(t)(1), Jan. 6, 1988,
    101 Stat. 1716, added heading for part D.
 
-CITE-
    12 USC Sec. 2203                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part D - Activities of Institutions of the System
 
-HEAD-
    Sec. 2203. Nomination of association directors; representative
        selection of nominees
 
-STATUTE-
      Each production credit association and each Federal land bank
    association shall elect a nominating committee by vote of the
    stockholders at the annual meeting to serve for the following
    year.  Each nominating committee shall review lists of farmers from
    the association territory, determine their willingness to serve,
    and submit for election a slate of eligible candidates which shall
    include at least two nominees for each elective office to be
    filled.  In doing so, the committee shall endeavor to assure
    representation to all sections of the association territory and as
    nearly as possible to all types of agriculture practiced within the
    area.  Employees of the association shall not be eligible to be
    nominated, elected, or serve as a member of the board.  Nominations
    shall also be accepted from the floor.  Members of the board are
    not eligible to serve on the nominating committee.  Regulations of
    the Farm Credit Administration governing the election of bank
    directors shall similarly assure a choice of two nominees for each
    elective office to be filled and that the bank board represent as
    nearly as possible all types of agriculture in the district.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.15, Dec. 10, 1971, 85 Stat. 613;
    Pub. L. 100-399, title IX, Sec. 901(g), Aug. 17, 1988, 102 Stat.
    1007.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-399 substituted ''bank directors'' for
    ''district directors'' and ''bank board'' for ''district board''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-CITE-
    12 USC Sec. 2204                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part D - Activities of Institutions of the System
 
-HEAD-
    Sec. 2204. Repealed. Pub. L. 102-552, title V, Sec. 508, Oct. 28,
        1992, 106 Stat. 4132
 
-MISC1-
      Section, Pub. L. 92-181, title IV, Sec. 4.16, Dec. 10, 1971, 85
    Stat. 613, prohibited tax-exempt guarantees.
 
-CITE-
    12 USC Sec. 2205                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part D - Activities of Institutions of the System
 
-HEAD-
    Sec. 2205. Interest rates
 
-STATUTE-
      Interest rates on loans from institutions of the Farm Credit
    System shall not be subject to any interest rate limitation imposed
    by any State constitution or statute or other laws.  Such
    limitation is preempted for purposes of this chapter.  Interest
    rates on loans made by agricultural credit corporations organized
    in conjunction with cooperative associations for the purpose of
    financing the ordinary crop operations of the members of such
    associations or other producers and eligible to discount with the
    Federal intermediate credit banks and Farm Credit Banks shall be
    exempt from any interest rate limitation imposed by any State
    constitution or statute or other laws which are hereby preempted
    for purposes of this chapter.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.17, as added Pub. L. 96-592,
    title IV, Sec. 403, Dec. 24, 1980, 94 Stat. 3446; amended Pub. L.
    99-205, title II, Sec. 205(f)(6), Dec. 23, 1985, 99 Stat. 1706;
    Pub. L. 99-509, title I, Sec. 1035, Oct. 21, 1986, 100 Stat. 1878;
    Pub. L. 100-399, title IX, Sec. 901(h), Aug. 17, 1988, 102 Stat.
    1007.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-399 substituted ''and Farm Credit Banks'' for
    ''pursuant to section 2074 of this title''.
      1986 - Pub. L. 99-509 substituted first two sentences for former
    first sentence which read as follows: ''Interest rates on loans
    from institutions of the Farm Credit System shall be determined
    with the approval of, as provided in section 2252(a)(5) of this
    title, the Farm Credit Administration as provided in this chapter,
    notwithstanding any interest rate limitation imposed by any State
    constitution or statute or other laws which are hereby preempted
    for purposes of this chapter.''
      1985 - Pub. L. 99-205 inserted '', as provided in section
    2252(a)(5) of this title,'' after ''with the approval of'' in first
    sentence.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective immediately after
    amendment made by section 401 of Pub. L. 100-233, which was
    effective 6 months after Jan. 6, 1988, see section 1001(b) of Pub.
    L. 100-399, set out as a note under section 2002 of this title.
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2075, 2096 of this title.
 
-CITE-
    12 USC Sec. 2206                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part D - Activities of Institutions of the System
 
-HEAD-
    Sec. 2206. Participation loans
 
-STATUTE-
      Notwithstanding any other provisions of this chapter, the terms
    of any loan participated in by two or more Farm Credit System
    institutions operating under different subchapters of this chapter,
    including provisions for capitalization of the portion of the loan
    participated in by each institution, shall be as may be agreed upon
    among such institutions and authorized under regulations issued by
    the Farm Credit Administration, except that for purposes of
    determining borrower eligibility, membership, term, amount, loan
    security, and purchase of stock or participation certificates by
    the borrower, the provisions of law applicable to the loan shall be
    the provisions in the subchapter under which the institution that
    originates the loan operates.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.18, as added Pub. L. 96-592,
    title IV, Sec. 403, Dec. 24, 1980, 94 Stat. 3446; amended Pub. L.
    99-205, title II, Sec. 205(f)(7), Dec. 23, 1985, 99 Stat. 1706.)
 
-MISC1-
                                 AMENDMENTS
      1985 - Pub. L. 98-205 inserted ''under regulations issued'' after
    ''authorized''.
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2013, 2015, 2073, 2122 of
    this title.
 
-CITE-
    12 USC Sec. 2206a                                            01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part D - Activities of Institutions of the System
 
-HEAD-
    Sec. 2206a. Authority of Farm Credit Banks and direct lender
        associations to participate in loans to similar entities for
        risk management purposes
 
-STATUTE-
    (a) Definitions
      As used in this section:
      (1) Participate and participation
        The terms ''participate'' and ''participation'' shall have the
      meaning provided in section 2121(11)(B)(iv) of this title.
      (2) Similar entity
        The term ''similar entity'' means a person that -
          (A) is not eligible for a loan from the Farm Credit Bank or
        association; and
          (B) has operations that are functionally similar to a person
        that is eligible for a loan from the Farm Credit Bank or
        association in that the person derives a majority of the income
        of the person from, or has a majority of the assets of the
        person invested in, the conduct of activities that are
        functionally similar to the activities that are conducted by an
        eligible person.
    (b) Loan participation authority
      Notwithstanding any other provision of this chapter, any Farm
    Credit Bank or direct lender association chartered under this
    chapter may participate in any loan of a type otherwise authorized
    under subchapter I or II of this chapter made to a similar entity
    by any person in the business of extending credit, except that a
    Farm Credit Bank or direct lender association may not participate
    in a loan under this section if -
        (1) the participation would cause the total amount of all
      participations by the Farm Credit Bank or association under this
      section involving a single credit risk to exceed 10 percent (or
      the applicable higher lending limit authorized under regulations
      issued by the Farm Credit Administration if the stockholders of
      the respective Farm Credit Bank or association so approve) of the
      total capital of the Farm Credit Bank or association;
        (2) the participation by the Farm Credit Bank or association
      would equal or exceed 50 percent of the principal of the loan or,
      when taken together with participations in the loan by other Farm
      Credit System institutions, would cause the cumulative amount of
      the participations by all Farm Credit System institutions in the
      loan to equal or exceed 50 percent of the principal of the loan;
        (3) the participation would cause the cumulative amount of
      participations that the Farm Credit Bank or association has
      outstanding under this section to exceed 15 percent of the total
      assets of the Farm Credit Bank or association; or
        (4) the loan is of the type authorized under section 2019(b) or
      2075(a)(2) of this title.
    (c) Prior approval required
      (1) In general
        With respect to a similar entity that is eligible to borrow
      from a bank for cooperatives under subchapter III of this
      chapter, the authority of a Farm Credit Bank or association to
      participate in a loan to the entity under this section shall be
      subject to the prior approval of the bank for cooperatives
      having, at the time the loan is made, the greatest loan volume in
      the State in which the headquarters office of the similar entity
      is located.
      (2) Terms and conditions
        Approval under paragraph (1) may be granted on an annual basis
      and under such terms and conditions as may be agreed on between
      the Farm Credit Bank or association, as the case may be, and the
      bank for cooperatives granting the approval.
      (3) Approval by supervising Farm Credit Bank
        An association may not participate in a loan to a similar
      entity under this section without the approval of the supervising
      Farm Credit Bank of the association.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.18A, as added Pub. L. 103-376,
    Sec. 5, Oct. 19, 1994, 108 Stat. 3498.)
 
-CITE-
    12 USC Sec. 2207                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part D - Activities of Institutions of the System
 
-HEAD-
    Sec. 2207. Young, beginning, and small farmers and ranchers
 
-STATUTE-
      (a) Under policies of the district Farm Credit Bank board, each
    Federal land bank association and production credit association
    shall prepare a program for furnishing sound and constructive
    credit and related services to young, beginning, and small farmers
    and ranchers.  Such programs shall assure that such credit and
    services are available in coordination with other units of the Farm
    Credit System serving the territory and with other governmental and
    private sources of credit.  Each program shall be subject to review
    and approval by the supervising bank.
      (b) The Farm Credit Bank for each district shall annually obtain
    from associations under its supervision reports of activities under
    programs developed pursuant to subsection (a) of this section and
    progress toward program objectives.  On the basis of such reports,
    the bank shall provide to the Farm Credit Administration an annual
    report summarizing the operations and achievements in its district
    under such programs.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.19, as added Pub. L. 96-592,
    title IV, Sec. 403, Dec. 24, 1980, 94 Stat. 3446; amended Pub. L.
    100-399, title IX, Sec. 901(i), (j), Aug. 17, 1988, 102 Stat.
    1007.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Subsec. (a). Pub. L. 100-399, Sec. 901(i), inserted ''Farm
    Credit Bank'' after ''district''.
      Subsec. (b). Pub. L. 100-399, Sec. 901(j)(1), (2), (4), (5),
    substituted ''The Farm Credit Bank for each district'' for ''The
    Federal land bank and the Federal intermediate credit bank for each
    district'', ''under its supervision'' for ''under their
    supervision'', ''the bank shall'' for ''the banks shall'', ''an
    annual report'' for ''a joint annual report'', and ''achievements
    in its district'' for ''achievements in their district''.
      Pub. L. 100-399, Sec. 901(j)(3), substituted ''subsection (a)''
    for ''subsection (a) of this section'', which for purposes of
    codification was translated as ''subsection (a) of this section'',
    requiring no change in text.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective immediately after
    amendment made by section 401 of Pub. L. 100-233, which was
    effective 6 months after Jan. 6, 1988, see section 1001(b) of Pub.
    L. 100-399, set out as a note under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2252 of this title.
 
-CITE-
    12 USC Sec. 2208                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part D - Activities of Institutions of the System
 
-HEAD-
    Sec. 2208. Prohibition against use of signed ballots
 
-STATUTE-
      In any election or merger vote, or other proceeding subject to a
    vote of the stockholders (or subscribers to the guaranty fund of a
    bank for cooperatives), conducted by a lending institution of the
    Farm Credit System, the institution -
        (1) may not use signed ballots; and
        (2) shall implement measures to safeguard the voting process
      for the protection of the right of stockholders (or subscribers)
      to a secret ballot.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.20, as added Pub. L. 96-592,
    title IV, Sec. 403, Dec. 24, 1980, 94 Stat. 3447; amended Pub. L.
    100-233, title IV, Sec. 425, Jan. 6, 1988, 101 Stat. 1657.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-233 amended section generally.  Prior to
    amendment, section read as follows: ''The provisions of (1) section
    2074 of this title authorizing the Federal intermediate credit
    banks to lend to or discount paper for other financial
    institutions, and (2) section 2128(b) of this title authorizing the
    financing of certain domestic or foreign entities in connection
    with the import or export activities of cooperatives which are
    borrowers from the banks for cooperatives, shall expire on
    September 30, 1990, unless extended by Act of Congress prior to
    that date.  Any contract or agreement entered into under the
    authority of either provision prior to its expiration shall remain
    in full force and effect notwithstanding such expiration.''
 
-CITE-
    12 USC Sec. 2209                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part D - Activities of Institutions of the System
 
-HEAD-
    Sec. 2209. Compensation of bank directors
 
-STATUTE-
    (a) In general
      The Farm Credit Administration shall monitor the compensation of
    members of the board of directors of a System bank received as
    compensation for serving as a director of the bank to ensure that
    the amount of the compensation does not exceed a level of $20,000
    per year, as adjusted to reflect changes in the Consumer Price
    Index for all urban consumers published by the Bureau of Labor
    Statistics, unless the Farm Credit Administration determines that
    such level adversely affects the safety and soundness of the bank.
    (b) Waiver
      The Farm Credit Administration may waive the limitation
    prescribed in subsection (a) of this section under exceptional
    circumstances, as determined in accordance with regulations
    promulgated by the Farm Credit Administration.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.21, as added Pub. L. 100-399,
    title IV, Sec. 414, Aug. 17, 1988, 102 Stat. 1004; amended Pub. L.
    102-552, title V, Sec. 509, Oct. 28, 1992, 106 Stat. 4132.)
 
-MISC1-
                                 AMENDMENTS
      1992 - Pub. L. 102-552 amended section generally.  Prior to
    amendment, section read as follows: ''No member of the board of
    directors of a System bank may receive more than $15,000 per year
    under this chapter as compensation for serving as a director of
    such bank.''
                               EFFECTIVE DATE
      Section effective immediately after amendment made by section 401
    of Pub. L. 100-233, which was effective 6 months after Jan. 6,
    1988, see section 1001(b) of Pub. L. 100-399, set out as an
    Effective Date of 1988 Amendment note under section 2002 of this
    title.
 
-CITE-
    12 USC Part E - Service Organizations                        01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part E - Service Organizations
    .
 
-HEAD-
    Part E - Service Organizations
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-233, title VIII, Sec. 805(t)(2), Jan. 6, 1988,
    101 Stat. 1716, redesignated part D as E.
 
-SECREF-
                     PART REFERRED TO IN OTHER SECTIONS
      This part is referred to in section 2271 of this title.
 
-CITE-
    12 USC Sec. 2211                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part E - Service Organizations
 
-HEAD-
    Sec. 2211. Establishment
 
-STATUTE-
      Any bank of the Farm Credit System, or two or more of such banks
    acting together, may organize a corporation or corporations for the
    purpose of performing functions and services for or on behalf of
    the organizing bank or banks that the bank or banks may perform
    pursuant to this chapter: Provided, That a corporation so organized
    shall have no authority either to extend credit or provide
    insurance services for borrowers from Farm Credit System
    institutions, nor shall it have any greater authority with respect
    to functions and services than the organizing bank or banks possess
    under this chapter.  The organizing bank or banks shall apply for a
    Federal charter for the corporation by forwarding to the Farm
    Credit Administration a statement of the need for the corporation
    and proposed articles specifying in general terms the objectives
    for which the corporation is formed, the powers to be exercised by
    it in carrying out the functions and services, and the territory it
    is to serve.  The Farm Credit Administration for good cause may
    deny the charter applied for.  Upon the approval of articles by the
    Farm Credit Administration and the issuance of a charter, the
    corporation shall become as of such date a federally chartered body
    corporate and an instrumentality of the United States.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.25, as added Pub. L. 96-592,
    title IV, Sec. 404, Dec. 24, 1980, 94 Stat. 3447; amended Pub. L.
    99-205, title II, Sec. 205(f)(8), Dec. 23, 1985, 99 Stat. 1706.)
 
-MISC1-
                                 AMENDMENTS
      1985 - Pub. L. 99-205 struck out ''the Governor of'' before ''the
    Farm Credit Administration'' in second sentence and substituted
    ''Farm Credit Administration'' for ''Governor'' in third and fourth
    sentences.
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2159, 2160 of this title.
 
-CITE-
    12 USC Sec. 2212                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part E - Service Organizations
 
-HEAD-
    Sec. 2212. Powers of Farm Credit Administration
 
-STATUTE-
      The Farm Credit Administration shall have power, under rules and
    regulations prescribed by the Farm Credit Administration, to
    provide for the organization of any corporation chartered under
    this part and the territory within which its operations may be
    carried on, and to approve amendments consistent with this chapter
    to charters or articles of service corporations.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.26, as added Pub. L. 96-592,
    title IV, Sec. 404, Dec. 24, 1980, 94 Stat. 3447; amended Pub. L.
    99-205, title II, Sec. 205(f)(9), Dec. 23, 1985, 99 Stat. 1706;
    Pub. L. 100-233, title VIII, Sec. 802(s), Jan. 6, 1988, 101 Stat.
    1712.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-233 struck out ''or by prescribing in the
    terms of the charter or by approval of the bylaws of the
    corporation'' after second reference to Farm Credit Administration,
    substituted ''approve amendments consistent with this chapter to
    charters or articles of service corporations'' for ''direct at any
    time such changes in its charter as the Farm Credit Administration
    finds necessary for the accomplishment of the purposes of this
    chapter'', and struck out last sentence which read as follows:
    ''The powers of the Farm Credit Administration to provide for the
    organization of any corporation chartered under this part include,
    but are not limited to approval of -
        ''(1) corporate title;
        ''(2) general corporate powers;
        ''(3) eligibility for membership on, and the powers,
      composition, selection, terms, and compensation of the board of
      directors;
        ''(4) classes, issuance, value, and retirement of stock;
        ''(5) sources of operating funds;
        ''(6) dissolution, liquidation, and distribution of assets on
      liquidation; and
        ''(7) application and distribution of earnings.''
      1985 - Pub. L. 99-205 substituted ''Farm Credit Administration''
    for ''Governor'' in heading and wherever appearing in text, and
    substituted ''the Federal Credit Administration'' for ''he'' before
    ''finds necessary'' in first sentence.
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in title 18 section 212.
 
-CITE-
    12 USC Sec. 2213                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part E - Service Organizations
 
-HEAD-
    Sec. 2213. Regulation and examination
 
-STATUTE-
      The corporations organized under this part shall be institutions
    of the Farm Credit System and shall be subject to the same
    regulation and examination by the Farm Credit Administration as are
    the organizing bank or banks under this chapter.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.27, as added Pub. L. 96-592,
    title IV, Sec. 404, Dec. 24, 1980, 94 Stat. 3447; amended Pub. L.
    99-205, title II, Sec. 205(f)(10), Dec. 23, 1985, 99 Stat. 1706;
    Pub. L. 100-233, title VIII, Sec. 802(t), Jan. 6, 1988, 101 Stat.
    1712.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-233 substituted ''Regulation'' for
    ''Supervision'' in section catchline.
      1985 - Pub. L. 99-205 substituted ''regulation'' for
    ''supervision''.
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
 
-CITE-
    12 USC Sec. 2214                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part E - Service Organizations
 
-HEAD-
    Sec. 2214. State laws
 
-STATUTE-
      State and other laws shall apply to corporations organized
    pursuant to this part to the same extent such laws would apply to
    the organizing banks engaged in the same activity in the same
    jurisdiction: Provided, however, That to the extent that sections
    2023, 2098, and 2134 of this title may exempt banks or associations
    of the Farm Credit System from taxation, such exemptions, other
    than with respect to franchise taxes, shall not extend to
    corporations organized pursuant to this part.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.28, as added Pub. L. 96-592,
    title IV, Sec. 404, Dec. 24, 1980, 94 Stat. 3448; amended Pub. L.
    100-399, title IX, Sec. 901(k), Aug. 17, 1988, 102 Stat. 1007; Pub.
    L. 102-237, title V, Sec. 502(g), Dec. 13, 1991, 105 Stat. 1869.)
 
-MISC1-
                                 AMENDMENTS
      1991 - Pub. L. 102-237 made technical amendment to reference to
    section 2098 of this title to reflect change in reference to
    corresponding section of original act.
      1988 - Pub. L. 100-399 inserted ''or associations'' and
    substituted ''2023, 2098,'' for ''2055, 2079,''.
                      EFFECTIVE DATE OF 1991 AMENDMENT
      Amendment by Pub. L. 102-237 effective as if included in the
    provision of the Food, Agriculture, Conservation, and Trade Act of
    1990, Pub. L. 101-624, to which the amendment relates, see section
    1101(b)(4) of Pub. L. 102-237, set out as a note under section 1421
    of Title 7, Agriculture.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective immediately after
    amendment made by section 401 of Pub. L. 100-233, which was
    effective 6 months after Jan. 6, 1988, see section 1001(b) of Pub.
    L. 100-399, set out as a note under section 2002 of this title.
 
-CITE-
    12 USC Sec. 2214a                                            01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part E - Service Organizations
 
-HEAD-
    Sec. 2214a. ''Bank'' defined
 
-STATUTE-
      In this part, the term ''bank'' includes each association
    operating under subchapter II of this chapter.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.28A, as added Pub. L. 104-105,
    title II, Sec. 209, Feb. 10, 1996, 110 Stat. 174.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 4.28A of title IV of Pub. L. 92-181, which
    provided for chartering of Farm Credit System Capital Corporation
    by Farm Credit Administration and revoked charter of Farm Credit
    System Capital Corporation which had been issued under part D of
    this subchapter, was classified to section 2216 of this title,
    prior to repeal by Pub. L. 100-233, title II, Sec. 207(a)(3), Jan.
    6, 1988, 101 Stat. 1607.
 
-CITE-
    12 USC Part D1 - Farm Credit System Capital Corporation      01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part D1 - Farm Credit System Capital Corporation
    .
 
-HEAD-
    Part D1 - Farm Credit System Capital Corporation
 
-CITE-
    12 USC Sec. 2216 to 2216k                                    01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part D1 - Farm Credit System Capital Corporation
 
-HEAD-
    Sec. 2216 to 2216k. Repealed. Pub. L. 100-233, title II, Sec.
        207(a)(3), Jan. 6, 1988, 101 Stat. 1607
 
-MISC1-
      Section 2216, Pub. L. 92-181, title IV, Sec. 4.28A, as added Pub.
    L. 99-205, title I, Sec. 103, Dec. 23, 1985, 99 Stat. 1680,
    provided for chartering of Farm Credit System Capital Corporation
    by Farm Credit Administration and revoked charter of Farm Credit
    System Capital Corporation which had been issued under part D of
    this subchapter.  See sections 2278a et seq. and 2278b et seq. of
    this title.
      Section 2216a, Pub. L. 92-181, title IV, Sec. 4.28B, as added
    Pub. L. 99-205, title I, Sec. 103, Dec. 23, 1985, 99 Stat. 1680,
    set out purposes of Capital Corporation. See sections 2278a-1 and
    2278b-1 of this title.
      Section 2216b, Pub. L. 92-181, title IV, Sec. 4.28C, as added
    Pub. L. 99-205, title I, Sec. 103, Dec. 23, 1985, 99 Stat. 1680,
    provided for Board of Directors of Capital Corporation. See
    sections 2278a-2 and 2278b-2 of this title.
      Section 2216c, Pub. L. 92-181, title IV, Sec. 4.28D, as added
    Pub. L. 99-205, title I, Sec. 103, Dec. 23, 1985, 99 Stat. 1682,
    provided for compensation of members of Board of Directors of
    Capital Corporation. See sections 2278a-2 and 2278b-2 of this
    title.
      Section 2216d, Pub. L. 92-181, title IV, Sec. 4.28E, as added
    Pub. L. 99-205, title I, Sec. 103, Dec. 23, 1985, 99 Stat. 1682,
    authorized Board of Directors of Capital Corporation to adopt
    rules.  See sections 2278a-2 and 2278b-2 of this title.
      Section 2216e, Pub. L. 92-181, title IV, Sec. 4.28F, as added
    Pub. L. 99-205, title I, Sec. 103, Dec. 23, 1985, 99 Stat. 1682,
    provided for selection of chief executive officer of Capital
    Corporation. See sections 2278a-2 and 2278b-2 of this title.
      Section 2216f, Pub. L. 92-181, title IV, Sec. 4.28G, as added
    Pub. L. 99-205, title I, Sec. 103, Dec. 23, 1985, 99 Stat. 1682,
    enumerated corporate powers of Capital Corporation. See sections
    2278a-3 and 2278b-4 of this title.
      Section 2216g, Pub. L. 92-181, title IV, Sec. 4.28H, as added
    Pub. L. 99-205, title I, Sec. 103, Dec. 23, 1985, 99 Stat. 1685,
    provided for succession of Capital Corporation. See section 2278a-9
    of this title.
      Section 2216h, Pub. L. 92-181, title IV, Sec. 4.28I, as added
    Pub. L. 99-205, title I, Sec. 103, Dec. 23, 1985, 99 Stat. 1685,
    set out provisions limiting powers of Capital Corporation. See
    section 2278a-8 of this title.
      Section 2216i, Pub. L. 92-181, title IV, Sec. 4.28J, as added
    Pub. L. 99-205, title I, Sec. 103, Dec. 23, 1985, 99 Stat. 1686,
    set out authority of Secretary of the Treasury. See section 2278b-6
    of this title.
      Section 2216j, Pub. L. 92-181, title IV, Sec. 4.28K, as added
    Pub. L. 99-205, title I, Sec. 103, Dec. 23, 1985, 99 Stat. 1687,
    provided for initial capitalization of Capital Corporation.
      Section 2216k, Pub. L. 92-181, title IV, Sec. 4.28L, as added
    Pub. L. 99-205, title I, Sec. 103, Dec. 23, 1985, 99 Stat. 1687,
    provided for tax status of consolidated obligations.  See sections
    2278a-11 and 2278b-10 of this title.
                          EFFECTIVE DATE OF REPEAL
      Repeal effective 15 days after Jan. 6, 1988, see section 207(b)
    of Pub. L. 100-233, set out as a note under section 2152 of this
    title.
 
-CITE-
    12 USC Part F - Sale of Insurance                            01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part F - Sale of Insurance
    .
 
-HEAD-
    Part F - Sale of Insurance
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-399, title VII, Sec. 702(c), Aug. 17, 1988,
    102 Stat. 1006, redesignated part G as F.
      Pub. L. 100-233, title VIII, Sec. 805(u), Jan. 6, 1988, 101 Stat.
    1716, redesignated part E as G.
 
-CITE-
    12 USC Sec. 2218                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part F - Sale of Insurance
 
-HEAD-
    Sec. 2218. Lines of insurance
 
-STATUTE-
    (a) Regulatory authorization
      (1) The regulations of the Farm Credit Administration governing
    financially related services that the banks and associations of the
    Farm Credit System may provide under subchapters I and II of this
    chapter may authorize the sale to any member of or borrower from
    any such bank or association, on an optional basis, of credit or
    term life and credit disability insurance appropriate to protect
    the loan commitment in the event of death or disability of the
    debtors and other insurance necessary to protect the member's farm
    or aquatic unit, but limited to, hail and multiple-peril crop
    insurance, title insurance, and insurance to protect the facilities
    and equipment of aquatic borrowers.  A member or borrower shall
    have the option, without coercion from the bank or association of
    such member or borrower, to accept or reject such insurance.
      (2) In making insurance available through private insurers, the
    banks shall approve the programs of more than two insurers for each
    type of insurance offered in the district, if more than two
    insurers for each type of insurance have proposed programs to a
    bank that will, in all likelihood, have long-term viability and
    meet the requirements of subsection (b)(2)(D) of this section.  The
    banks may provide comparative information relating to costs and
    quality of approved programs and the financial conditions of
    approved companies.  Associations shall offer at least two insurers
    for each program from among those approved by the Farm Credit
    Banks, if at least two insurers have been approved in accordance
    with this paragraph.
    (b) Contents of regulations
      Such regulations shall provide that -
        (1) in any case in which insurance is required as a condition
      for a loan or other financial assistance from a bank or
      association, notice be given that it is not necessary to purchase
      the insurance from the bank or association and that the borrower
      has the option of obtaining the insurance elsewhere;
        (2) such insurance services may be offered only if -
          (A) the bank or association has the capacity to render
        insurance service under this chapter in an effective and
        efficient manner;
          (B) there exists the probability that any insurance program
        under this chapter will generate sufficient revenue to cover
        all costs;
          (C) rendering insurance service will not have an adverse
        effect on the bank's or association's credit or other
        operations;
          (D) the insurance program has been approved by the bank or
        association from among specific programs made available to it
        by insurers -
            (i) meeting reasonable financial and quality of service
          standards; and
            (ii) licensed under State law to do business in the State;
          and
          (E) in making insurance available through approved insurers,
        the board of directors of the association or bank selects and
        offers at least two approved insurers for each type of
        insurance made available to the members and borrowers, if at
        least two insurers have been approved in accordance with
        subsection (a)(2) of this section; and
        (3) no bank or association shall directly or indirectly
      discriminate in any manner against any agent, broker, or insurer
      that is not affiliated with such bank or association, or against
      any party who purchases insurance through any such nonaffiliated
      insurance agent, broker, or insurer.
    (c) Continuation of existing coverage
      Notwithstanding any provision of this section to the contrary,
    any bank or association that on December 24, 1980, is offering
    insurance coverages not authorized by this section may continue to
    sell such coverages for a period of not more than one year from
    such date and may continue to service such coverages until their
    expiration.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.29, as added Pub. L. 96-592,
    title IV, Sec. 404, Dec. 24, 1980, 94 Stat. 3448; amended Pub. L.
    100-233, title IV, Sec. 422(a), Jan. 6, 1988, 101 Stat. 1655; Pub.
    L. 100-399, title IV, Sec. 411, Aug. 17, 1988, 102 Stat. 1003; Pub.
    L. 101-624, title XVIII, Sec. 1834, Nov. 28, 1990, 104 Stat. 3833.)
 
-MISC1-
                                 AMENDMENTS
      1990 - Subsec. (a)(2). Pub. L. 101-624, Sec. 1834(1), inserted
    '', if more than two insurers for each type of insurance have
    proposed programs to a bank that will, in all likelihood, have
    long-term viability and meet the requirements of subsection
    (b)(2)(D) of this section'' before period at end of first sentence,
    and '', if at least two insurers have been approved in accordance
    with this paragraph'' before period at end of third sentence.
      Subsec. (b)(2)(E). Pub. L. 101-624, Sec. 1834(2), inserted before
    semicolon at end '', if at least two insurers have been approved in
    accordance with subsection (a)(2) of this section''.
      1988 - Subsec. (a). Pub. L. 100-233, Sec. 422(a)(1), designated
    existing provisions as par. (1), struck out ''of this Act'' to
    conform to style of original enactment, resulting in no change in
    text, inserted ''or borrower from'' before ''any such bank'',
    inserted provision at end giving a member or borrower the option,
    without coercion from the bank or association of such member or
    borrower, to accept or reject such insurance, and added par. (2).
      Subsec. (a)(1). Pub. L. 100-399, Sec. 411(a), substituted
    ''subchapters I and II of this chapter'' for ''sections 2019, 2033,
    2076, and 2097 of this title''.
      Subsec. (a)(2). Pub. L. 100-399, Sec. 411(b), substituted ''Farm
    Credit Banks'' for ''Federal intermediate credit banks''.
      Subsec. (b)(2). Pub. L. 100-233, Sec. 422(a)(2), redesignated
    cls. (i) to (iii) as subpars. (A) to (C), respectively, and added
    subpars. (D) and (E).
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective immediately after
    amendment made by section 401 of Pub. L. 100-233, which was
    effective 6 months after Jan. 6, 1988, see section 1001(b) of Pub.
    L. 100-399, set out as a note under section 2002 of this title.
                          CONTINUATION OF PROGRAM
      Section 422(b) of Pub. L. 100-233 provided that:
    ''Notwithstanding the amendments made to section 4.29 (12 U.S.C.
    2218) by subsection (a), any insurance program offered by any bank
    or association of the Farm Credit System on the date of the
    enactment of this Act (Jan. 6, 1988) that does not meet the
    requirements of section 4.29, as so amended, may be continued until
    July 1, 1988.''
 
-CITE-
    12 USC Part G - Miscellaneous                                01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part G - Miscellaneous
    .
 
-HEAD-
    Part G - Miscellaneous
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-399, title VII, Sec. 702(c), Aug. 17, 1988,
    102 Stat. 1006, redesignated part H as G.
      Pub. L. 100-233, title VIII, Sec. 805(u), Jan. 6, 1988, 101 Stat.
    1716, redesignated part F as H.
 
-CITE-
    12 USC Sec. 2219                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part G - Miscellaneous
 
-HEAD-
    Sec. 2219. Limitation on separate sale
 
-STATUTE-
      If real property is acquired by any institution of the Farm
    Credit System through foreclosure, no institution of the Farm
    Credit System shall sell the surface rights to that real property
    to any person unless the institution also sells all mineral rights
    to that real property to that person.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.35, as added Pub. L. 99-205,
    title III, Sec. 306, Dec. 23, 1985, 99 Stat. 1709.)
 
-MISC1-
                               EFFECTIVE DATE
      Section effective thirty days after Dec. 23, 1985, see section
    401 of Pub. L. 99-205, set out as an Effective Date of 1985
    Amendment note under section 2001 of this title.
 
-CITE-
    12 USC Sec. 2219a                                            01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part G - Miscellaneous
 
-HEAD-
    Sec. 2219a. Right of first refusal
 
-STATUTE-
    (a) General rule
      Agricultural real estate that is acquired by an institution of
    the System as a result of a loan foreclosure or a voluntary
    conveyance by a borrower (hereinafter in this section referred to
    as the ''previous owner'') who, as determined by the institution,
    does not have the financial resources to avoid foreclosure
    (hereinafter in this section referred to as ''acquired real
    estate'') shall be subject to the right of first refusal of the
    previous owner to repurchase or lease the property, as provided in
    this section.
    (b) Application of right of first refusal to sale of property
      (1) Election to sell and notification
        Within 15 days after an institution of the System first elects
      to sell acquired real estate, or any portion of such real estate,
      the institution shall notify the previous owner by certified mail
      of the owner's right -
          (A) to purchase the property at the appraised fair market
        value of the property, as established by an accredited
        appraiser; or
          (B) to offer to purchase the property at a price less than
        the appraised value.
      (2) Eligibility to purchase
        To be eligible to purchase the property under paragraph (1),
      the previous owner must, within 30 days after receiving the
      notice required by such paragraph, submit an offer to purchase
      the property.
      (3) Mandatory sale
        An institution of the System receiving an offer from the
      previous owner to purchase the property at the appraised value
      shall, within 15 days after the receipt of such offer, accept
      such offer and sell the property to the previous owner.
      (4) Permissive sale
        An institution of the System receiving an offer from the
      previous owner to purchase the property at a price less than the
      appraised value may accept such offer and sell the property to
      the previous owner.  Notice shall be provided to the previous
      owner of the acceptance or rejection of such offer within 15 days
      after the receipt of such offer.
      (5) Rejection of offer of previous owner
        (A) Duties of institution
          An institution of the System that rejects an offer from the
        previous owner to purchase the property at a price less than
        the appraised value may not sell the property to any other
        person -
            (i) at a price equal to, or less than, that offered by the
          previous owner; or
            (ii) on different terms and conditions than those that were
          extended to the previous owner,
        without first affording the previous owner an opportunity to
        purchase the property at such price or under such terms and
        conditions.
        (B) Notice
          Notice of the opportunity in subparagraph (A) shall be
        provided to the previous owner by certified mail, and the
        previous owner shall have 15 days in which to submit an offer
        to purchase the property at such price or under such terms and
        conditions.
    (c) Application of right of first refusal to leasing of property
      (1) Election to lease and notification
        Within 15 days after an institution of the System first elects
      to lease acquired real estate, or any portion of such real
      estate, the institution shall notify the previous owner by
      certified mail of the owner's right -
          (A) to lease the property at a rate equivalent to the
        appraised rental value of the property, as established by an
        accredited appraiser; or
          (B) to offer to lease the property at a rate that is less
        than the appraised rental value of the property.
      (2) Eligibility to lease
        To be eligible to lease the property under paragraph (1), the
      previous owner must, within 15 days after receiving the notice
      required by such paragraph, submit an offer to lease the
      property.
      (3) Mandatory lease
        An institution of the System receiving an offer from the
      previous owner to lease the property at a rate equivalent to the
      appraised rental value of the property shall, within 15 days
      after the receipt of such offer, accept such offer and lease the
      property to the previous owner unless the institution determines
      that the previous owner -
          (A) does not have the resources available to conduct a
        successful farming or ranching operation; or
          (B) cannot meet all of the payments, terms, and conditions of
        such lease.
      (4) Permissive lease
        An institution of the System receiving an offer from the
      previous owner to lease the property at a rate that is less than
      the appraised rental value of the property may accept such offer
      and lease the property to the previous owner.
      (5) Notice to previous owner
        An institution of the System receiving an offer from the
      previous owner to lease the property at a rate less than the
      appraised rental value of the property shall notify the previous
      owner of its acceptance or rejection of the offer within 15 days
      after the receipt of such offer.
      (6) Rejection of offer of previous owner
        (A) Duties of institution
          An institution of the System rejecting an offer from the
        previous owner to lease the property at a rate less than the
        appraised rental value of the property may not lease the
        property to any other person -
            (i) at a rate equal to or less than that offered by the
          previous owner; or
            (ii) on different terms and conditions than those that were
          extended to the previous owner,
        without first affording the previous owner an opportunity to
        lease the property at such rate or under such terms and
        conditions.
        (B) Notice
          Notice of the opportunity described in subparagraph (A) shall
        be given to the previous owner by certified mail, and the
        previous owner shall have 15 days after the receipt of such
        notice in which to agree to lease the property at such rate or
        under such terms and conditions.
    (d) Public offerings
      (1) Notification of previous owner
        If an institution of the System elects to sell or lease
      acquired property or a portion thereof through a public auction,
      competitive bidding process, or other similar public offering,
      the institution shall notify the previous owner, by certified
      mail, of the availability of the property.  Such notice shall
      contain the minimum amount, if any, required to qualify a bid as
      acceptable to the institution and any terms and conditions to
      which such sale or lease will be subject.
      (2) Priority
        If two or more qualified bids in the same amount are received
      by the institution under paragraph (1), such bids are the highest
      received, and one of the qualified bids is offered by the
      previous owner, the institution shall accept the offer by the
      previous owner.
      (3) Nondiscrimination
        No institution of the System may discriminate against a
      previous owner in any public auction, competitive bidding
      process, or other similar public offering of property acquired by
      the institution from such person.
    (e) Term or condition
      For the purposes of this section, financing by a System
    institution shall not be considered to be a term or condition of a
    sale of acquired real estate.
    (f) Financing
      Notwithstanding any other provision of this section, a System
    institution shall not be required to provide financing to the
    previous owner in connection with the sale of acquired real estate.
    (g) Mailing of notice
      Notwithstanding any other provision of this section, each
    certified mail notice requirement in this section shall be fully
    satisfied by mailing one certified mail notice to the last known
    address of the previous owner.
    (h) State laws
      The rights provided in this section shall not diminish any such
    right of first refusal under the law of the State in which the
    property is located.
    (i) Applicability
      This section shall not apply to a bank for cooperatives.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.36, as added Pub. L. 99-205,
    title III, Sec. 306, Dec. 23, 1985, 99 Stat. 1709; amended Pub. L.
    100-233, title I, Sec. 108, Jan. 6, 1988, 101 Stat. 1582; Pub. L.
    100-399, title I, Sec. 104, Aug. 17, 1988, 102 Stat. 990.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-233 amended section generally.  Prior to
    amendment, section read as follows: ''No institution of the Farm
    Credit System shall sell any real property that previously served
    as security for a loan in a tract larger than a normal family size
    farm in the vicinity of the property for less than the amount it
    can receive from the Capital Corporation.''
      Subsec. (b)(2). Pub. L. 100-399, Sec. 104(a), substituted ''30''
    for ''15''.
      Subsec. (b)(3). Pub. L. 100-399, Sec. 104(b), substituted ''15''
    for ''30''.
      Subsec. (g). Pub. L. 100-399, Sec. 104(c), substituted ''previous
    owner'' for ''former borrower''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
                               EFFECTIVE DATE
      Section effective thirty days after Dec. 23, 1985, see section
    401 of Pub. L. 99-205, set out as an Effective Date of 1985
    Amendment note under section 2001 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2202a, 2279aa-9 of this
    title.
 
-CITE-
    12 USC Sec. 2219b                                            01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part G - Miscellaneous
 
-HEAD-
    Sec. 2219b. Application of uninsured accounts
 
-STATUTE-
    (a) In general
      Money of a borrower held by a Farm Credit System institution in
    an uninsured voluntary or involuntary account as authorized under
    regulations issued by the Farm Credit Administration (as in effect
    immediately before January 6, 1988), including all such other
    accounts known as ''advanced payment accounts'' or ''future
    prepayment accounts'' shall, in the event the institution is placed
    in liquidation, be immediately applied as payment against the
    indebtedness of any outstanding loans of such borrower.
    (b) Regulations
      The Farm Credit Administration shall promulgate regulations -
        (1) that define the term ''uninsured voluntary or involuntary
      account''; and
        (2) to otherwise effectively carry out this section.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.37, as added Pub. L. 100-233,
    title I, Sec. 110, Jan. 6, 1988, 101 Stat. 1585.)
 
-COD-
                                CODIFICATION
      Another section 4.37 of Pub. L. 92-181 was renumbered section
    4.38 and is classified to section 2219c of this title.
 
-CITE-
    12 USC Sec. 2219c                                            01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part G - Miscellaneous
 
-HEAD-
    Sec. 2219c. Affirmative action
 
-STATUTE-
      The Assistance Board established under section 2278a of this
    title and all institutions of the Farm Credit System with more than
    20 employees shall establish and maintain an affirmative action
    program plan that applies the affirmative action standards
    otherwise applied to contractors of the Federal Government.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.38, formerly Sec. 4.37, as added
    Pub. L. 100-233, title IV, Sec. 427, Jan. 6, 1988, 101 Stat. 1657;
    renumbered Sec. 4.38, Pub. L. 100-399, title IV, Sec. 413, Aug. 17,
    1988, 102 Stat. 1004.)
 
-CITE-
    12 USC Sec. 2219d                                            01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part G - Miscellaneous
 
-HEAD-
    Sec. 2219d. Encouragement of conservation practices
 
-STATUTE-
      At the time a System institution or an agricultural mortgage loan
    originator (as defined in section 2279aa(7) of this title) approves
    a loan made to a borrower that, in the opinion of the institution
    or originator, would be ineligible for a loan made, insured, or
    guaranteed under the Consolidated Farm and Rural Development Act (7
    U.S.C. 1921 et seq.) by reason of subtitle B or C of title XII of
    the Food Security Act of 1985 (16 U.S.C. 3811 et seq.), the
    institution or originator, as the case may be, shall encourage the
    borrower to contact the Department of Agriculture Soil Conservation
    Service to obtain information about soil conservation methods and
    practices.
 
-SOURCE-
    (Pub. L. 92-181, title IV, Sec. 4.39, formerly Sec. 4.38, as added
    Pub. L. 100-233, title IV, Sec. 428, Jan. 6, 1988, 101 Stat. 1658;
    renumbered Sec. 4.39, Pub. L. 100-399, title IV, Sec. 413, Aug. 17,
    1988, 102 Stat. 1004.)
 
-REFTEXT-
                             REFERENCES IN TEXT
      The Consolidated Farm and Rural Development Act, referred to in
    text, is title III of Pub. L. 87-128, Aug. 8, 1961, 75 Stat. 307,
    as amended, which is classified principally to chapter 50 (Sec.
    1921 et seq.) of Title 7, Agriculture. For complete classification
    of this Act to the Code, see Short Title note set out under section
    1921 of Title 7 and Tables.
      The Food Security Act of 1985, referred to in text, is Pub. L.
    99-198, Dec. 23, 1985, 99 Stat. 1354, as amended.  Subtitles B and
    C of title XII of the Food Security Act are classified generally to
    subchapters II (Sec. 3811 et seq.) and III (Sec. 3821 et seq.),
    respectively, of chapter 58 of Title 16, Conservation. For complete
    classification of this Act to the Code, see Short Title of 1985
    Amendment note set out under section 1281 of Title 7 and Tables.
 
-CITE-
    12 USC Sec. 2219e                                            01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER IV - PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF
         INSTITUTIONS OF THE SYSTEM
    Part G - Miscellaneous
 
-HEAD-
    Sec. 2219e. Liability for making criminal referrals
 
-STATUTE-
    (a) In general
      Any institution of the Farm Credit System, or any director,
    officer, employee, or agent of a Farm Credit System institution,
    that discloses to a Government authority information proffered in
    good faith that may be relevant to a possible violation of any law
    or regulation shall not be liable to any person under any law of
    the United States or any State -
        (1) for the disclosure; or
        (2) for any failure to notify the person involved in the
      possible violation.
    (b) No prohibition on disclosure
      Any institution of the Farm Credit System, or any director,
    officer, employee, or agent of a Farm Credit System institution,
    may disclose information to a Government authority that may be
    relevant to a possible violation of any law or regulation.
 
-SOURCE-
    (Pub. L. 104-105, title II, Sec. 221, Feb. 10, 1996, 110 Stat.
    184.)
 
-COD-
                                CODIFICATION
      Section was enacted as part of the Farm Credit System Reform Act
    of 1996, and not as part of the Farm Credit Act of 1971 which
    comprises this chapter.
 
-CITE-
    12 USC SUBCHAPTER V - FARM CREDIT ADMINISTRATION
                  ORGANIZATION                                   01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    .
 
-HEAD-
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-399, title IX, Sec. 901(o), (p), Aug. 17,
    1988, 102 Stat. 1008, struck out ''DISTRICT AND'' before ''FARM''
    in subchapter heading and struck out part A heading ''District
    Organization''.
 
-CITE-
    12 USC Part A - District Organization                        01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part A - District Organization
    .
 
-HEAD-
    Part A - District Organization
 
-CITE-
    12 USC Sec. 2221                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part A - District Organization
 
-HEAD-
    Sec. 2221. Transferred
 
-COD-
                                CODIFICATION
      Section, Pub. L. 92-181, title V, Sec. 5.0, Dec. 10, 1971, 85
    Stat. 614; Pub. L. 96-592, title V, Sec. 501, Dec. 24, 1980, 94
    Stat. 3448; Pub. L. 99-205, title II, Sec. 205(g)(1), Dec. 23,
    1985, 99 Stat. 1706; Pub. L. 100-233, title VIII, Sec. 805(v), Jan.
    6, 1988, 101 Stat. 1716; Pub. L. 100-399, title IX, Sec. 901(q),
    (r), Aug. 17, 1988, 102 Stat. 1008, which related to creation of
    districts, was transferred to section 1.2(b) of Pub. L. 92-181 by
    section 901(r) of Pub. L. 100-399 and is classified to section
    2002(b) of this title.
 
-CITE-
    12 USC Sec. 2222 to 2227                                     01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part A - District Organization
 
-HEAD-
    Sec. 2222 to 2227. Repealed. Pub. L. 100-399, title IV, Sec.
        409(d), Aug. 17, 1988, 102 Stat. 1003
 
-MISC1-
      Sections 2222 to 2227 were directed to be repealed by Pub. L.
    100-233, title IV, Sec. 418(c), formerly Sec. 415(c), Jan. 6, 1988,
    101 Stat. 1653, renumbered Sec. 418(c), Pub. L. 100-399, title IV,
    Sec. 409(a), Aug. 17, 1988, 102 Stat. 1003, which was repealed by
    section 409(c) of Pub. L. 100-399, title IV, Aug. 17, 1988, 102
    Stat. 1003.
      Section 409(c) of Pub. L. 100-399 provided in part that section
    418(c) of Pub. L. 100-233 is repealed and that this chapter shall
    be applied and administered, and the amendments by sections 430 and
    802(u) of Pub. L. 100-233 (amending sections 2226 and 2223,
    respectively, of this title) shall take effect, as if such section
    418(c) had not been enacted.
      Section 2222, Pub. L. 92-181, title V, Sec. 5.1, Dec. 10, 1971,
    85 Stat. 614; Pub. L. 99-205, title II, Sec. 205(g)(2), Dec. 23,
    1985, 99 Stat. 1707, related to district boards of directors,
    membership, eligibility, and terms.
      Section 2223, Pub. L. 92-181, title V, Sec. 5.2, Dec. 10, 1971,
    85 Stat. 614; Pub. L. 96-592, title V, Sec. 502, Dec. 24, 1980, 94
    Stat. 3449; Pub. L. 99-205, title II, Sec. 205(g)(3), (4), title
    VI, Sec. 607, Dec. 23, 1985, 99 Stat. 1707, 1712; Pub. L. 100-233,
    title VIII, Sec. 802(u), Jan. 6, 1988, 101 Stat. 1712, related to
    nomination and election of district directors.
      Section 2224, Pub. L. 92-181, title V, Sec. 5.3, Dec. 10, 1971,
    85 Stat. 615, related to functions of district directors.
      Section 2225, Pub. L. 92-181, title V, Sec. 5.4, Dec. 10, 1971,
    85 Stat. 615, related to district board officers.
      Section 2226, Pub. L. 92-181, title V, Sec. 5.5, Dec. 10, 1971,
    85 Stat. 616; Pub. L. 100-233, title IV, Sec. 430, Jan. 6, 1988,
    101 Stat. 1658, related to compensation of district boards.
      Section 2227, Pub. L. 92-181, title V, Sec. 5.6, Dec. 10, 1971,
    85 Stat. 616; 1978 Reorg. Plan No. 2, Sec. 102, 43 F.R. 36037, 92
    Stat. 3784; Pub. L. 99-205, title II, Sec. 205(g)(5), Dec. 23,
    1985, 99 Stat. 1707, related to powers of district farm credit
    board.
                          EFFECTIVE DATE OF REPEAL
      Repeal effective immediately after amendments made by section 401
    of Pub. L. 100-233, which were effective 6 months after Jan. 6,
    1988, see section 1001(b) of Pub. L. 100-399, set out as an
    Effective Date of 1988 Amendment note under section 2002 of this
    title.
 
-CITE-
    12 USC Part B - Farm Credit Administration Organization      01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part B - Farm Credit Administration Organization
    .
 
-HEAD-
    Part B - Farm Credit Administration Organization
 
-EXEC-
    EX. ORD. NO. 6084. REORGANIZING AGRICULTURAL CREDIT AGENCIES OF THE
                               UNITED STATES
      Ex. Ord. No. 6084, Mar. 27, 1933, provided in part: . . . it is
    hereby ordered that:
      (1) The functions of the Secretary of Agriculture as a member of
    the Federal Farm Board, and the offices of the appointed members of
    the Federal Farm Board, except the office of the member designated
    as chairman thereof, are abolished.
      (2) The name of the Federal Farm Board is changed to the Farm
    Credit Administration.
      (3) The name of the office of Chairman of the Federal Farm Board
    is changed to Governor of the Farm Credit Administration, and he is
    vested with all the powers and duties of the Federal Farm Board.
      (4) The functions of the Secretary of the Treasury as a member of
    the Federal Farm Loan Board, and the offices of the appointed
    members of the Federal Farm Loan Board, except the office of the
    member designated as farm loan commissioner, are abolished, and all
    the powers and functions of the Federal Farm Loan Board, are
    transferred to and vested in the Farm Loan Commissioner, subject to
    the jurisdiction and control of the Farm Credit Administration as
    herein provided.
      (5) There are transferred to the jurisdiction and control of the
    Farm Credit Administration:
      (a) The Federal Farm Loan Bureau and the functions thereof;
    together with the functions of the Federal Farm Loan Board,
    including the functions of the Farm Loan Commissioner;
      (b) The functions of the Treasury Department and the Department
    of Agriculture, and the Secretaries thereof, under Executive
    authorizations to give aid to farmers, dated July 26, 1918, and any
    extensions or amendments thereof;
      (c) The functions of the Secretary of Agriculture under all
    provisions of law relating to the making of advances or loans to
    farmers, fruit growers, producers and owners of livestock and
    crops, and to individuals for the purpose of assisting in forming
    or increasing the capital stock of agricultural-credit
    corporations, livestock-loan companies, or like organizations,
    except Public Resolution No. 74, Seventieth Congress, approved
    December 21, 1928, providing for the Puerto Rican Hurricane Relief
    Commission;
      (d) The Crop Production Loan Office and the Seed Loan Office of
    the Department of Agriculture, and the functions thereof;
      (e) The functions of the Reconstruction Finance Corporation and
    its Board of Directors relating to the appointment of officers and
    agents to manage regional agricultural credit corporations formed
    under section 201(e) of the Emergency Relief and Construction Act
    of 1932 (section 1148 of this title); relating to the establishment
    of rules and regulations for such management; and relating to the
    approval of loans and advances made by such corporations and of the
    terms and conditions thereof.
      (6) The functions vested in the Federal Farm Board by section 9
    of the Agricultural Marketing Act (section 1141g of this title) are
    abolished except that such functions shall continue to be exercised
    to such extent and for such time as may be necessary to permit the
    orderly winding up of the activities of stabilization corporations
    heretofore recognized under authority of such section, and the
    governor of the Farm Credit Administration shall take appropriate
    action for winding up at the earliest practicable date the
    activities of such corporations and all affairs related to the
    exercise of such functions.
      (7) The records, property (including office equipment), and
    personnel used and employed in the execution of the functions
    hereinbefore transferred are transferred to the jurisdiction and
    control of the Farm Credit Administration.
      (8) The sum of $2,000,000 of the unexpended balances of
    appropriations made to the Federal Farm Board by Public Resolutions
    No. 43 and No. 51 of the Seventy-second Congress shall be impounded
    and returned to the Treasury, which sum shall be in addition to the
    other savings to be effected by the Farm Credit Administration as a
    result of this order.
      (9) The unexpended balances of appropriations to the Secretary of
    Agriculture, the Federal Farm Loan Bureau, and the Federal Farm
    Board for salaries, expenses, and all other administrative
    expenditures in the execution of the functions herein vested in the
    Farm Credit Administration shall be transferred to and vested in
    the Farm Credit Administration as a single fund for its use for
    salaries, expenses, and all other administrative expenditures for
    the execution of any or all of such functions without restriction
    as to the particular functions for the execution of which the same
    were originally appropriated.  All other appropriations,
    allotments, and other funds available for use in connection with
    the functions and executive agencies hereby transferred and
    consolidated are hereby transferred to and vested in the Farm
    Credit Administration, and shall be available for use by it, for
    the same purposes as if the Farm Credit Administration were named
    in the law or authority providing such appropriations, allotments,
    or other funds.
      (10) All power, authority, and duties conferred by law upon any
    officer, executive agency, or head thereof, from which or from whom
    transfer is hereinbefore made, in relation to the executive agency
    or function transferred, are transferred to and vested in the
    Governor of the Farm Credit Administration.
      (11) The Governor of the Farm Credit Administration is directed
    to dismiss, furlough, transfer, or make other appropriate
    disposition of such of the officers and employees under his
    jurisdiction and control as are not required for the proper
    execution of the functions of the Farm Credit Administration.
      (12) The Governor of the Farm Credit Administration is authorized
    to execute any and all functions and perform any and all duties
    vested in him through such persons as he shall by order designate
    or employ.
      (13) The Governor of the Farm Credit Administration, by order or
    rules and regulations, may consolidate, regroup, and transfer
    offices, bureaus, activities, and functions in the Farm Credit
    Administration, so far as may be required to carry out the purposes
    to which this order is directed, and may fix or change the names of
    such offices, bureaus, and activities and the duties, powers, and
    titles of their executive heads.
      This order shall take effect upon the sixty-first calendar day
    after its transmission to Congress unless otherwise determined in
    accordance with the provisions of section 407 of the act cited
    above, as amended.
      (All functions, powers and duties of the Governor of the Farm
    Credit Administration which relate to the making, administration,
    and liquidation of all loans identified or referred to in pars.
    5(b), 5(c), and 5(d) of this Executive Order were abolished by act
    Aug. 14, 1946, ch. 964, Sec. 2(a)(2), 60 Stat. 1062, set out as a
    note under sections 1001 to 1006 of Title 7, Agriculture.)
 
-CITE-
    12 USC Sec. 2241                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part B - Farm Credit Administration Organization
 
-HEAD-
    Sec. 2241. Farm Credit Administration
 
-STATUTE-
      The Farm Credit Administration shall be an independent agency in
    the executive branch of the Government. It shall be composed of the
    Farm Credit Administration Board and such other personnel as are
    employed in carrying out the functions, powers, and duties vested
    in the Farm Credit Administration by this chapter.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.7, Dec. 10, 1971, 85 Stat. 617;
    Pub. L. 99-205, title II, Sec. 201(1), Dec. 23, 1985, 99 Stat.
    1688.)
 
-MISC1-
                                 AMENDMENTS
      1985 - Pub. L. 99-205 amended section generally, substituting
    ''Farm Credit Administration Board and such other personnel'' for
    ''Federal Farm Credit Board, the Governor of the Farm Credit
    Administration, and such other personnel''.
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
                  INTERIM IMPLEMENTATION OF 1985 AMENDMENT
      Section 402 of Pub. L. 99-205 provided that:
      ''(a) Until the Chairman of the Farm Credit Administration Board
    provided for under the amendment made by section 201(1) of this Act
    (see section 2242 of this title) is appointed by the President and
    confirmed by the Senate, the Governor of the Farm Credit
    Administration, under the Farm Credit Act of 1971 (this chapter) as
    in effect on the day before the date of enactment of this Act (Dec.
    23, 1985), shall perform the functions of the Chairman prescribed
    for the Chairman by this Act (Pub. L. 99-205, see Short Title of
    1985 Amendment note set out under section 2001 of this title).
      ''(b)(1) Except as provided in paragraph (2), until at least two
    members of the Farm Credit Administration Board provided under the
    amendment made by section 201(1) of this Act (see section 2242 of
    this title) are appointed by the President and confirmed by the
    Senate, the Governor of the Farm Credit Administration, under the
    Farm Credit Act of 1971 (this chapter) as in effect on the day
    before the date of enactment of this Act (Dec. 23, 1985), shall
    perform the functions of the Farm Credit Administration Board
    prescribed for such Board by this Act (Pub. L. 99-205, see Short
    Title of 1985 Amendment note set out under section 2001 of this
    title).
      ''(2) When the Chairman of such Board is so appointed and
    confirmed, the Chairman shall assume any responsibilities and
    powers of the Board being exercised by the Governor under this
    subsection.
      ''(c) In carrying out the duties and functions specified in
    subsections (a) and (b), the Governor of the Farm Credit
    Administration shall serve at the pleasure of the President.
      ''(d) All regulations of the Farm Credit Administration or the
    institutions of the System, and all charters, bylaws, resolutions,
    stock classifications, and policy directives issued or approved by
    the Farm Credit Administration, and all elections held and
    appointments made under the Farm Credit Act of 1971 (this chapter),
    before the date of enactment of this Act (Dec. 23, 1985), shall be
    continuing and remain valid until superseded, modified, or replaced
    under the authority of this Act (Pub. L. 99-205, see Short Title of
    1985 Amendment note set out under section 2001 of this title).''
 
-CITE-
    12 USC Sec. 2242                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part B - Farm Credit Administration Organization
 
-HEAD-
    Sec. 2242. Farm Credit Administration Board
 
-STATUTE-
    (a) Appointment
      The management of the Farm Credit Administration shall be vested
    in a Farm Credit Administration Board (referred to in this part as
    ''the Board''). The Board shall consist of three members, who shall
    be citizens of the United States and broadly representative of the
    public interest.  Members of the Board shall be appointed by the
    President, by and with the advice and consent of the Senate. Not
    more than two members of the Board shall be members of the same
    political party.  Of the persons thus appointed, one shall be
    designated by the President to serve as Chairman of the Board for
    the duration of the member's term.  The members of the Board shall
    be ineligible during the time they are in office and for two years
    thereafter to hold any office, position, or employment in any
    institution of the Farm Credit System.
    (b) Terms of office
      The term of office of each member of the Board shall be six
    years, except that the terms of the two members, other than the
    Chairman, first appointed under subsection (a) of this section
    shall expire, one on the expiration of two years after the date of
    appointment, and one on the expiration of four years after the date
    of appointment.  Members of the Board shall not be appointed to
    succeed themselves, except that the members first appointed under
    subsection (a) of this section for a term of less than six years
    may be reappointed for a full six-year term and members appointed
    to fill unexpired terms of three years or less may be reappointed
    for a full six-year term.  Any vacancy shall be filled for the
    unexpired term on like appointment.  Any member of the Board shall
    continue to serve as such after the expiration of the member's term
    until a successor has been appointed and qualified.
    (c) Organization
      Each member of the Board, within fifteen days after notice of
    appointment, shall subscribe to the oath of office.  The Board may
    transact business if a vacancy exists, provided a quorum is
    present.  A quorum shall consist of two members of the Board. The
    Board shall hold at least one meeting each month and such
    additional meetings at such times and places as it may fix and
    determine.  Such meetings shall be held on the call of the Chairman
    or any two Board members.  The Board shall adopt such rules as it
    deems appropriate for the transaction of business by the Board, and
    shall keep permanent and accurate records and minutes of the
    actions and proceedings of the Board.
    (d) Compensation
      The members of the Board shall devote their full time and
    attention to the business of the Board. The Chairman of the Board
    shall receive compensation at the rate prescribed for level III of
    the Executive Schedule under section 5314 of title 5. Each of the
    other members of the Board shall receive compensation at the rate
    prescribed for level IV of the Executive Schedule under section
    5315 of title 5. Each member of the Board shall be reimbursed for
    necessary travel, subsistence, and other expenses in the discharge
    of the member's official duties without regard to other laws with
    respect to allowance for travel and subsistence of officers and
    employees of the United States. This subsection shall be subject to
    the provisions of section 2245 of this title.
    (e) Qualifications of Farm Credit Administration Board members
      The President shall appoint members of the Board who -
        (1) are experienced or knowledgeable in agricultural economics
      and financial reporting and disclosure;
        (2) are experienced or knowledgeable in the regulation of
      financial entities; or
        (3) have a strong financial, legal, or regulatory background.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.8, Dec. 10, 1971, 85 Stat. 617;
    Pub. L. 96-592, title V, Sec. 503, Dec. 24, 1980, 94 Stat. 3449;
    Pub. L. 99-205, title II, Sec. 201(1), Dec. 23, 1985, 99 Stat.
    1688; Pub. L. 100-233, title IV, Sec. 431(a), Jan. 6, 1988, 101
    Stat. 1658; Pub. L. 102-552, title I, Sec. 102, Oct. 28, 1992, 106
    Stat. 4103.)
 
-MISC1-
                                 AMENDMENTS
      1992 - Subsec. (e). Pub. L. 102-552 added subsec. (e).
      1988 - Subsec. (c). Pub. L. 100-233 amended last sentence
    generally, substituting ''business by the Board,'' for ''its
    business'' and ''the actions and proceedings of the Board'' for
    ''its acts and proceedings''.
      1985 - Pub. L. 99-205 amended section generally, substituting
    provisions of subsecs. (a) to (d) relating to the Farm Credit
    Administration Board for provisions of former subsecs. (a) to (i)
    which related to the Federal Farm Credit Board.
      1980 - Subsec. (h). Pub. L. 96-592 substituted provisions
    relating to applicability of compensation under section 5332 of
    title 5, for provisions setting forth compensation at the rate of
    $100 a day.
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
                  INTERIM IMPLEMENTATION OF 1985 AMENDMENT
      For provisions authorizing interim implementation by Governor of
    Farm Credit Administration of amendments to this section by Pub. L.
    99-205, see section 402 of Pub. L. 99-205, set out as a note under
    section 2241 of this title.
 
-CITE-
    12 USC Sec. 2243                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part B - Farm Credit Administration Organization
 
-HEAD-
    Sec. 2243. Powers of Board
 
-STATUTE-
      The Board shall manage and administer, and establish policies
    for, the Farm Credit Administration. It -
        (1) shall approve the rules and regulations for the
      implementation of this chapter not inconsistent with its
      provisions;
        (2) shall provide for the examination of the condition of, and
      general regulation of the performance of the powers, functions,
      and duties vested in, each institution of the Farm Credit System;
        (3) shall provide for the performance of all the powers and
      duties vested in the Farm Credit Administration; and
        (4) may require such reports as it deems necessary from the
      institutions of the Farm Credit System.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.9, Dec. 10, 1971, 85 Stat. 619;
    Pub. L. 99-205, title II, Sec. 201(1), Dec. 23, 1985, 99 Stat.
    1689; Pub. L. 100-233, title VIII, Sec. 805(w), Jan. 6, 1988, 101
    Stat. 1716.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-233 struck out ''; civil proceedings'' in
    section catchline.
      1985 - Pub. L. 99-205 substituted requirement that the Board
    manage and administer, and establish policies for, the Farm Credit
    Administration for former requirement that the Federal Farm Credit
    Board establish the general policy for the guidance of the Farm
    Credit Administration, including matters of broad and general
    supervisory, advisory, or policy nature; incorporated existing text
    in provisions designated cls. (1) to (4); substituted in cl. (2)
    ''general regulation'' for ''general supervision''; and struck out
    last sentence which read as follows: ''The Board shall function as
    a unit without delegating any of its functions to individual
    members, but may appoint committees and subcommittees for studies
    and reports for consideration by the Board. It shall not operate in
    an administrative capacity.''
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
                  INTERIM IMPLEMENTATION OF 1985 AMENDMENT
      For provisions authorizing interim implementation by Governor of
    Farm Credit Administration of amendments to this section by Pub. L.
    99-205, see section 402 of Pub. L. 99-205, set out as a note under
    section 2241 of this title.
 
-CITE-
    12 USC Sec. 2244                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part B - Farm Credit Administration Organization
 
-HEAD-
    Sec. 2244. Chairman; responsibilities; governing standards
 
-STATUTE-
    (a) Chairman of Farm Credit Administration Board; power and
        authority
      (1) The Chairman of the Board shall be the chief executive
    officer of the Farm Credit Administration.
      (2) In carrying out the responsibilities of the chief executive
    officer, the Chairman shall be responsible for directing the
    implementation of policies and regulations adopted by the Board
    and, after consultation with the Board, the execution of the
    administrative functions and duties of the Farm Credit
    Administration.
      (3) In carrying out policies as directed by the Board, the
    Chairman shall act as spokesperson for the Board and represent the
    Board and the Farm Credit Administration in their official
    relations within the Federal Government.
      (4) Under policies adopted by the Board, the Chairman shall
    consult on a regular basis with -
        (A) the Secretary of the Treasury concerning the exercise, by
      the System, of the powers conferred under section 2153 of this
      title;
        (B) the Board of Governors of the Federal Reserve System
      concerning the effect of System lending activities on national
      monetary policy; and
        (C) the Secretary of Agriculture concerning the effect of
      System policies on farmers, ranchers, and the agricultural
      economy.
    (b) Governing standards
      In carrying out responsibilities under this chapter, the Chairman
    of the Board shall be governed by general policies adopted by the
    Board and by such regulatory decisions, findings, and
    determinations as the Board may by law be authorized to make and,
    as to third persons, all acts of the Chairman of the Board shall be
    conclusively presumed to be in compliance with such general
    policies and regulatory decisions, findings, and determinations.
    (c) Enforcement of rules, regulations, and orders of Board; civil
        proceedings; representation by attorneys
      The Chairman of the Board shall enforce the rules, regulations,
    and orders of the Board. Except as provided in section 518 of title
    28, relating to litigation before the Supreme Court, attorneys
    designated by the Chairman shall represent the Farm Credit
    Administration in any civil proceeding or civil action brought in
    connection with the administration of conservatorships and
    receiverships.  Attorneys designated by the Chairman may represent
    the Farm Credit Administration in any other civil proceedings or
    civil action when so authorized by the Attorney General under
    provisions of title 28.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.10, Dec. 10, 1971, 85 Stat. 619;
    Pub. L. 96-592, title V, Sec. 504, Dec. 24, 1980, 94 Stat. 3449;
    Pub. L. 99-205, title II, Sec. 201(1), Dec. 23, 1985, 99 Stat.
    1689; Pub. L. 100-233, title IV, Sec. 431(b), Jan. 6, 1988, 101
    Stat. 1658.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Subsec. (a). Pub. L. 100-233 amended subsec. (a)
    generally.  Prior to amendment, subsec. (a) read as follows: ''The
    Chairman of the Board shall be the executive officer of the Board
    and the chief executive officer of the Farm Credit Administration.
    The Chairman shall be responsible for directing the implementation
    of the policies and regulations adopted by the Board and the
    execution of all of the administrative functions and duties of the
    Farm Credit Administration. The Chairman shall be the spokesman for
    the Board and the Farm Credit Administration and shall represent
    the Board and the Farm Credit Administration in their official
    relations within the Government. Under policies adopted by the
    Board, the Chairman shall consult on a regular basis with the
    Secretary of the Treasury in connection with the exercise by the
    System of the powers conferred under section 2153 of this title,
    with the Board of Governors of the Federal Reserve System in
    connection with the effect of System lending activities on national
    monetary policy, and with the Secretary of Agriculture in
    connection with the effect of System policies on farmers and the
    agricultural economy.''
      1985 - Pub. L. 99-205 substituted provisions relating to the
    Chairman of the Board, his responsibilities, and governing
    standards for provisions relating to the Governor of the Farm
    Credit Administration.
      1980 - Pub. L. 96-592 inserted provisions relating to
    requirements of the Governor to consult with the Secretary of the
    Treasury and the Governors of the Federal Reserve System.
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
                  INTERIM IMPLEMENTATION OF 1985 AMENDMENT
      For provisions authorizing interim implementation by Governor of
    Farm Credit Administration of amendments to this section by Pub. L.
    99-205, see section 402 of Pub. L. 99-205, set out as a note under
    section 2241 of this title.
 
-CITE-
    12 USC Sec. 2245                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part B - Farm Credit Administration Organization
 
-HEAD-
    Sec. 2245. Organization of Farm Credit Administration
 
-STATUTE-
    (a) Policies of Board
      The Chairman of the Farm Credit Administration Board, in carrying
    out the powers and duties vested in the Chairman by this chapter,
    and Acts supplementary thereto, shall be governed by policies of
    the Board and by such regulatory decisions, findings, and
    determinations as the Board may by law be authorized to make.
    (b) Appointments
      The Chairman of the Board shall appoint such personnel as may be
    necessary to carry out the functions of the Farm Credit
    Administration. The appointment by the Chairman of the heads of
    major administrative divisions under the Board shall be subject to
    the approval of the Board.
    (c) Personnel
      (1) Appointments by Board members
        Personnel employed regularly and full-time in the immediate
      offices of Board members shall be appointed by each such Board
      member.
      (2) Officers and employees
        (A) Appointment, compensation, and benefits
          The Chairman shall fix the compensation and number of, and
        appoint and direct, employees of the Administration. The
        Chairman may set and adjust the rates of basic pay for
        employees of the Administration without regard to the
        provisions of chapter 51, or subchapter III of chapter 53, of
        title 5. The Chairman may provide such additional compensation
        and benefits to employees of the Administration as is necessary
        to maintain comparability with the total amount of compensation
        and benefits provided by other Federal bank regulatory
        agencies.  In setting and adjusting the total amount of
        compensation and benefits for employees of the Administration,
        the Chairman shall consult with, and seek to maintain
        comparability with, other Federal bank regulatory agencies.
        (B) ''Other Federal bank regulatory agencies'' defined
          For purposes of this subsection, the term ''other Federal
        bank regulatory agencies'' has the same meaning given to the
        term ''appropriate Federal banking agency'' in section 1813(q)
        of this title.
        (C) Ethics in Government
          The officers and employees of the agency shall be -
            (i) subject to the Ethics in Government Act of 1978; and
            (ii) considered officers or employees of the United States
          for the purposes of sections 201 through 203, and sections
          205 through 209, of title 18.
      (3) Delegation
        The powers of the Chairman as chief executive officer necessary
      for day to day management may be exercised and performed by the
      Chairman through such other officers and employees of the
      Administration as the Chairman shall designate, except that the
      Chairman may not delegate powers specifically reserved to the
      Chairman by this chapter without Board approval.
    (d) Funding
      The operations of the Farm Credit Administration, and the
    salaries of members of the Board and employees of the
    Administration, shall be funded and paid for from the fund created
    under section 2250 of this title.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.11, Dec. 10, 1971, 85 Stat. 620;
    Pub. L. 99-205, title II, Sec. 201(1), Dec. 23, 1985, 99 Stat.
    1690; Pub. L. 100-233, title IV, Sec. 431(c), title VIII, Sec.
    805(x), Jan. 6, 1988, 101 Stat. 1659, 1716; Pub. L. 100-399, title
    IV, Sec. 415(a), title VII, Sec. 702(b), Aug. 17, 1988, 102 Stat.
    1004, 1006; Pub. L. 101-73, title XII, Sec. 1210, Aug. 9, 1989, 103
    Stat. 523.)
 
-REFTEXT-
                             REFERENCES IN TEXT
      The Ethics in Government Act of 1978, referred to in subsec.
    (c)(2)(C)(i), is Pub. L. 95-521, Oct. 26, 1978, 92 Stat. 1824, as
    amended.  For complete classification of this Act to the Code, see
    Short Title note set out under section 101 of Pub. L. 95-521 in the
    Appendix to Title 5, Government Organization and Employees, and
    Tables.
 
-MISC2-
                                 AMENDMENTS
      1989 - Subsec. (c)(2). Pub. L. 101-73 amended par. (2)
    generally.  Prior to amendment, par. (2) read as follows: ''The
    officers and employees of the agency shall be -
        ''(A) subject to the Ethics in Government Act of 1978 (2 U.S.C.
      701 et seq.);
        ''(B) considered officers or employees of the United States for
      the purposes of sections 201 through 203, and sections 205
      through 209, of title 18; and
        ''(C) subject to section 5373 of title 5.''
      1988 - Pub. L. 100-233, Sec. 805(x), which directed the amendment
    of this section by striking out the last sentence, was repealed by
    Pub. L. 100-399, Sec. 702(b). See Construction of 1988 Amendment
    note below.
      Pub. L. 100-233, Sec. 431(c), amended section generally,
    substituting subsecs. (a) to (d) for former text consisting of
    single undesignated paragraph.
      Subsec. (c)(2)(C). Pub. L. 100-399, Sec. 415(a), substituted
    ''5373'' for ''5315''.
      1985 - Pub. L. 99-205 substituted provisions respecting
    organization of the Farm Credit Administration for provisions
    relating to compensation and expense allowance of the Governor of
    the Farm Credit Administration.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by section 415(a) of Pub. L. 100-399 effective as if
    enacted immediately after enactment of Pub. L. 100-233, which was
    approved Jan. 6, 1988, see section 1001(a) of Pub. L. 100-399, set
    out as a note under section 2002 of this title.
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
                       CONSTRUCTION OF 1988 AMENDMENT
      Section 702(b) of Pub. L. 100-399 provided that section 805(x) of
    Pub. L. 100-233, cited as a credit to this section, is repealed and
    that this section shall be applied and administered as if such
    section had not been enacted.
                  INTERIM IMPLEMENTATION OF 1985 AMENDMENT
      For provisions authorizing interim implementation by Governor of
    Farm Credit Administration of amendments to this section by Pub. L.
    99-205, see section 402 of Pub. L. 99-205, set out as a note under
    section 2241 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2242 of this title.
 
-CITE-
    12 USC Sec. 2246                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part B - Farm Credit Administration Organization
 
-HEAD-
    Sec. 2246. Advisory committees
 
-STATUTE-
      The Chairman of the Board, subject to the approval of the Board,
    may establish one or more advisory committees in accordance with
    the Federal Advisory Committee Act and may appoint to such
    committee or committees individuals who are members of the Federal
    Farm Credit Board when such Board is terminated by the Farm Credit
    Amendments Act of 1985.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.12, Dec. 10, 1971, 85 Stat. 620;
    Pub. L. 99-205, title II, Sec. 201(1), Dec. 23, 1985, 99 Stat.
    1690; Pub. L. 100-233, title IV, Sec. 431(d), Jan. 6, 1988, 101
    Stat. 1660.)
 
-REFTEXT-
                             REFERENCES IN TEXT
      The Federal Advisory Committee Act, referred to in text, is Pub.
    L. 92-463, Oct. 6, 1972, 86 Stat. 770, as amended, which is set out
    in the Appendix to Title 5, Government Organization and Employees.
      The Farm Credit Amendments Act of 1985, referred to in text, is
    Pub. L. 99-205, Dec. 23, 1985, 99 Stat. 1678. For complete
    classification of this Act to the Code, see Short Title of 1985
    Amendment note set out under section 2001 of this title and Tables.
 
-MISC2-
                                 AMENDMENTS
      1988 - Pub. L. 100-233 inserted '', subject to the approval of
    the Board,'' after ''Chairman of the Board''.
      1985 - Pub. L. 99-205 substituted provisions respecting advisory
    committees for provisions respecting compliance by the Governor
    with orders of the Federal Farm Credit Board.
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
                  INTERIM IMPLEMENTATION OF 1985 AMENDMENT
      For provisions authorizing interim implementation by Governor of
    Farm Credit Administration of amendments to this section by Pub. L.
    99-205, see section 402 of Pub. L. 99-205, set out as a note under
    section 2241 of this title.
 
-CITE-
    12 USC Sec. 2247                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part B - Farm Credit Administration Organization
 
-HEAD-
    Sec. 2247. Repealed. Pub. L. 99-205, title II, Sec. 201(2), Dec.
        23, 1985, 99 Stat. 1690
 
-MISC1-
      Section, Pub. L. 92-181, title V, Sec. 5.13, Dec. 10, 1971, 85
    Stat. 620, related to authority of Governor of the Farm Credit
    Administration to fix powers and duties of divisions and
    instrumentalities of the Administration.
                          EFFECTIVE DATE OF REPEAL
      Repeal effective thirty days after Dec. 23, 1985, see section 401
    of Pub. L. 99-205, set out as an Effective Date of 1985 Amendment
    note under section 2001 of this title.
 
-CITE-
    12 USC Sec. 2248                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part B - Farm Credit Administration Organization
 
-HEAD-
    Sec. 2248. Seal of the Farm Credit Administration
 
-STATUTE-
      The Farm Credit Administration shall have a seal, as adopted by
    the Board, which shall be judicially noted.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.13, formerly Sec. 5.14, Dec. 10,
    1971, 85 Stat. 620; renumbered Sec. 5.13 and amended Pub. L.
    99-205, title II, Sec. 201(3), Dec. 23, 1985, 99 Stat. 1690.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 5.13 of Pub. L. 92-181 was classified to section
    2247 of this title prior to repeal by Pub. L. 99-205, title II,
    Sec. 201(2), Dec. 23, 1985, 99 Stat. 1690.
                                 AMENDMENTS
      1985 - Pub. L. 99-205 substituted ''Board'' for ''Governor''.
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
 
-CITE-
    12 USC Sec. 2249                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part B - Farm Credit Administration Organization
 
-HEAD-
    Sec. 2249. Administrative expenses
 
-STATUTE-
      The Farm Credit Administration may, within the limits of funds
    available therefor, make necessary expenditures for personnel
    services and rent at the seat of Government and elsewhere; contract
    stenographic reporting services; purchase and exchange lawbooks,
    books of reference, periodicals, newspapers, expenses of attendance
    at meetings and conferences; purchase, operation, and maintenance
    at the seat of Government and elsewhere of motor-propelled
    passenger-carrying vehicles and other vehicles; printing and
    binding; and for such other facilities and services, including
    temporary employment by contract or otherwise, as it may from time
    to time find necessary for the proper administration of this
    chapter.  The Farm Credit Administration may dispose of property so
    acquired and any amounts collected from the disposition of such
    property shall be deposited in the special fund provided for in
    section 2250(b) of this title and shall be available to the
    Administration in the same manner and for the same purposes as the
    funds collected under section 2250(a) of this title.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.14, formerly Sec. 5.15, Dec. 10,
    1971, 85 Stat. 620; Pub. L. 96-592, title V, Sec. 505, Dec. 24,
    1980, 94 Stat. 3449; renumbered Sec. 5.14 and amended Pub. L.
    99-205, title II, Sec. 201(4), Dec. 23, 1985, 99 Stat. 1690.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 5.14 of Pub. L. 92-181 was renumbered section
    5.13 and is classified to section 2248 of this title.
                                 AMENDMENTS
      1985 - Pub. L. 99-205 made technical amendments to the references
    to sections 2250(b) and 2250(a) of this title appearing in second
    sentence to reflect the renumbering of the corresponding section of
    the original act.
      1980 - Pub. L. 96-592 inserted provisions relating to disposal of
    property and deposit of amounts from such disposal.
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2251 of this title.
 
-CITE-
    12 USC Sec. 2250                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part B - Farm Credit Administration Organization
 
-HEAD-
    Sec. 2250. Farm Credit Administration operating expenses fund
 
-STATUTE-
    (a) Determinations required
      (1) Generally
        Prior to the first day of each fiscal year, the Farm Credit
      Administration shall determine -
          (A) the cost of administering this chapter for the subsequent
        fiscal year, including expenses for official functions;
          (B) the amount of assessments that will be required to pay
        such administrative expenses, taking into consideration the
        funds contained in the Administrative Expense Account, and
        maintain a necessary reserve; and
          (C) the amount of assessments that will be required to pay
        the costs of supervising and examining the Mortgage Corporation
        established under subchapter VIII of this chapter.
      (2) Apportionments
        On the basis of the determinations made under paragraph (1),
      the Farm Credit Administration shall -
          (A) apportion the amount of the assessment described in
        paragraph (1)(B) among the System institutions on a basis that
        is determined to be equitable by the Farm Credit
        Administration;
          (B) assess and collect such apportioned amounts from time to
        time during the fiscal year as determined necessary by the Farm
        Credit Administration; and
          (C) assess and collect from the Mortgage Corporation, from
        time to time during the fiscal year, the amount described in
        paragraph (1)(C).
    (b) Deposits into fund
      (1) Treasury fund
        The amounts collected under subsection (a) of this section
      shall be deposited in the Farm Credit Administration
      Administrative Expense Account. The Expense Account shall be
      maintained in the Treasury of the United States and shall be
      available, without regard, for purposes of sequestration, to the
      Balanced Budget and Emergency Deficit Control Act of 1985 (2
      U.S.C. 900 et seq.), to pay the expenses of the Farm Credit
      Administration.
      (2) Nongovernment funds
        The funds contained in the Expense Account shall not be
      construed to be Federal Government funds or appropriated moneys.
      (3) Investment
        (A) Authority
          On request of the Farm Credit Administration, the Secretary
        of the Treasury shall invest and reinvest such amounts
        contained in the Expense Account as, in the determination of
        the Farm Credit Administration, are in excess of the amounts
        necessary for current expenses of the Farm Credit
        Administration.
        (B) Returns
          All income earned from such investments and reinvestments
        shall be deposited in the Expense Account.
        (C) Type
          Such investments shall be made in public debt securities with
        maturities suitable to the needs of the Expense Account, as
        determined by the Farm Credit Administration, and bearing
        interest at rates determined by the Secretary of the Treasury,
        taking into consideration current market yields on outstanding
        marketable obligations of the United States of comparable
        maturities.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.15, formerly Sec. 5.16, Dec. 10,
    1971, 85 Stat. 620; renumbered Sec. 5.15 and amended Pub. L.
    99-205, title II, Sec. 201(5), 205(g)(6), Dec. 23, 1985, 99 Stat.
    1690, 1707; Pub. L. 100-233, title IV, Sec. 432(a), Jan. 6, 1988,
    101 Stat. 1660; Pub. L. 100-399, title IV, Sec. 416(a), (b), Aug.
    17, 1988, 102 Stat. 1004; Pub. L. 102-552, title V, Sec. 510, Oct.
    28, 1992, 106 Stat. 4132.)
 
-REFTEXT-
                             REFERENCES IN TEXT
      The Balanced Budget and Emergency Deficit Control Act of 1985,
    referred to in subsec. (b)(1), is title II of Pub. L. 99-177, Dec.
    12, 1985, 99 Stat. 1038, as amended, which enacted chapter 20 (Sec.
    900 et seq.) and sections 654 to 656 of Title 2, The Congress,
    amended sections 602, 622, 631 to 642, and 651 to 653 of Title 2,
    sections 1104 to 1106, and 1109 of Title 31, Money and Finance, and
    section 911 of Title 42, The Public Health and Welfare, repealed
    section 661 of Title 2, enacted provisions set out as notes under
    section 900 of Title 2 and section 911 of Title 42, and amended
    provisions set out as a note under section 621 of Title 2. For
    complete classification of this Act to the Code, see Short Title
    note set out under section 900 of Title 2 and Tables.
 
-MISC2-
                              PRIOR PROVISIONS
      A prior section 5.15 of Pub. L. 92-181 was renumbered section
    5.14 and is classified to section 2249 of this title.
                                 AMENDMENTS
      1992 - Subsec. (b)(1). Pub. L. 102-552 inserted '', for purposes
    of sequestration,'' after ''regard'' and struck out ''or any other
    law'' before '', to pay the expenses''.
      1988 - Pub. L. 100-233 amended section generally.  Prior to
    amendment, section read as follows:
      ''(a) The Farm Credit Administration shall prior to the first day
    of each fiscal year estimate the cost of administrative expenses
    for the ensuing fiscal year in administering this chapter,
    including official functions, and shall apportion the amount so
    determined among the institutions of the System on such equitable
    basis as the Farm Credit Administration shall determine, and shall
    assess against and collect in advance the amounts so apportioned
    from the institutions among which the apportionment is made.
      ''(b) The amounts collected pursuant to subsection (a) of this
    section shall be covered into the Treasury, and credited to a
    special fund and, without regard to other law, shall be available
    to the Farm Credit Administration for expenditure during each
    fiscal year for salaries and expenses of the Farm Credit
    Administration. As soon as practicable after the end of each such
    fiscal year, the Farm Credit Administration shall determine, on a
    fair and reasonable basis, the cost of operation of the Farm Credit
    Administration and the part thereof which fairly and equitably
    should be allocated to each bank and association as its share of
    the cost during the fiscal year of the Farm Credit Administration.
    If the amount so allocated is greater than the amount collected
    from the bank or other institutions, the difference shall be
    collected from such bank or other institutions, and, if less, shall
    be refunded from the special fund to the bank or other institutions
    entitled thereto or credited in the special fund to such bank or
    other institutions for use for the same purposes in future fiscal
    years.''
      Subsec. (a)(2)(A). Pub. L. 100-399, Sec. 416(a), substituted
    ''the assessment described in paragraph (1)(B)'' for ''such
    assessment''.
      Subsec. (a)(2)(C). Pub. L. 100-399, Sec. 416(b), substituted
    ''described'' for ''specified''.
      1985 - Subsec. (b). Pub. L. 99-205, Sec. 205(g)(6), substituted
    ''the Farm Credit Administration'' for ''said Administration''
    twice in first sentence, and for ''the Administration'' and ''such
    Administration'' in second sentence.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2245, 2249, 2251 of this
    title.
 
-CITE-
    12 USC Sec. 2251                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part B - Farm Credit Administration Organization
 
-HEAD-
    Sec. 2251. Quarters and facilities for the Farm Credit
        Administration
 
-STATUTE-
      As an alternate to the rental of quarters under section 2249 of
    this title, and without regard to any other provision of law, the
    banks of the System, with the concurrence of two-thirds of the bank
    boards, are hereby authorized -
      (1) To lease or acquire real property in the District of Columbia
    or elsewhere for quarters of the Farm Credit Administration.
      (2) To construct, develop, furnish, and equip such building
    thereon and such facilities appurtenant thereto as in their
    judgment may be appropriate to provide, to the extent the Board may
    deem advisable, suitable, and adequate quarters and facilities for
    the Farm Credit Administration.
      (3) To enlarge, remodel, or reconstruct the same.
      (4) To make or enter into contracts for any of the foregoing.
      (5) To sell or otherwise dispose of any interest in property
    leased or acquired under the foregoing if authorized by the Board.
    The Board may require of the respective banks of the System, and
    they shall make to the Farm Credit Administration, such advances of
    funds for the purposes set out in this section as in the sole
    judgment of the Board may from time to time be advisable for the
    purposes of this section.  Such advances shall be in addition to
    and kept in a separate fund from the assessments authorized in
    section 2250 of this title and shall be apportioned by the Board
    among the banks in proportion to the total assets of the respective
    banks, and determined in such manner and at such times as the Board
    may prescribe.  The powers of the banks of the System and purposes
    for which obligations may be issued by such banks are hereby
    enlarged to include the purpose of obtaining funds to permit the
    making of advances required by this section.  The plans and
    decisions for such building and facilities and for the enlargement,
    remodeling, or reconstruction thereof shall be such as is approved
    in the sole discretion of the Board. In actions undertaken by the
    banks pursuant to the foregoing provisions of this section, the
    Farm Credit Administration may act as agent for the banks.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.16, formerly Sec. 5.17, Dec. 10,
    1971, 85 Stat. 621; Pub. L. 96-592, title V, Sec. 506, Dec. 24,
    1980, 94 Stat. 3449; renumbered Sec. 5.16 and amended Pub. L.
    99-205, title II, Sec. 201(6), Dec. 23, 1985, 99 Stat. 1690; Pub.
    L. 100-233, title VIII, Sec. 805(y), Jan. 6, 1988, 101 Stat. 1717;
    Pub. L. 100-399, title IX, Sec. 901(l), Aug. 17, 1988, 102 Stat.
    1008.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 5.16 of Pub. L. 92-181 was renumbered section
    5.15 and is classified to section 2250 of this title.
                                 AMENDMENTS
      1988 - Pub. L. 100-399 substituted ''bank boards'' for ''district
    boards'' in introductory provisions.
      Pub. L. 100-233 transferred undesignated provisions following
    par. (4) consisting of four sentences relating to advances of funds
    for purposes set out in this section as in the sole judgment of the
    Board may from time to time be advisable for purposes of this
    section, to a position immediately before last sentence of this
    section which provides for agency status of Administration for the
    banks.
      1985 - Pub. L. 99-205, Sec. 201(6)(A)-(C), made technical
    amendments to the references to sections 2249 and 2250 of this
    title in first and third sentences to reflect the renumbering of
    the corresponding sections of the original act, and struck out
    ''Federal Farm Credit'' before ''Board'' in par. (2) of first
    sentence.
      1980 - Pub. L. 96-592 added par. (5) and provisions respecting
    agency status of Administration for the banks.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective immediately after
    amendment made by section 401 of Pub. L. 100-233, which was
    effective 6 months after Jan. 6, 1988, see section 1001(b) of Pub.
    L. 100-399, set out as a note under section 2002 of this title.
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
 
-CITE-
    12 USC Sec. 2252                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part B - Farm Credit Administration Organization
 
-HEAD-
    Sec. 2252. Powers and duties
 
-STATUTE-
    (a) Enumerated powers
      The Farm Credit Administration shall have the following powers,
    functions, and responsibilities in connection with the institutions
    of the Farm Credit System and the administration of this chapter:
        (1) Modify the boundaries of farm credit districts, with due
      regard for the farm credit needs of the country, as approved by
      the Board, with the concurrence of the district banks involved.
        (2)(A) Where necessary or appropriate to carry out the policy
      and objectives of this chapter, issue and approve amendments to
      Federal charters of institutions of the System; approve change in
      names of banks operating under this chapter; approve the merger
      of districts when agreed to by the district bank boards involved
      and by a majority vote of the voting stockholders and
      contributors to the guaranty funds of each bank for each of such
      districts, voting in the same manner as is provided in section
      2279a of this title; approve mergers and any related activities
      as provided for in subchapter VII of this chapter; and approve
      the consolidation or division of the territories of institutions
      when agreed to by a majority vote of the voting stockholders or
      contributors to the guaranty fund of each of the institutions
      involved; and approve consolidations of boards of directors when
      agreed to by a majority vote of the voting stockholders or
      contributors to the guaranty fund of each of the institutions
      involved.  In issuing charters and certificates of territory for
      district-wide mergers of associations where stockholders of one
      or more associations did not approve the merger, the charter of
      the new or merged association shall not include the territory of
      the disagreeing association or associations; charters issued
      during calendar year 1985 for district-wide new or merged
      associations which included the territory of a disagreeing
      association shall be revoked and reissued to exclude such
      territory, unless subsequently agreed to by the board of
      directors of such association or associations.  The Farm Credit
      Administration Board shall ensure that disapproving associations
      (A) shall not be charged any assessment under this chapter at a
      rate higher than that charged other like associations in the
      district, and (B) shall be provided with financial services and
      assistance on the same basis as other like associations in the
      district (including, but not limited to, access to credit and
      rates of interest on loans and discounts) by a district Farm
      Credit bank to the association and its member-borrowers.  The
      Farm Credit Administration Board, after consultation with the
      respective boards of directors of the affected banks, may require
      two or more banks operating under the same or different titles to
      merge if the Board determines that one of such banks has failed
      to meet its outstanding obligations.
        (B) The Farm Credit Administration shall not issue a charter
      to, or approve an amendment to the charter of, any institution of
      the Farm Credit System to operate under subchapter I or II of
      this chapter that would authorize the institution to exercise
      lending authority, whether directly or indirectly as an agent of
      a Farm Credit Bank, in a territory in which the charter of
      another such institution authorizes the other institution to
      exercise like authority, whether directly or indirectly as an
      agent of a Farm Credit Bank, except with the approval of -
          (i) in a case affecting only the charter of one or more
        associations -
            (I) a majority of the shareholders (present and voting or
          voting by proxy) of each of the associations that would have
          like lending authority (whether directly or indirectly as an
          agent of a Farm Credit Bank) in any of that territory if the
          charter action were taken; and
            (II) a majority of the board of directors of the Farm
          Credit Bank with which the affected associations are
          affiliated; or
          (ii) in a case affecting the charter of one or more banks -
            (I) a majority of the shareholders (present and voting or
          voting by proxy) of the affiliated associations of each of
          the banks that would have like lending authority in any of
          that territory if the charter action were taken;
            (II) a majority of the shareholders (present and voting or
          voting by proxy) of each of the banks that would have like
          lending authority in any of that territory if the charter
          action were taken; and
            (III) a majority vote of the boards of directors of each of
          the banks that would have like lending authority in any of
          that territory if the charter action were taken.
        (C) Subparagraph (B) shall apply only in those geographic areas
      where, due to the failure of a Federal intermediate credit bank
      to merge in accordance with section 410(a) of the Agricultural
      Credit Act of 1987 (12 U.S.C. 2011 note), the Federal
      intermediate credit bank or its successor is chartered to provide
      short- and intermediate-term credit, and a neighboring Farm
      Credit Bank that is not the successor to the Federal intermediate
      credit bank is chartered to provide long-term credit, in the same
      geographic territory.
        (3) Make annual reports directly to Congress on the condition
      of the System and its institutions, based on the examinations
      carried out under section 2254 of this title, and on the manner
      and extent to which the purposes and objectives of this chapter
      are being carried out and, from time to time, recommend directly
      legislative changes.  The annual reports shall include a summary
      and analysis of the reports submitted to the Farm Credit
      Administration by the Farm Credit Banks under section 2207(b) of
      this title relating to programs for serving young, beginning, and
      small farmers and ranchers.
        (4) Approve the issuance of obligations of the System under
      subsections (c) and (d) of section 2153 of this title for the
      purpose of funding the authorized operations of the institutions
      of the System, and prescribe collateral therefor.
        (5) Grant approvals provided for under this chapter either on a
      case-by-case basis or through regulations that confer approval on
      actions of Farm Credit System institutions.
        (6) Establish standards for the System institutions with
      respect to loan security requirements and regulate the borrowing,
      repayment, and transfer of funds and equities between
      institutions of the System.
        (7) Conduct loan and collateral security review.
        (8) Regulate the preparation by System institutions and the
      dissemination to stockholders and investors of information on the
      financial condition and operations of such institutions, except
      that the requirements of the Farm Credit Administration governing
      the dissemination to stockholders of quarterly reports of System
      institutions may not be more burdensome or costly than the
      requirements applicable to national banks, and the Farm Credit
      Administration may not require any System institution to disclose
      in any report to stockholders information concerning the
      condition or classification of a loan -
          (A) to a director of the institution -
            (i) who has resigned before the time for filing the
          applicable report with the Farm Credit Administration; or
            (ii) whose term of office will expire no later than the
          date of the meeting of stockholders to which the report
          relates; or
          (B) to a member of the immediate family of a director of the
        institution unless -
            (i) the family member resides in the same household as the
          director; or
            (ii) the director has a material financial or legal
          interest in the loan or business operation of the family
          member.
        (9) Prescribe rules and regulations necessary or appropriate
      for carrying out this chapter.
        (10) Exercise the powers conferred on it under part C of this
      subchapter for the purpose of ensuring the safety and soundness
      of System institutions.
        (11) Exercise such incidental powers as may be necessary or
      appropriate to fulfill its duties and carry out the purposes of
      this chapter.
        (12) Require surety bonds or other provisions for protection of
      the assets of the institutions of the System against losses
      occasioned by employees.
        (13)(A) Subject to subparagraph (B), the Farm Credit
      Administration may approve an amendment to the charter of any
      institution of the Farm Credit System operating under subchapter
      I or II of this chapter, which would authorize the institution to
      exercise lending authority in any territory -
          (i) in the geographic area served by an association that was
        reassigned pursuant to section 433 of the Agricultural Credit
        Act of 1987 (12 U.S.C. 2071 note) (where the geographic area
        was a part of the association's territory as of the date of the
        reassignment); and
          (ii) in which the charter of an institution that is not
        seeking the charter amendment authorizes the institution to
        exercise the type of lending authority that is the subject of
        the charter request.
        (B) The Farm Credit Administration may approve a charter
      amendment under subparagraph (A) only on the approval of -
          (i) the respective boards of directors of the associations
        that, if the charter request is approved, would exercise like
        lending authority in any of the territory that is the subject
        of the charter request;
          (ii) a majority of the stockholders of each association
        described in clause (i) voting, in person or by proxy, at a
        duly authorized stockholders' meeting; and
          (iii) the respective boards of directors of the Farm Credit
        Banks that, if the charter request is approved, would exercise,
        either directly or through associations, like lending authority
        in any of the territory described in subparagraph (A)(i).
        (14)(A) Subject to subparagraph (B), the Farm Credit
      Administration may approve a request to charter an association of
      the Farm Credit System to operate under subchapter II of this
      chapter where the proposed charter -
          (i) will include any of the geographic area included in the
        territory served by an association that was reassigned pursuant
        to section 433 of the Agricultural Credit Act of 1987 (12
        U.S.C. 2071 note) (where the geographic area was a part of the
        association's territory as of the date of the reassignment);
        and
          (ii) will authorize the association to exercise lending
        authority in any territory in the geographic area in which the
        charter of an association that is not requesting the charter
        authorizes the association to exercise the type of lending
        authority that is the subject of the charter request.
        (B) The Farm Credit Administration may approve a charter
      request under subparagraph (A) only on the approval of -
          (i) the respective boards of directors of the associations
        that, if the charter request is approved, would exercise like
        lending authority in any of the territory that is the subject
        of the charter request;
          (ii) a majority vote of the stockholders (if any) of each
        association described in clause (i) voting, in person or by
        proxy, at a duly authorized stockholder's meeting; and
          (iii) the respective boards of directors of the Farm Credit
        Banks that, if the charter request is approved, would exercise,
        either directly or through associations, like lending authority
        in any of the territory described in subparagraph (A)(i).
    (b) Exclusions
      The Farm Credit Administration shall not have authority, either
    direct or indirect, to approve bylaws, or any amendments or
    modifications or changes to bylaws, of System institutions.
    (c) Proposed and final regulations; procedures applicable
      (1) At least thirty days prior to publishing any proposed
    regulation in the Federal Register, the Farm Credit Administration
    shall transmit a copy of the regulation to the Committee on
    Agriculture of the House of Representatives and the Committee on
    Agriculture, Nutrition, and Forestry of the Senate. The Farm Credit
    Administration shall also transmit to such committees a copy of any
    final regulation prior to its publication in the Federal Register.
    Except as provided in paragraph (2) of this subsection, no final
    regulation of the Farm Credit Administration shall become effective
    prior to the expiration of thirty calendar days after it is
    published in the Federal Register during which either or both
    Houses of the Congress are in session.
      (2) In the case of an emergency, a final regulation of the Farm
    Credit Administration may become effective without regard to the
    last sentence of paragraph (1) of this subsection if the Farm
    Credit Administration notifies in writing the Committee on
    Agriculture of the House of Representatives and the Committee on
    Agriculture, Nutrition, and Forestry of the Senate setting forth
    the reasons why it is necessary to make the regulation effective
    prior to the expiration of the thirty-day period.
    (d) Legislative veto of regulations; procedures applicable
      (1) If there are any unresolved differences between the Farm
    Credit Administration and the Board of Governors of the Federal
    Reserve System as to whether any regulation implementing section
    2128(b) of this title or the other provisions of subchapter III
    relating to the authority under section 2128(b) of this title
    conforms to national banking policies, objectives and limitations,
    simultaneously with promulgation of any such regulation under this
    chapter, and simultaneously with promulgation of any regulation
    implementing section 2015(b) of this title, the Farm Credit
    Administration shall transmit a copy thereof to the Secretary of
    the Senate and the Clerk of the House of Representatives. Except as
    provided in paragraph (2), the regulation shall not become
    effective if, within ninety calendar days of continuous session of
    Congress after the date of promulgation, both Houses of Congress
    adopt a concurrent resolution, the matter after the resolving
    clause of which is as follows: ''That Congress disapproves the
    regulations promulgated by the Farm Credit Administration dealing
    with the matter of , which regulation was transmitted to Congress
    on '', the blank spaces therein being appropriately filled.
      (2) If at the end of sixty calendar days of continuous session of
    Congress after the date of promulgation of a regulation, no
    committee of either House of Congress has reported or been
    discharged from further consideration of a concurrent resolution
    disapproving the regulation, and neither House has adopted such a
    resolution, the regulation may go into effect immediately.  If,
    within such sixty calendar days, such a committee has reported or
    been discharged from further consideration of such a resolution, or
    either House has adopted such a resolution, the regulation may go
    into effect not sooner than ninety calendar days of continuous
    session of Congress after its promulgation unless disapproved as
    provided in paragraph (1).
      (3) For the purposes of paragraphs (1) and (2) of this subsection
    -
        (i) continuity of session is broken only by an adjournment of
      Congress sine die; and
        (ii) the days on which either House is not in session because
      of an adjournment of more than three days to a day certain are
      excluded in the computation of sixty and ninety calendar days of
      continuous session of Congress.
      (4) Congressional inaction on or rejection of a resolution of
    disapproval shall not be deemed an expression of approval of such
    regulation.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.17, formerly Sec. 5.18, Dec. 10,
    1971, 85 Stat. 621; Pub. L. 96-592, title V, Sec. 507, 508, Dec.
    24, 1980, 94 Stat. 3449; renumbered Sec. 5.17 and amended Pub. L.
    99-205, title II, Sec. 201(7), Dec. 23, 1985, 99 Stat. 1691; Pub.
    L. 99-509, title I, Sec. 1036, Oct. 21, 1986, 100 Stat. 1878; Pub.
    L. 100-233, title II, Sec. 207(a)(2), title IV, Sec. 417, formerly
    Sec. 414, Sec. 418(d), formerly Sec. 415(d), Sec. 424(a), 431(e),
    title VIII, Sec. 802(v), 805(z), Jan. 6, 1988, 101 Stat. 1607,
    1653, 1656, 1660, 1713, 1717, renumbered Sec. 417, 418(d), Pub. L.
    100-399, title IV, Sec. 409(a), Aug. 17, 1988, 102 Stat. 1003; Pub.
    L. 100-399, title II, Sec. 205, title IV, Sec. 409(e), title IX,
    Sec. 901(m), (n), Aug. 17, 1988, 102 Stat. 993, 1003, 1008; Pub. L.
    101-624, title XVIII, Sec. 1843(a)(1), Nov. 28, 1990, 104 Stat.
    3836; Pub. L. 102-237, title V, Sec. 502(h), Dec. 13, 1991, 105
    Stat. 1869; Pub. L. 102-552, title IV, Sec. 401(c), title V, Sec.
    511, Oct. 28, 1992, 106 Stat. 4128, 4132; Pub. L. 104-105, title
    II, Sec. 210, 211, Feb. 10, 1996, 110 Stat. 174.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 5.17 of Pub. L. 92-181 was renumbered section
    5.16 and is classified to section 2251 of this title.
                                 AMENDMENTS
      1996 - Subsec. (a)(2)(A). Pub. L. 104-105, Sec. 210, struck out
    ''or management agreements'' after ''consolidations of boards of
    directors'' in first sentence.
      Subsec. (a)(8). Pub. L. 104-105, Sec. 211, inserted ''the
    requirements of the Farm Credit Administration governing the
    dissemination to stockholders of quarterly reports of System
    institutions may not be more burdensome or costly than the
    requirements applicable to national banks, and'' after ''except
    that''.
      1992 - Subsec. (a)(2). Pub. L. 102-552, Sec. 401(c), designated
    existing provisions as subpar. (A) and added subpars. (B) and (C).
      Subsec. (a)(13), (14). Pub. L. 102-552, Sec. 511, added pars.
    (13) and (14).
      1991 - Subsec. (a)(8)(B)(ii). Pub. L. 102-237 struck out second
    period at end.
      1990 - Subsec. (a)(13). Pub. L. 101-624 struck out par. (13)
    which read as follows: ''Except for associations, approve the
    salary scale for employees of the institutions of the System, and
    approve the compensation of the chief executive officer of such
    institutions: Provided, That no salary scale or rate of
    compensation shall be approved under this provision unless
    determined by the Board to be fair and reasonable.  The Board may
    not delegate its responsibilities under this paragraph.''
      1988 - Subsec. (a)(1). Pub. L. 100-399, Sec. 901(m)(1),
    substituted ''district banks'' for ''district boards''.
      Subsec. (a)(2). Pub. L. 100-399, Sec. 901(m)(2), substituted
    ''district bank boards'' for ''boards of the districts''.
      Pub. L. 100-399, Sec. 409(e), substituted ''approve the
    consolidation or division of the territories of institutions when
    agreed to'' for ''the consolidation or division of the territories
    that they serve when agreed to''.
      Pub. L. 100-233, Sec. 802(v)(1)(A), substituted ''approve
    amendments to'' for ''amend or modify''.
      Pub. L. 100-233, Sec. 415(d), substituted ''section 2279a of this
    title'' for ''section 2181 of this title'' and ''approve mergers
    and any related activities as provided for in subchapter VII of
    this chapter; and'' for ''; approve mergers of banks operating
    under the same subchapter of this chapter, merger of Federal land
    bank associations, merger of production credit associations, and''.
      Pub. L. 100-233, Sec. 414, substituted ''. The Farm Credit
    Administration Board shall ensure that disapproving associations
    (A) shall not be charged any assessment under this chapter at a
    rate higher than that charged other like associations in the
    district, and (B) shall be provided with financial services and
    assistance on the same basis as other like associations in the
    district'' for ''; and the Farm Credit Administration shall ensure
    that the board of directors of district banks does not discriminate
    against the disapproving associations in exercising its supervisory
    authorities.  Such associations shall not be (i) charged any
    assessment under this chapter at a rate higher than that charged
    other like associations in the district or (ii) discriminated
    against in the provision of any financial service and assistance''.
      Pub. L. 100-233, Sec. 431(e)(1), substituted ''The Farm Credit
    Administration Board, after consultation with the respective boards
    of directors of the affected banks, may require two or more banks
    operating under the same or different titles to merge if the Board
    determines that one of such banks has failed to meet its
    outstanding obligations'' for ''The Chairman of the Farm Credit
    Administration Board, after consultation with the respective
    district board or boards and the board of directors of the Capital
    Corporation may require two or more banks of the Farm Credit System
    (other than Central Banks for Cooperatives) operating under the
    same subchapter to merge if the Chairman determines that one of
    such banks has failed to meet outstanding obligations of such
    bank.''
      Subsec. (a)(3). Pub. L. 100-399, Sec. 901(m)(3), substituted
    ''Farm Credit Banks under section 2207(b) of this title'' for
    ''Federal land banks and Federal intermediate credit banks under
    section 2207(b) of this title''.
      Subsec. (a)(5). Pub. L. 100-233, Sec. 802(v)(1)(B), struck out
    ''that meet standards and criteria established by the Farm Credit
    Administration, including standards and criteria with respect to
    (A) interest rates on obligations of Farm Credit System
    institutions, and (B) the payment of dividends or patronage refunds
    by Farm Credit System institutions'' after ''Farm Credit
    institutions''.
      Subsec. (a)(8). Pub. L. 100-399, Sec. 205, redesignated par. (9)
    as (8).
      Pub. L. 100-233, Sec. 207(a)(2), struck out par. (8) which read
    as follows: ''Make investments in stock of the Capital Corporation
    out of the revolving fund referred to in section 2151 of this
    title, and require the retirement of such stock.''
      Subsec. (a)(9). Pub. L. 100-399, Sec. 205, redesignated par. (10)
    as (9). Former par. (9) redesignated (8).
      Pub. L. 100-233, Sec. 424(a), inserted provisions limiting Farm
    Credit Administration from requiring System institutions to
    disclose in reports to stockholders certain information concerning
    condition or classification of loans to certain directors or
    members of immediate family of certain directors.
      Subsec. (a)(10) to (12). Pub. L. 100-399, Sec. 205, redesignated
    pars. (11) to (13) as (10) to (12), respectively.  Former par. (10)
    redesignated (9).
      Subsec. (a)(13). Pub. L. 100-399, Sec. 205, redesignated par.
    (14) as (13). Former par. (13) redesignated (12).
      Pub. L. 100-233, Sec. 805(z), redesignated par. (14) as (13), and
    struck out former par. (13) which read as follows: ''Sue and be
    sued, complain and defend in any court of law or equity, State or
    Federal. All suits of a civil nature at common law or in equity to
    which the Farm Credit Administration shall be a party shall be
    deemed to arise under the laws of the United States, and the United
    States district courts shall have original jurisdiction thereof,
    without regard to the amount of the controversy; and the Farm
    Credit Administration may, without bond or security, remove any
    such action, suit, or proceeding from a State court to the United
    States district court for the district or division embracing the
    place where the same is pending by following any procedure for
    removal now or hereafter in effect.  Service of process on the Farm
    Credit Administration shall be in accordance with provisions of
    title 28 and rules adopted under title 28 for suits in which an
    agency of the United States is a party.  The Farm Credit
    Administration shall designate an agent at its principal office to
    accept service of process.''
      Subsec. (a)(14). Pub. L. 100-399, Sec. 205, redesignated par.
    (14) as (13).
      Pub. L. 100-233, Sec. 431(e)(2), 805(z), redesignated par. (15)
    as (14) and inserted ''by the Board'' and ''The Board may not
    delegate its responsibilities under this paragraph.'' Former
    subsec. (14) redesignated (13).
      Subsec. (a)(15). Pub. L. 100-233, Sec. 805(z), redesignated par.
    (15) as (14).
      Subsecs. (b), (c). Pub. L. 100-233, Sec. 802(v)(2), added subsec.
    (b) and redesignated former subsec. (b) as (c). Former subsec. (c)
    redesignated (d).
      Subsec. (d). Pub. L. 100-233, Sec. 802(v)(2), redesignated
    subsec. (c) as (d).
      Subsec. (d)(1). Pub. L. 100-399, Sec. 901(n)(1), made technical
    amendment to reference to sections 2015(b) and 2128(b) of this
    title involving underlying provisions of original act and requiring
    no change in text.
      Pub. L. 100-399, Sec. 901(n), substituted ''section 2015(b) of
    this title'' for ''section 2074 of this title''.
      1986 - Subsec. (a)(5)(A). Pub. L. 99-509 struck out ''and on
    loans made or discounted by such institutions'' after ''Farm Credit
    System institutions''.
      1985 - Subsec. (a). Pub. L. 99-205 amended subsec. (a) generally,
    revising and reorganizing the enumerated powers of the Farm Credit
    Administration by substituting pars. (1) to (15) for former pars.
    (1) to (17).
      1980 - Pub. L. 96-592 designated existing provisions as subsec.
    (a), in par. (3) inserted provisions relating to summary and
    analysis of reports, and added subsecs. (b) and (c).
                      EFFECTIVE DATE OF 1991 AMENDMENT
      Amendment by Pub. L. 102-237 effective as if included in the
    provision of the Food, Agriculture, Conservation, and Trade Act of
    1990, Pub. L. 101-624, to which the amendment relates, see section
    1101(b)(4) of Pub. L. 102-237, set out as a note under section 1421
    of Title 7, Agriculture.
                     EFFECTIVE DATE OF 1988 AMENDMENTS
      Amendment by sections 205 and 409(a), (e) of Pub. L. 100-399
    effective as if enacted immediately after enactment of Pub. L.
    100-233, which was approved Jan. 6, 1988, and amendment by section
    901(m), (n) of Pub. L. 100-399 effective immediately after
    amendment made by section 401 of Pub. L. 100-233, which was
    effective 6 months after Jan. 6, 1988, see section 1001 of Pub. L.
    100-399, set out as a note under section 2002 of this title.
      Amendment by section 207(a)(2) of Pub. L. 100-233 effective 15
    days after Jan. 6, 1988, see section 207(b) of Pub. L. 100-233 set
    out as an Effective Date of Repeal note under section 2152 of this
    title.
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
                                REGULATIONS
      Section 424(b) of Pub. L. 100-233 provided that: ''Within 30 days
    after the date of the enactment of this Act (Jan. 6, 1988), the
    Farm Credit Administration shall amend its regulations as necessary
    to implement the amendment made by subsection (a) (amending this
    section).''
                             REGULATORY REVIEW
      Section 212 of Pub. L. 104-105 provided that:
      ''(a) Findings. - Congress finds that -
        ''(1) the Farm Credit Administration, in the role of the
      Administration as an arms-length safety and soundness regulator,
      has made considerable progress in reducing the regulatory burden
      on Farm Credit System institutions;
        ''(2) the efforts of the Farm Credit Administration described
      in paragraph (1) have resulted in cost savings for Farm Credit
      System institutions; and
        ''(3) the cost savings described in paragraph (2) ultimately
      benefit the farmers, ranchers, agricultural cooperatives, and
      rural residents of the United States.
      ''(b) Continuation of Regulatory Review. - The Farm Credit
    Administration shall continue the comprehensive review of
    regulations governing the Farm Credit System to identify and
    eliminate, consistent with law, safety, and soundness, all
    regulations that are unnecessary, unduly burdensome or costly, or
    not based on law.''
         FORBEARANCE AND RESTRUCTURING FOR FARM LOANS; FARM CREDIT
                               ADMINISTRATION
      Pub. L. 100-387, title III, Sec. 313(b), Aug. 11, 1988, 102 Stat.
    950, provided that: ''It further is the sense of Congress that the
    Farm Credit Administration should in its oversight of Farm Credit
    System institutions, with respect to farmers and ranchers who
    suffer major losses due to drought, hail, excessive moisture, or
    related condition in 1988 -
        ''(1) ensure that Farm Credit System institutions exercise
      forbearance in the collection of principal and interest on loans
      outstanding to such farmers and ranchers;
        ''(2) expedite the use of credit restructuring and other credit
      relief mechanisms authorized under the Agricultural Credit Act of
      1987 (Pub. L. 100-233, Jan. 6, 1988, 101 Stat. 1568, see Tables
      for classification) and related provisions of law for such
      farmers and ranchers; and
        ''(3) encourage other lenders participating with Farm Credit
      System institutions in mutual loan agreements to exercise
      forbearance before declaring loans to such farmers and ranchers
      in default.''
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2002, 2275a, 2279aa-11 of
    this title.
 
-CITE-
    12 USC Sec. 2253                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part B - Farm Credit Administration Organization
 
-HEAD-
    Sec. 2253. Prior delegations
 
-STATUTE-
      Any delegations by the Farm Credit Administration and
    redelegations thereof made in accordance with section 5.19 of the
    Farm Credit Act of 1971 as in effect prior to the effective date of
    the Farm Credit Amendments Act of 1985 may continue in full force
    and effect, at the discretion of the Farm Credit Administration,
    for the period ending twelve months after December 23, 1985.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.18, as added Pub. L. 99-205, title
    II, Sec. 202(b), Dec. 23, 1985, 99 Stat. 1693.)
 
-REFTEXT-
                             REFERENCES IN TEXT
      Section 5.19 of the Farm Credit Act of 1971 as in effect prior to
    the effective date of the Farm Credit Amendments Act of 1985,
    referred to in text, is section 5.19 of Pub. L. 92-181 which was
    classified to this section prior to its repeal by section 202(a) of
    Pub. L. 99-205, known as the Farm Credit Amendments Act of 1985.
    See Prior Provisions and Effective Date notes below.
 
-MISC2-
                              PRIOR PROVISIONS
      A prior section 2253, Pub. L. 92-181, title V, Sec. 5.19, Dec.
    10, 1971, 85 Stat. 622, related to delegation of duties and powers
    to financial institutions, prior to repeal, effective thirty days
    after Dec. 23, 1985, by Pub. L. 99-205, title II, Sec. 202(a), Dec.
    23, 1985, 99 Stat. 1693.
       A prior section 5.18 of Pub. L. 92-181 was renumbered section
    5.17 and is classified to section 2252 of this title.
                               EFFECTIVE DATE
      Section effective thirty days after Dec. 23, 1985, see section
    401 of Pub. L. 99-205, set out as an Effective Date of 1985
    Amendment note under section 2001 of this title.
 
-CITE-
    12 USC Sec. 2254                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part B - Farm Credit Administration Organization
 
-HEAD-
    Sec. 2254. Examinations
 
-STATUTE-
    (a) Scope and frequency of examinations; power, authority, and
        liability of examiners
      Except for Federal land bank associations, each institution of
    the System shall be examined by Farm Credit Administration
    examiners at such times as the Board may determine, but in no event
    less than once during each 18-month period.  Each Federal land bank
    association shall be examined by Farm Credit Administration
    examiners at such times as the Farm Credit Administration Board may
    determine, except that each such association shall be examined at
    least once every three years.  Such examinations may include, if
    appropriate, but are not limited to, an analysis of credit and
    collateral quality and capitalization of the institution, and
    appraisals of the effectiveness of the institution's management and
    application of policies governing the carrying out of this chapter
    and regulations of the Farm Credit Administration and servicing all
    eligible borrowers.  Examination of banks shall include an analysis
    of the compensation paid to the chief executive officer and the
    salary scales of the employees of the bank.  At the direction of
    the Board, Farm Credit Administration examiners also shall make
    examinations of the condition of any organization, other than
    federally regulated financial institutions, to, for, or with which
    any institution of the System contemplates making a loan or
    discounting paper.  For the purposes of this chapter, examiners of
    the Farm Credit Administration shall be subject to the same
    requirements, responsibilities, and penalties as are applicable to
    examiners under the National Bank Act (12 U.S.C. 21 et seq.), the
    Federal Reserve Act (12 U.S.C. 221 et seq.), and Federal Deposit
    Insurance Act (12 U.S.C. 1811 et seq.), and other provisions of law
    and shall have the same powers and privileges as are vested in such
    examiners by law.
    (b) Annual report of condition
      (1) Each institution of the System shall make and publish an
    annual report of condition as prescribed by the Farm Credit
    Administration. Each such report shall contain financial statements
    prepared in accordance with generally accepted accounting
    principles, except with respect to any actions taken by any banks
    of the System under section 2159(b) of this title, and contain such
    additional information as the Farm Credit Administration by
    regulation may require.  Notwithstanding the provisions of the
    preceding sentence and any other provision of this chapter, for the
    period July 1, 1986, through December 31, 1988, the institutions of
    the Farm Credit System may, on the prior approval of the Farm
    Credit Administration and subject to such conditions as it may
    establish, capitalize annually their provision for losses that is
    in excess of one-half of 1 percent of loans outstanding and
    amortize such capitalized amounts over a period not to exceed 20
    years.  Such financial statements of System institutions shall be
    audited by an independent public accountant.
      (2) In accordance with the regulations of the Farm Credit
    Administration, for the period ending December 31, 1992, System
    institutions are authorized to use the authorities contained in the
    third sentence of paragraph (1) except as otherwise provided in
    section 2278a-6 of this title.
      (3) Any preferred stock issued under section 2278b-7 of this
    title shall be subordinated to, and impaired before, other stock or
    equities of the institution.
    (c) Report of examination of noncomplying institution; publication;
        notice of intention
      The Farm Credit Administration may publish the report of
    examination of any System institution that does not, before the end
    of the 120th day after the date of notification of the
    recommendations and suggestions of the Farm Credit Administration,
    based on such examination, comply with such recommendations and
    suggestions to the satisfaction of the Farm Credit Administration.
    The Farm Credit Administration shall give notice of intention to
    publish in the event of such noncompliance at least 90 days before
    such publication.  Such notice of intention may be given any time
    after such notification of recommendations and suggestions.
    (d) Duties of Farm Credit Administration
      On receipt of a request made under section 2277a-8(b)(1)(B) of
    this title with respect to a System institution, the Farm Credit
    Administration shall -
        (1) furnish for the confidential use of the Farm Credit System
      Insurance Corporation reports of examination of the institution
      and other reports or information on the institution; and
        (2)(A) examine, or obtain other information on, the institution
      and furnish for the confidential use of the Farm Credit System
      Insurance Corporation the report of the examination and such
      other information; or
        (B) if the Farm Credit Administration Board determines that
      compliance with the request would substantially impair the
      ability of the Farm Credit Administration to carry out the other
      duties and responsibilities of the Farm Credit Administration
      under this chapter, notify the Board of Directors of the Farm
      Credit System Insurance Corporation that the Farm Credit
      Administration will be unable to comply with the request.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.19, formerly Sec. 5.20, Dec. 10,
    1971, 85 Stat. 623; renumbered Sec. 5.19 and amended Pub. L.
    99-205, title II, Sec. 203(a), Dec. 23, 1985, 99 Stat. 1693; Pub.
    L. 99-509, title I, Sec. 1037, Oct. 21, 1986, 100 Stat. 1878; Pub.
    L. 100-233, title II, Sec. 205(b), title IV, Sec. 432(b), Jan. 6,
    1988, 101 Stat. 1607, 1661; Pub. L. 100-399, title II, Sec. 204,
    title IV, Sec. 416(c), Aug. 17, 1988, 102 Stat. 993, 1004; Pub. L.
    101-624, title XVIII, Sec. 1843(b), Nov. 28, 1990, 104 Stat. 3836;
    Pub. L. 102-552, title V, Sec. 512, 513(b), Oct. 28, 1992, 106
    Stat. 4133, 4134; Pub. L. 104-105, title II, Sec. 213, Feb. 10,
    1996, 110 Stat. 175.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 5.19 of Pub. L. 92-181 was classified to section
    2253 of this title prior to repeal by Pub. L. 99-205, title II,
    Sec. 202(a), Dec. 23, 1985, 99 Stat. 1693.
 
-REFTEXT-
                             REFERENCES IN TEXT
      The National Bank Act, referred to in subsec. (a), is act June 3,
    1864, ch. 106, 13 Stat. 99, as amended, which is classified
    principally to chapter 2 (Sec. 21 et seq.) of this title.  For
    complete classification of this Act to the Code, see References in
    Text note set out under section 38 of this title.
      The Federal Reserve Act, referred to in subsec. (a), is act Dec.
    23, 1913, ch. 6, 38 Stat. 251, as amended, which is classified
    principally to chapter 3 (Sec. 221 et seq.) of this title.  For
    complete classification of this Act to the Code, see References in
    Text note set out under section 226 of this title and Tables.
      The Federal Deposit Insurance Act, referred to in subsec. (a), is
    act Sept. 21, 1950, ch. 967, Sec. 2, 64 Stat. 873, as amended,
    which is classified generally to chapter 16 (Sec. 1811 et seq.) of
    this title.  For complete classification of this Act to the Code,
    see Short Title note set out under section 1811 of this title and
    Tables.
 
-MISC2-
                                 AMENDMENTS
      1996 - Subsec. (a). Pub. L. 104-105 substituted ''during each
    18-month period'' for ''each year'' in first sentence.
      1992 - Subsec. (a). Pub. L. 102-552, Sec. 512, substituted ''may
    include, if appropriate'' for ''shall include'' in third sentence.
      Subsec. (d). Pub. L. 102-552, Sec. 513(b), added subsec. (d).
      1990 - Subsec. (a). Pub. L. 101-624 inserted after third sentence
    ''Examination of banks shall include an analysis of the
    compensation paid to the chief executive officer and the salary
    scales of the employees of the bank.''
      1988 - Subsec. (a). Pub. L. 100-399, Sec. 416(c), substituted
    ''at least once every three years'' for ''at least once every 5
    years''.
      Pub. L. 100-233, Sec. 432(b), substituted ''Except for Federal
    land bank associations, each'' for ''Each'', substituted ''the
    Board'' for ''the Chairman of the Board'' in two places, and
    inserted after first sentence ''Each Federal land bank association
    shall be examined by Farm Credit Administration examiners at such
    times as the Farm Credit Administration Board may determine, except
    that each such association shall be examined at least once every 5
    years.''
      Subsec. (b). Pub. L. 100-233, Sec. 205(b), designated existing
    provisions as par. (1) and added pars. (2) and (3).
      Subsec. (b)(2). Pub. L. 100-399, Sec. 204, substituted ''the
    third sentence of paragraph (1)'' for ''this section''.
      1986 - Subsec. (b). Pub. L. 99-509 substituted second and third
    sentences for former second sentence which read as follows: ''Each
    such report shall contain financial statements prepared in
    accordance with generally accepted accounting principles and
    contain such additional information as the Farm Credit
    Administration by regulation may require.''
      1985 - Pub. L. 99-205 in amending section generally, revised and
    restated existing provisions in subsec. (a) and added subsecs. (b)
    and (c). Prior to amendment, section read as follows: ''Except as
    provided herein, each institution of the System, and each of their
    agents, at such times as the Governor of the Farm Credit
    Administration may determine, shall be examined and audited by farm
    credit examiners under the direction of an independent chief Farm
    Credit Administration examiner, but each bank and each production
    credit association shall be examined and audited not less
    frequently than once each year.  Such examinations shall include
    objective appraisals of the effectiveness of management and
    application of policies in carrying out the provisions of this
    chapter and in servicing all eligible borrowers.  If the Governor
    determines it to be necessary or appropriate, the required
    examinations and audits may be made by independent certified public
    accountants, certified by a regulatory authority of a State, and in
    accordance with generally accepted auditing standards.  Upon
    request of the Governor or any bank of the System, farm credit
    examiners shall also make examinations and written reports of the
    condition of any organization, other than national banks, to which,
    or with which, any institution of the System contemplates making a
    loan or discounting paper of such organization.  For the purposes
    of this chapter, examiners of the Farm Credit Administration shall
    be subject to the same requirements, responsibilities, and
    penalties as are applicable to examiners under the National Bank
    Act (12 U.S.C. 21 et seq.), the Federal Reserve Act (12 U.S.C. 221
    et seq.), the Federal Deposit Insurance Act (12 U.S.C. 1811 et
    seq.), and other provisions of law and shall have the same powers
    and privileges as are vested in such examiners by law.''
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
                      EFFECTIVE DATE OF 1985 AMENDMENT
      Amendment by Pub. L. 99-205 effective thirty days after Dec. 23,
    1985, see section 401 of Pub. L. 99-205, set out as a note under
    section 2001 of this title.
        RESTRAINT BY FEDERAL BANK REGULATORY AGENCIES IN OVERSEEING
                           AGRICULTURAL BORROWERS
      Pub. L. 99-198, title XIII, Sec. 1326, Dec. 23, 1985, 99 Stat.
    1540, provided that:
      ''(a) Congress finds and declares that -
        ''(1) high production costs and low commodity prices have
      combined to reduce farm income to the lowest levels since the
      depths of the Depression in the 1930's, to subject many
      agricultural producers, through no fault of their own, to severe
      economic hardship, and in many cases temporarily but seriously to
      impair producers' ability to meet loan repayment schedules in a
      timely fashion; and
        ''(2) a policy of adverse classification of agricultural loans
      by bank examiners under these circumstances will trigger a wave
      of foreclosures and similar actions on the part of banks, thereby
      depressing land values and prices for agricultural facilities and
      equipment and having a devastating effect on farmers and the
      banking industry, and upon rural areas of the United States in
      general.
      ''(b) It is therefore the sense of Congress that the Federal bank
    regulatory agencies should ensure, in their examination procedures,
    that examiners exercise caution and restraint and give due
    consideration not only to the current cash flow of agricultural
    borrowers under financial stress, but to factors such as their loan
    collateral and ultimate ability to repay as well, for so long as
    the adverse economic effects of the cost-price squeeze of recent
    years continue to impair the ability of these borrowers to meet
    scheduled repayments on their loans.''
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2001, 2252, 2278a-6 of
    this title.
 
-CITE-
    12 USC Sec. 2255                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part B - Farm Credit Administration Organization
 
-HEAD-
    Sec. 2255. Conditions of other banks and lending institutions
 
-STATUTE-
      The Comptroller of the Currency is authorized and directed, upon
    request of the Farm Credit Administration to furnish for
    confidential use of an institution of the System such reports,
    records, and other information as he may have available relating to
    the financial condition of national banks through, for, or with
    which such institution of the System has made or contemplates
    making discounts or loans and to make such further examination, as
    may be agreed, of organizations through, for, or with which such
    institution of the Farm Credit System has made or contemplates
    making discounts or loans.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.20, formerly Sec. 5.21, Dec. 10,
    1971, 85 Stat. 623; renumbered Sec. 5.20, Pub. L. 99-205, title II,
    Sec. 203(b), Dec. 23, 1985, 99 Stat. 1694.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 5.20 of Pub. L. 92-181 was renumbered section
    5.19 and is classified to section 2254 of this title.
 
-CITE-
    12 USC Sec. 2256                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part B - Farm Credit Administration Organization
 
-HEAD-
    Sec. 2256. Consent to the availability of reports and to
        examinations
 
-STATUTE-
      Any organization other than State banks, trust companies, and
    savings associations shall, as a condition precedent to securing
    discount privileges with a bank of the Farm Credit System, file
    with such bank its written consent to examination by farm credit
    examiners as may be directed by the Farm Credit Administration; and
    State banks, trust companies, and savings associations may be
    required in like manner to file a written consent that reports of
    their examination by constituted State authorities may be furnished
    by such authorities upon the request of the Farm Credit
    Administration.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.21, formerly Sec. 5.22, Dec. 10,
    1971, 85 Stat. 623; renumbered Sec. 5.21, Pub. L. 99-205, title II,
    Sec. 203(b), Dec. 23, 1985, 99 Stat. 1694.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 5.21 of Pub. L. 92-181 was renumbered section
    5.20 and is classified to section 2255 of this title.
 
-CITE-
    12 USC Sec. 2257                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part B - Farm Credit Administration Organization
 
-HEAD-
    Sec. 2257. Reports on conditions of institutions receiving loans or
        deposits
 
-STATUTE-
      The executive departments, boards, commissions, and independent
    establishments of the Government of the United States, the Federal
    Deposit Insurance Corporation, the Comptroller of the Currency, the
    Board of Governors of the Federal Reserve System, and the Federal
    Reserve banks are severally authorized under such conditions as
    they may prescribe, upon request of the Farm Credit Administration,
    to make available to it or to any institution of the System in
    confidence all reports, records, or other information relating to
    the condition of any organization to which such institution of the
    System has made or contemplates making loan or for which it has or
    contemplates discounting paper, or which it is using or
    contemplates using as a custodian of securities or other credit
    instruments, or a depository.  The Federal Reserve banks in their
    capacity as depositories, agents, and custodians for bonds,
    debentures, and other obligations issued by the banks of the System
    or book entries thereof are also authorized and directed, upon
    request of the Farm Credit Administration, to make available for
    audit by farm credit examiners all appropriate books, accounts,
    financial records, files, and other papers.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.22, formerly Sec. 5.23, Dec. 10,
    1971, 85 Stat. 624; renumbered Sec. 5.22, Pub. L. 99-205, title II,
    Sec. 203(b), Dec. 23, 1985, 99 Stat. 1694.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 5.22 of Pub. L. 92-181 was renumbered section
    5.21 and is classified to section 2256 of this title.
 
-CITE-
    12 USC Sec. 2257a                                            01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part B - Farm Credit Administration Organization
 
-HEAD-
    Sec. 2257a. Uniform financial reporting instructions
 
-STATUTE-
    (a) In general
      Each System institution shall comply with uniform financial
    reporting instructions required by the Farm Credit Administration,
    to standardize and facilitate the reporting of System data.
    (b) Computerized system
      If the financial reports are maintained by a computer system,
    each System institution may develop an internal computer system or
    it may contract out to a vendor under open competitive bidding any
    or all aspects of the computerized system.
    (c) Submission of proposal
      Within 6 months of January 6, 1988, each System institution shall
    submit to the Farm Credit Administration a report on the plan of
    that institution to bring the operations of the institution into
    compliance with the uniform financial reporting instructions
    required by the Farm Credit Administration.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.22A, as added Pub. L. 100-233,
    title IV, Sec. 429, Jan. 6, 1988, 101 Stat. 1658.)
 
-CITE-
    12 USC Sec. 2258                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part B - Farm Credit Administration Organization
 
-HEAD-
    Sec. 2258. Jurisdiction
 
-STATUTE-
      Each institution of the System shall for the purposes of
    jurisdiction be deemed to be a citizen of the State, commonwealth,
    or District of Columbia in which its principal office is located.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.23, formerly Sec. 5.24, Dec. 10,
    1971, 85 Stat. 624; Pub. L. 94-184, Sec. 1(b), Dec. 31, 1975, 89
    Stat. 1060; renumbered Sec. 5.23, Pub. L. 99-205, title II, Sec.
    203(b), Dec. 23, 1985, 99 Stat. 1694.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 5.23 of Pub. L. 92-181 was renumbered section
    5.22 and is classified to section 2257 of this title.
                                 AMENDMENTS
      1975 - Pub. L. 94-184 struck out provisions prohibiting district
    court jurisdiction on the basis of incorporation under this Act or
    prior Federal law, and prohibiting jurisdiction except in cases by
    or against the United States or one of its officers, or against a
    person over whom State courts have no jurisdiction and except in
    cases by or against a receiver or conservator appointed under this
    chapter.
 
-CITE-
    12 USC Sec. 2259                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part B - Farm Credit Administration Organization
 
-HEAD-
    Sec. 2259. State legislation
 
-STATUTE-
      Whenever it is determined by the Farm Credit Administration, or
    by judicial decision, that a State law is applicable to the
    obligations and securities authorized to be held by the
    institutions of the System under this chapter, which law would
    provide insufficient protection or inadequate safeguards against
    loss in the event of default, the Farm Credit Administration may
    declare such obligations or securities to be ineligible as
    collateral for the issuance of new notes, bonds, debentures, and
    other obligations under this chapter.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.24, formerly Sec. 5.25, Dec. 10,
    1971, 85 Stat. 624; renumbered Sec. 5.24, Pub. L. 99-205, title II,
    Sec. 203(b), Dec. 23, 1985, 99 Stat. 1694.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 5.24 of Pub. L. 92-181 was renumbered section
    5.23 and is classified to section 2258 of this title.
 
-CITE-
    12 USC Sec. 2260                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part B - Farm Credit Administration Organization
 
-HEAD-
    Sec. 2260. Transferred
 
-COD-
                                CODIFICATION
      Section, Pub. L. 92-181, title V, Sec. 5.30, as added Pub. L.
    96-592, title V, Sec. 509, Dec. 24, 1980, 94 Stat. 3450, which
    related to audit and report to Congress by the Comptroller General,
    was renumbered section 5.44 of Pub. L. 92-181 by, Pub. L. 99-205,
    title II, Sec. 205(a)(2), Dec. 23, 1985, 99 Stat. 1703, and was
    transferred to section 2275 of this title.
 
-CITE-
    12 USC Part C - Enforcement Powers of Farm Credit
                  Administration                                 01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part C - Enforcement Powers of Farm Credit Administration
    .
 
-HEAD-
    Part C - Enforcement Powers of Farm Credit Administration
 
-SECREF-
                     PART REFERRED TO IN OTHER SECTIONS
      This part is referred to in sections 2252, 2279aa-11, 4909 of
    this title.
 
-CITE-
    12 USC Sec. 2261                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part C - Enforcement Powers of Farm Credit Administration
 
-HEAD-
    Sec. 2261. Cease and desist proceedings
 
-STATUTE-
      (a) If, in the opinion of the Farm Credit Administration, any
    institution in the Farm Credit System, or any director, officer,
    employee, agent, or other person participating in the conduct of
    the affairs of such an institution is engaging or has engaged, or
    the Farm Credit Administration has reasonable cause to believe that
    the institution or any director, officer, employee, agent, or other
    person participating in the conduct of the affairs of such
    institution is about to engage, in an unsafe or unsound practice in
    conducting the business of such institution, or is violating or has
    violated, or the Farm Credit Administration has reasonable cause to
    believe that the institution or any director, officer, employee,
    agent, or other person participating in the conduct of the affairs
    of such institution is about to violate, a law, rule, or
    regulation, or any condition imposed in writing by the Farm Credit
    Administration in connection with the granting of any application
    or other request by the institution or any written agreement
    entered into with the Farm Credit Administration, the Farm Credit
    Administration may issue and serve upon the institution or such
    director, officer, employee, agent, or other person a notice of
    charges in respect thereof.  The notice shall contain a statement
    of the facts constituting the alleged violation or violations or
    the unsafe or unsound practice or practices, and shall fix a time
    and place at which a hearing will be held to determine whether an
    order to cease and desist therefrom should issue against the
    institution or the director, officer, employee, agent, or other
    person participating in the conduct of the affairs of such
    institution.  Such hearing shall be fixed for a date not earlier
    than thirty days nor later than sixty days after service of such
    notice unless an earlier or a later date is set by the Farm Credit
    Administration at the request of any party so served.  Unless the
    party or parties so served shall appear at the hearing personally
    or by a duly authorized representative, they shall be deemed to
    have consented to the issuance of the cease and desist order.  In
    the event of such consent, or if upon the record made at any such
    hearing, the Farm Credit Administration shall find that any
    violation or unsafe or unsound practice specified in the notice of
    charges has been established, the Farm Credit Administration may
    issue and serve upon the institution or the director, officer,
    employee, agent, or other person participating in the conduct of
    the affairs of such institution an order to cease and desist from
    any such violation or practice.  Such order may, by provisions that
    may be mandatory or otherwise, require the institution or its
    directors, officers, employees, agents, and other persons
    participating in the conduct of the affairs of such institution to
    cease and desist from the same, and, further, to take affirmative
    action to correct the conditions resulting from any such violation
    or practice.
      (b) A cease and desist order shall become effective at the
    expiration of thirty days after the service of such order upon the
    institution or other person concerned (except in the case of a
    cease and desist order issued upon consent, which shall become
    effective at the time specified therein), and shall remain
    effective and enforceable as provided therein except to such extent
    as it is stayed, modified, terminated, or set aside by action of
    the Farm Credit Administration or a reviewing court.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.25, as added Pub. L. 99-205, title
    II, Sec. 204, Dec. 23, 1985, 99 Stat. 1694.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 5.25 of Pub. L. 92-181 was renumbered section
    5.24 and is classified to section 2259 of this title.
                               EFFECTIVE DATE
      Section effective thirty days after Dec. 23, 1985, see section
    401 of Pub. L. 99-205, set out as an Effective Date of 1985
    Amendment note under section 2001 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2262, 2267, 2268 of this
    title.
 
-CITE-
    12 USC Sec. 2262                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part C - Enforcement Powers of Farm Credit Administration
 
-HEAD-
    Sec. 2262. Temporary cease and desist orders
 
-STATUTE-
      (a) Whenever the Farm Credit Administration shall determine that
    the violation or threatened violation or the unsafe or unsound
    practice or practices, specified in the notice of charges served
    upon the institution or any director, officer, employee, agent, or
    other person participating in the conduct of the affairs of such
    institution under section 2261 of this title, or the continuation
    thereof, is likely to cause insolvency or substantial dissipation
    of assets or earnings of the institution, or is likely to seriously
    weaken the condition of the institution or otherwise seriously
    prejudice the interests of the investors in Farm Credit System
    obligations or shareholders in the institution prior to the
    completion of the proceedings conducted under section 2261 of this
    title, the Farm Credit Administration may issue a temporary order
    requiring the institution or such director, officer, employee,
    agent, or other person to cease and desist from any such violation
    or practice and to take affirmative action to prevent such
    insolvency, dissipation, condition, or prejudice pending completion
    of such proceedings.  Such order shall become effective upon
    service upon the institution or such director, officer, employee,
    agent, or other person participating in the conduct of the affairs
    of such institution and, unless set aside, limited, or suspended by
    a court in proceedings authorized by subsection (b) of this
    section, shall remain effective and enforceable pending the
    completion of the administrative proceedings pursuant to such
    notice and until such time as the Farm Credit Administration shall
    dismiss the charges specified in such notice, or if a cease and
    desist order is issued against the institution or such director,
    officer, employee, agent, or other person, until effective date of
    such order.
      (b) Within ten days after the institution concerned or any
    director, officer, employee, agent, or other person participating
    in the conduct of the affairs of such institution has been served
    with a temporary cease and desist order, the institution or such
    director, officer, employee, agent, or other person may apply to
    the United States district court for the judicial district in which
    the home office of the institution is located, or the United States
    district court for the District of Columbia, for an injunction
    setting aside, limiting, or suspending the enforcement, operation,
    or effectiveness of such order pending the completion of the
    administrative proceedings pursuant to the notice of charges served
    upon the institution or such director, officer, employee, agent, or
    other person under section 2261 of this title, and such court shall
    have jurisdiction to issue such injunction.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.26, as added Pub. L. 99-205, title
    II, Sec. 204, Dec. 23, 1985, 99 Stat. 1695.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 5.26 of Pub. L. 92-181 was renumbered section
    5.40 and is set out in part as notes under section 2001 of this
    title.
                               EFFECTIVE DATE
      Section effective thirty days after Dec. 23, 1985, see section
    401 of Pub. L. 99-205, set out as an Effective Date of 1985
    Amendment note under section 2001 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2263, 2268 of this title.
 
-CITE-
    12 USC Sec. 2263                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part C - Enforcement Powers of Farm Credit Administration
 
-HEAD-
    Sec. 2263. Enforcement of temporary cease and desist orders
 
-STATUTE-
      In the case of violation or threatened violation of, or failure
    to obey, a temporary cease and desist order issued under section
    2262 of this title, the Farm Credit Administration may apply to the
    United States district court, or the United States court of any
    territory, within the jurisdiction of which the home office of the
    institution is located, for an injunction to enforce such order,
    and, if the court shall determine that there has been such
    violation or threatened violation or failure to obey, it shall be
    the duty of the court to issue such injunction.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.27, as added Pub. L. 99-205, title
    II, Sec. 204, Dec. 23, 1985, 99 Stat. 1696.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 5.27 of Pub. L. 92-181, which amended section 393
    of this title and sections 5314 and 5315 of Title 5, Government
    Organization and Employees, was renumbered section 5.41.
                               EFFECTIVE DATE
      Section effective thirty days after Dec. 23, 1985, see section
    401 of Pub. L. 99-205, set out as an Effective Date of 1985
    Amendment note under section 2001 of this title.
 
-CITE-
    12 USC Sec. 2264                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part C - Enforcement Powers of Farm Credit Administration
 
-HEAD-
    Sec. 2264. Suspension or removal of director or officer
 
-STATUTE-
    (a) Written notice of intention to remove; violation of law, rule,
        regulation, or final cease and desist order; unsafe or unsound
        practice; breach of fiduciary duty
      Whenever, in the opinion of the Farm Credit Administration, any
    director or officer of any institution in the Farm Credit System
    has committed any violation of law, rule, or regulation or of a
    cease and desist order that has become final, or has engaged or
    participated in any unsafe or unsound practice in connection with
    the institution, or has committed or engaged in any act, omission,
    or practice which constitutes a breach of a fiduciary duty as such
    director or officer, and the Farm Credit Administration determines
    that the institution has suffered or will probably suffer
    substantial financial loss or other damage or that the interests of
    its shareholders or investors in Farm Credit System obligations
    could be seriously prejudiced by reason of such violation or
    practice or breach of fiduciary duty, or that the director or
    officer has received financial gain by reason of such violation or
    practice or breach of fiduciary duty, and that such violation or
    practice or breach of fiduciary duty is one involving personal
    dishonesty on the part of such director or officer, or one that
    demonstrates a willful or continuing disregard for the safety or
    soundness of the System institution, the Farm Credit Administration
    may serve upon such director or officer a written notice of its
    intention to remove him from office.
    (b) Written notice of intention to remove or suspend director,
        officer or other person; personal dishonesty; willful or
        continuing disregard; unfitness to continue in office or to
        participate in affairs of institution
      Whenever, in the opinion of the Farm Credit Administration, any
    director or officer of an institution in the Farm Credit System, by
    conduct or practice with respect to another institution in the Farm
    Credit System or other business institution that resulted in
    substantial financial loss or other damage, has evidenced either
    his personal dishonesty or a willful or continuing disregard for
    its safety and soundness and, in addition, has evidenced his
    unfitness to continue as a director or officer, and whenever, in
    the opinion of the Farm Credit Administration, any other person
    participating in the conduct of the affairs of an institution in
    the Farm Credit System, by the conduct or practice with respect to
    such institution or other institution in the Farm Credit System or
    other business institution that resulted in substantial financial
    loss or other damage, has evidenced either personal dishonesty or a
    willful or continuing disregard for its safety and soundness and,
    in addition, has evidenced his unfitness to participate in the
    conduct of the affairs of such institution, the Farm Credit
    Administration may serve upon such director, officer, or other
    person a written notice of its intention to remove that director,
    officer, or other person from office or to prohibit his further
    participation in any manner in the conduct of the affairs of the
    institution.
    (c) Suspension from office; prohibition from further participation
        in conduct of affairs of institution; service of notice
      In respect to any director or officer of an institution in the
    Farm Credit System or any other person referred to in subsection
    (a) or (b) of this section, the Farm Credit Administration may, if
    it deems it necessary for the protection of the institution or the
    interests of its shareholders and the investors in the Farm Credit
    System obligations, by written notice to such effect served upon
    such director, officer, or other person, suspend such director,
    officer, or other person from office or prohibit such director,
    officer, or other person from further participation in any manner
    in the conduct of the affairs of the institution.  Such suspension
    or prohibition shall become effective upon service of such notice
    and, unless stayed by a court in proceedings authorized by
    subsection (e) of this section, shall remain in effect pending the
    completion of the administrative proceedings pursuant to the notice
    served under subsection (a) or (b) of this section and until such
    time as the Farm Credit Administration shall dismiss the charges
    specified in such notice, or, if an order of removal or prohibition
    is issued against the director or officer or other person, until
    the effective date of any such order.  Copies of any such notice
    shall also be served upon the institution of which the person is a
    director or officer or in the conduct of whose affairs the person
    has participated.
    (d) Statement of grounds for removal or prohibition; notice and
        hearing; order of suspension, removal or prohibition; service
        of order
      A notice of intention to remove a director, officer, or other
    person from office or to prohibit such director's, officer's, or
    other person's participation in the conduct of the affairs of an
    institution in the Farm Credit System, shall contain a statement of
    the facts constituting grounds therefor, and shall fix a time and
    place at which a hearing will be held thereon.  Such hearing shall
    be fixed for a date not earlier than thirty days nor later than
    sixty days after the date of service of such notice, unless an
    earlier or a later date is set by the Farm Credit Administration at
    the request of (1) such director or officer or other person, and
    for good cause shown, or (2) the Attorney General of the United
    States. Unless such director, officer, or other person shall appear
    at the hearing in person or by a duly authorized representative,
    such director, officer, or other person shall be deemed to have
    consented to the issuance of an order of such removal or
    prohibition.  In the event of such consent, or if upon the record
    made at any such hearing the Farm Credit Administration shall find
    that any of the grounds specified in such notice have been
    established, the Farm Credit Administration may issue such orders
    of suspension or removal from office, or prohibition from
    participation in the conduct of the affairs of the institution, as
    it may deem appropriate.  A copy of an order issued under this
    subsection shall be served upon the institution concerned.  Any
    such order shall become effective at the expiration of thirty days
    after service upon such institution and the director, officer, or
    other person concerned (except in the case of an order issued upon
    consent, which shall become effective at the time specified
    therein).  Such order shall remain effective and enforceable except
    to such extent as it is stayed, modified, terminated, or set aside
    by action of the agency or a reviewing court.
    (e) Stay of suspension or prohibition
      Within ten days after any director, officer, or other person has
    been suspended from office or prohibited from participation in the
    conduct of the affairs of a System institution under subsection (c)
    of this section, such director, officer, or other person may apply
    to the United States district court for the judicial district in
    which the home office of the institution is located, or the United
    States district court for the District of Columbia, for a stay of
    either such suspension or prohibition, or both, pending the
    completion of the administrative proceedings pursuant to the notice
    served upon such director, officer, or other person under
    subsection (a) or (b) of this section, and such court shall have
    jurisdiction to stay either such suspension or prohibition, or
    both.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.28, as added Pub. L. 99-205, title
    II, Sec. 204, Dec. 23, 1985, 99 Stat. 1696; amended Pub. L.
    100-233, title VIII, Sec. 805(aa), Jan. 6, 1988, 101 Stat. 1717;
    Pub. L. 100-399, title VII, Sec. 702(d), Aug. 17, 1988, 102 Stat.
    1006.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 5.28 of Pub. L. 92-181 was renumbered section
    5.42 and is set out as a note under section 2001 of this title.
                                 AMENDMENTS
      1988 - Subsec. (a). Pub. L. 100-233, Sec. 805(aa)(1), designated
    provisions preceding subsec. (b) as subsec. (a).
      Subsec. (e). Pub. L. 100-399 substituted ''subsection (c)'' for
    ''subsection (d)''.
      Pub. L. 100-233, Sec. 805(aa)(2), substituted ''subsection (d) of
    this section'' for ''subsection (d)(3) of this section''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
                               EFFECTIVE DATE
      Section effective thirty days after Dec. 23, 1985, see section
    401 of Pub. L. 99-205, set out as an Effective Date of 1985
    Amendment note under section 2001 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2265, 2269, 2270 of this
    title.
 
-CITE-
    12 USC Sec. 2265                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part C - Enforcement Powers of Farm Credit Administration
 
-HEAD-
    Sec. 2265. Suspension or removal of director or officer charged
        with felony
 
-STATUTE-
      (a) Whenever any director or officer of an institution in the
    Farm Credit System, or other person participating in the conduct of
    the affairs of such institution, is charged in any information,
    indictment, or complaint authorized by a United States attorney,
    with the commission of or participation in a crime involving
    dishonesty or breach of trust that is punishable by imprisonment
    for a term exceeding one year under State or Federal law, the Farm
    Credit Administration may, if continued service or participation by
    the individual may pose a threat to the interests of the
    institution's shareholders or investors in Farm Credit System
    obligations or threaten to impair public confidence in the
    institution or the Farm Credit System, by written notice served
    upon such director, officer, or other person, suspend such
    director, officer, or other person from office or prohibit such
    director, officer, or other person from further participation in
    any manner in the conduct of the affairs of the institution.  A
    copy of such notice shall also be served upon the institution.
    Such suspension or prohibition shall remain in effect until such
    information, indictment, or complaint is finally disposed of or
    until terminated by the Farm Credit Administration. In the event
    that a judgment of conviction with respect to such crime is entered
    against such director, officer, or other person, and at such time
    as such judgment is not subject to further appellate review, the
    Farm Credit Administration may, if continued service or
    participation by the individual may pose a threat to the interests
    of the institution's shareholders or the investors in Farm Credit
    System obligations or may threaten to impair public confidence in
    the institution or the Farm Credit System, issue and serve upon
    such director, officer, or other person an order removing such
    director, officer, or other person from office or prohibiting such
    director, officer, or other person from further participation in
    any manner in the conduct of the affairs of the institution except
    with the consent of the Farm Credit Administration. A copy of such
    order shall also be served upon such institution, whereupon such
    director or officer shall cease to be a director or officer of such
    institution.  A finding of not guilty or other disposition of the
    charge shall not preclude the Farm Credit Administration from
    thereafter instituting proceedings to remove such director,
    officer, or other person from office or to prohibit further
    participation in Farm Credit System affairs under section 2264 of
    this title.  Any notice of suspension or order of removal issued
    under this paragraph shall remain effective and outstanding until
    the completion of any hearing or appeal authorized under subsection
    (b) of this section unless terminated by the Farm Credit
    Administration.
      (b) Within thirty days from service of any notice of suspension
    or order of removal issued under subsection (a) of this section,
    the director, officer, or other person concerned may request in
    writing an opportunity to appear before the Farm Credit
    Administration to show that the continued service to or
    participation in the conduct of the affairs of the institution by
    such individual does not, or is not likely to, pose a threat to the
    interest of the institution's shareholders or the investors in Farm
    Credit System obligations or threaten to impair public confidence
    in the institution or the Farm Credit System. Upon receipt of any
    such request, the Farm Credit Administration shall fix a time (not
    more than thirty days after receipt of such request, unless
    extended at the request of the concerned director, officer, or
    other person) and place at which the director, officer, or other
    person may appear, personally or through counsel, before the
    Chairman of the Farm Credit Administration or designated employees
    of the Farm Credit Administration to submit written materials (or,
    at the discretion of the Farm Credit Administration, oral
    testimony) and oral argument.  Within sixty days of such hearing,
    the Farm Credit Administration shall notify the director, officer,
    or other person whether the suspension or prohibition from
    participation in any manner in the conduct of the affairs of the
    institution will be continued, terminated, or otherwise modified,
    or whether the order removing such director, officer, or other
    person from office or prohibiting such individual from further
    participation in any manner in the conduct of the affairs of the
    institution will be rescinded or otherwise modified.  Such
    notification shall contain a statement of the basis for the Farm
    Credit Administration's decision, if adverse to the director,
    officer, or other person.  The Farm Credit Administration may
    prescribe such rules as may be necessary to effectuate the purposes
    of this subsection.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.29, as added Pub. L. 99-205, title
    II, Sec. 204, Dec. 23, 1985, 99 Stat. 1698; amended Pub. L.
    100-233, title VIII, Sec. 805(bb), Jan. 6, 1988, 101 Stat. 1717;
    Pub. L. 100-399, title VII, Sec. 702(e), Aug. 17, 1988, 102 Stat.
    1006.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 5.29 of Pub. L. 92-181 was renumbered section
    5.43 and is set out as a note under section 2001 of this title.
                                 AMENDMENTS
      1988 - Subsec. (a). Pub. L. 100-233, Sec. 805(bb)(1), substituted
    ''may pose a threat to the interests of the institution's
    shareholders or investors in Farm Credit System obligations or may
    threaten to impair public confidence in the institution or the Farm
    Credit System'' for ''may pose a threat to the interest of the
    institution's shareholders or the investors in the Farm Credit
    System obligations or may threaten to impair public confidence in
    the institution or Farm Credit System''.
      Subsec. (b). Pub. L. 100-233 struck out ''may'' before ''threaten
    to impair public confidence''.
      Pub. L. 100-233, Sec. 805(bb)(2), substituted ''of the
    institution's shareholders or the investors in Farm Credit System
    obligations or may threaten to impair public confidence in the
    institution or the Farm Credit System'' for ''in Farm Credit System
    obligations''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
                               EFFECTIVE DATE
      Section effective thirty days after Dec. 23, 1985, see section
    401 of Pub. L. 99-205, set out as an Effective Date of 1985
    Amendment note under section 2001 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2266, 2269, 2270, 2271 of
    this title.
 
-CITE-
    12 USC Sec. 2266                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part C - Enforcement Powers of Farm Credit Administration
 
-HEAD-
    Sec. 2266. Hearings and judicial review
 
-STATUTE-
    (a) Venue; closed hearings; decisions and findings of fact; orders;
        modification or other action by Farm Credit Administration;
        judicial review
      Any hearing provided for in this part (other than the hearing
    provided for in section 2265 of this title) shall be held in the
    Federal judicial district or in the territory in which the home
    office of the institution is located unless the party afforded the
    hearing consents to another place, and shall be conducted in
    accordance with the provisions of chapter 5 of title 5. Such
    hearing shall be private, unless the Farm Credit Administration, in
    its discretion, after fully considering the views of the party
    afforded the hearing, determines that a public hearing is necessary
    to protect the public interest.  After such hearing, and within
    ninety days after the Farm Credit Administration has notified the
    parties that the case has been submitted to it for final decision,
    it shall render its decision (which shall include findings of fact
    upon which its decision is predicated) and shall issue and serve
    upon each party to the proceeding an order or orders consistent
    with the provisions of this part.  Judicial review of any such
    order shall be exclusively as provided in this section.  Unless a
    petition for review is timely filed in a court of appeals of the
    United States, as hereinafter provided in subsection (b) of this
    section, and thereafter until the record in the proceeding has been
    filed as so provided, the Farm Credit Administration may at any
    time, upon such notice and in such manner as it shall deem proper,
    modify, terminate, or set aside any such order.  Upon such filing
    of the record, the Farm Credit Administration may modify,
    terminate, or set aside any such order with permission of the
    court.
    (b) Judicial review; commencement of proceedings; filing of
        petition and record; exclusive jurisdiction; finality of
        judgment and decree
      Any party to the proceeding, or any person required by an order
    issued under this part to cease and desist from any of the
    violations or practices stated therein, may obtain a review of any
    order served under subsection (a) of this section (other than an
    order issued with the consent of the System institution or the
    director or officer or other person concerned, or an order issued
    under section 2265 of this title) by the filing in the court of
    appeals of the United States for the circuit in which the home
    office of the institution is located, or in the United States Court
    of Appeals for the District of Columbia Circuit, within thirty days
    after the date of service of such order, a written petition praying
    that the order of the Farm Credit Administration be modified,
    terminated, or set aside.  A copy of such petition shall be
    forthwith transmitted by the clerk of the court to the Farm Credit
    Administration, and thereupon the Farm Credit Administration shall
    file in the court the record in the proceeding, as provided in
    section 2112 of title 28. Upon the filing of such petition, such
    court shall have jurisdiction, which upon the filing of the record
    shall except as provided in the last sentence of subsection (a) of
    this section be exclusive, to affirm, modify, terminate, or set
    aside, in whole or in part, the order of the Farm Credit
    Administration. Review of such proceedings shall be had as provided
    in chapter 7 of title 5. The judgment and decree of the court shall
    be final, except that the same shall be subject to review by the
    Supreme Court upon certiorari, as provided in section 1254 of title
    28.
    (c) Proceedings operating as stays of orders
      The commencement of proceedings for judicial review under
    subsection (b) of this section shall not, unless specifically
    ordered by the court, operate as a stay of any order issued by the
    Farm Credit Administration.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.30, as added Pub. L. 99-205, title
    II, Sec. 204, Dec. 23, 1985, 99 Stat. 1699; amended Pub. L.
    100-233, title VIII, Sec. 805(cc), Jan. 6, 1988, 101 Stat. 1717.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 5.30 of Pub. L. 92-181 was renumbered section
    5.44 and transferred from section 2260 to section 2275 of this
    title.
                                 AMENDMENTS
      1988 - Subsec. (a). Pub. L. 100-233 substituted ''this section''
    for ''this subsection (g)''.
                               EFFECTIVE DATE
      Section effective thirty days after Dec. 23, 1985, see section
    401 of Pub. L. 99-205, set out as an Effective Date of 1985
    Amendment note under section 2001 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2271 of this title.
 
-CITE-
    12 USC Sec. 2267                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part C - Enforcement Powers of Farm Credit Administration
 
-HEAD-
    Sec. 2267. Jurisdiction and enforcement
 
-STATUTE-
      The Farm Credit Administration may in its discretion apply to the
    United States district court, or the United States court of any
    territory, within the jurisdiction of which the home office of the
    institution is located, for the enforcement of any effective and
    outstanding notice or order issued under this part, and such courts
    shall have jurisdiction and power to order and require compliance
    herewith; but except as otherwise provided in this part no court
    shall have jurisdiction to affect by injunction or otherwise the
    issuance or enforcement of any notice or order under this part, or
    to review, modify, suspend, terminate, or set aside any such notice
    or order.  For purposes of this section, any directive issued under
    section 2154(b)(2), 2154a(e), or 2202a(i) of this title shall be
    treated as an effective and outstanding order issued under section
    2261 of this title that has become final.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.31, as added Pub. L. 99-205, title
    II, Sec. 204, Dec. 23, 1985, 99 Stat. 1700; amended Pub. L.
    100-233, title VIII, Sec. 804(a)(1), Jan. 6, 1988, 101 Stat. 1714.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-233 inserted at end ''For purposes of this
    section, any directive issued under section 2154(b)(2), 2154a(e),
    or 2202a(i) of this title shall be treated as an effective and
    outstanding order issued under section 2261 of this title that has
    become final.''
                               EFFECTIVE DATE
      Section effective thirty days after Dec. 23, 1985, see section
    401 of Pub. L. 99-205, set out as an Effective Date of 1985
    Amendment note under section 2001 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2268 of this title.
 
-CITE-
    12 USC Sec. 2268                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part C - Enforcement Powers of Farm Credit Administration
 
-HEAD-
    Sec. 2268. Penalty
 
-STATUTE-
    (a) Forfeiture and payment; compromise, modification, or remitting
        by Farm Credit Administration; assessment and collection by
        written notice
      Any institution in the System that violates or any officer,
    director, employee, agent, or other person participating in the
    conduct of the affairs of such an institution who violates the
    terms of any order that has become final and was issued under
    section 2261 or 2262 of this title, shall forfeit and pay a civil
    penalty of not more than $1,000 per day for each day during which
    such violation continues.  Any such institution or person who
    violates any provision of this chapter or any regulation issued
    under this chapter shall forfeit and pay a civil penalty of not
    more than $500 per day for each day during which such violation
    continues.  Notwithstanding the preceding sentences, the Farm
    Credit Administration may, in its discretion, compromise, modify,
    or remit any civil money penalty that is subject to imposition or
    has been imposed under such authority.  The penalty may be assessed
    and collected by the Farm Credit Administration by written notice.
    (b) Factors determining amount
      Before determining whether to assess a civil money penalty and
    determining the amount of such penalty, the Farm Credit
    Administration shall notify the institution or person to be
    assessed of the violation or violations alleged to have occurred or
    to be occurring, and shall solicit the views of the institution or
    person regarding the imposition of such penalty.  In determining
    the amount of the penalty, the Farm Credit Administration shall
    take into account the appropriateness of the penalty with respect
    to the size of financial resources and good faith of the System
    institution or person charged, the gravity of the violation, the
    history of previous violations, and such other matters as justice
    may require.
    (c) Notice and hearing; final orders
      The System institution or person assessed shall be afforded an
    opportunity for a hearing by the Farm Credit Administration, upon
    request made within ten days after issuance of the notice of
    assessment.  In such hearing all issues shall be determined on the
    record pursuant to section 554 of title 5. The Farm Credit
    Administration determination shall be made by final order which may
    be reviewed only as provided in subsection (d) of this section.  If
    no hearing is requested as herein provided, the assessment shall
    constitute a final and unappealable order.
    (d) Judicial review
      Any System institution or person against whom an order imposing a
    civil money penalty has been entered after a Farm Credit
    Administration hearing under this section may obtain review by the
    United States court of appeals for the circuit in which the home
    office of the System institution is located, or the United States
    Court of Appeals for the District of Columbia Circuit, by filing a
    notice of appeal in such court within twenty days after the service
    of such order, and simultaneously sending a copy of such notice by
    registered or certified mail to the Farm Credit Administration. The
    Farm Credit Administration shall promptly certify and file in such
    Court the record upon which the penalty was imposed, as provided in
    section 2112 of title 28. Final orders of the Farm Credit
    Administration issued under subsection (c) of this section shall be
    reviewable under chapter 7 of title 5.
    (e) Action by Attorney General to recover amount assessed
      If any System institution or person fails to pay an assessment
    after it has become a final and unappealable order, or after the
    court of appeals has entered final judgment in favor of the Farm
    Credit Administration, the Farm Credit Administration shall refer
    the matter to the Attorney General, who shall recover the amount
    assessed by action in the appropriate United States district
    court.  In such action, the validity and appropriateness of the
    final order imposing the penalty shall not be subject to review.
    (f) Rules and regulations
      The Farm Credit Administration shall promulgate regulations
    establishing procedures necessary to implement section 2267 of this
    title and this section.
    (g) Payment into Treasury
      All penalties collected under authority of this section shall be
    covered into the Treasury of the United States.
    (h) Directives as final orders
      For purposes of this section, any directive issued under section
    2154(b)(2), 2154a(e), or 2202a(i) of this title shall be treated as
    an order that has become final and was issued under section 2261 of
    this title.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.32, as added Pub. L. 99-205, title
    II, Sec. 204, Dec. 23, 1985, 99 Stat. 1700; amended Pub. L.
    100-233, title IV, Sec. 423, title VIII, Sec. 804(a)(2), 805(dd),
    Jan. 6, 1988, 101 Stat. 1656, 1714, 1717.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Subsec. (a). Pub. L. 100-233, Sec. 423(a), substituted
    ''continues. Any such institution or person who violates any
    provision of this chapter or any regulation issued under this
    chapter shall forfeit and pay a civil penalty of not more than $500
    per day for each day during which such violation continues.
    Notwithstanding the preceding sentences,'' for ''continues, but''.
      Subsec. (b). Pub. L. 100-233, Sec. 423(b), inserted ''Before
    determining whether to assess a civil money penalty and determining
    the amount of such penalty, the Farm Credit Administration shall
    notify the institution or person to be assessed of the violation or
    violations alleged to have occurred or to be occurring, and shall
    solicit the views of the institution or person regarding the
    imposition of such penalty.''
      Subsec. (d). Pub. L. 100-233, Sec. 423(c), substituted ''Final
    orders of the Farm Credit Administration issued under subsection
    (c) of this section shall be reviewable under chapter 7 of title
    5'' for ''The findings of the Farm Credit Administration shall be
    set aside if found to be unsupported by substantial evidence as
    provided by section 706(2)(E) of title 5''.
      Subsec. (f). Pub. L. 100-233, Sec. 805(dd), substituted ''section
    2267 of this title and this section'' for ''sections 2267 and 2268
    of this title''.
      Subsec. (h). Pub. L. 100-233, Sec. 804(a)(2), added subsec. (h).
                               EFFECTIVE DATE
      Section effective thirty days after Dec. 23, 1985, see section
    401 of Pub. L. 99-205, set out as an Effective Date of 1985
    Amendment note under section 2001 of this title.
 
-CITE-
    12 USC Sec. 2269                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part C - Enforcement Powers of Farm Credit Administration
 
-HEAD-
    Sec. 2269. Further penalties
 
-STATUTE-
      Any director or officer, or former director or officer of a
    System institution, or any other person, against whom there is
    outstanding and effective any notice or order (which is an order
    which has become final) served upon such director, officer, or
    other person under section 2264 or 2265 of this title, and who (1)
    participates in any manner in the conduct of the affairs of the
    institution involved, or directly or indirectly solicits or
    procures, or transfers or attempts to transfer, or votes or
    attempts to vote, any proxies, consents, or authorizations in
    respect of any voting rights in such institution, or (2) without
    the prior written approval of the Farm Credit Administration, votes
    for a director, serves or acts as a director, officer, or employee
    of any System institution, shall upon conviction be fined not more
    than $5,000 or imprisoned for not more than one year, or both.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.33, as added Pub. L. 99-205, title
    II, Sec. 204, Dec. 23, 1985, 99 Stat. 1701.)
 
-MISC1-
                               EFFECTIVE DATE
      Section effective thirty days after Dec. 23, 1985, see section
    401 of Pub. L. 99-205, set out as an Effective Date of 1985
    Amendment note under section 2001 of this title.
 
-CITE-
    12 USC Sec. 2270                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part C - Enforcement Powers of Farm Credit Administration
 
-HEAD-
    Sec. 2270. Replacement of suspended or removed directors
 
-STATUTE-
      If at any time, because of the suspension or removal of one or
    more directors pursuant to section 2264 or 2265 of this title,
    there shall be on the board of directors of a System institution
    less than a quorum of directors not so suspended, the Chairman
    shall appoint persons to serve temporarily as directors in their
    place and stead so as to establish a quorum until such time as
    those who have been removed are reinstated or their respective
    successors are duly elected and take office.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.34, as added Pub. L. 99-205, title
    II, Sec. 204, Dec. 23, 1985, 99 Stat. 1701.)
 
-MISC1-
                               EFFECTIVE DATE
      Section effective thirty days after Dec. 23, 1985, see section
    401 of Pub. L. 99-205, set out as an Effective Date of 1985
    Amendment note under section 2001 of this title.
 
-CITE-
    12 USC Sec. 2271                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part C - Enforcement Powers of Farm Credit Administration
 
-HEAD-
    Sec. 2271. Definitions
 
-STATUTE-
      As used in this part -
        (1) the terms ''cease and desist order that has become final''
      and ''order which has become final'' mean a cease and desist
      order, or an order, issued by the Farm Credit Administration with
      the consent of the System institution or the director or officer
      or other person concerned, or with respect to which no petition
      for review of the action of the Farm Credit Administration has
      been filed and perfected in a court of appeals as specified in
      section 2266(b) of this title, or with respect to which the
      action of the court in which such petition is so filed is not
      subject to further review by the Supreme Court of the United
      States in proceedings provided for in section 2266(b) of this
      title, or an order issued under section 2265 of this title;
        (2) the term ''violation'' includes without limitation any
      action (alone or with another or others) for or toward causing,
      bringing about, participating in, counseling, or aiding or
      abetting a violation;
        (3) the terms ''institution in the System'', ''System
      institution'', and ''institution'' mean all institutions
      enumerated in section 2002 of this title, any service
      organization chartered under part E of subchapter IV of this
      chapter, and the Financial Assistance Corporation; and
        (4) the term ''unsafe or unsound practice'' shall -
          (A) have the meaning given to it by the Farm Credit
        Administration by regulation, rule, or order;
          (B) during the period beginning on January 6, 1988, and
        ending December 31, 1992, mean any noncompliance by a System
        institution, as determined by the Farm Credit Administration in
        consultation with the Assistance Board, with any term or
        condition imposed on the institution by the Assistance Board
        under section 2278a-6 of this title; and
          (C) after December 31, 1992, mean any significant
        noncompliance by a System institution (as determined by the
        Farm Credit Administration, in consultation with the Farm
        Credit System Insurance Corporation) with any term or condition
        imposed on the institution by the Farm Credit System Assistance
        Board under section 2278a-6 of this title or by the Farm Credit
        System Insurance Corporation under section 2277a-10 of this
        title.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.35, as added Pub. L. 99-205, title
    II, Sec. 204, Dec. 23, 1985, 99 Stat. 1701; amended Pub. L.
    100-233, title II, Sec. 203, 207(d), Jan. 6, 1988, 101 Stat. 1605,
    1608; Pub. L. 102-237, title V, Sec. 502(i), Dec. 13, 1991, 105
    Stat. 1869; Pub. L. 102-552, title II, Sec. 202(b), Oct. 28, 1992,
    106 Stat. 4106.)
 
-COD-
                                CODIFICATION
      January 6, 1988, referred to in par. (4)(B), was in the original
    ''the date of the enactment of this paragraph'' which was
    translated as meaning the date of enactment of Pub. L. 100-233,
    which amended par. (4) generally, to reflect the probable intent of
    Congress.
 
-MISC3-
                                 AMENDMENTS
      1992 - Par. (4)(C). Pub. L. 102-552 added subpar. (C).
      1991 - Par. (3). Pub. L. 102-237 substituted ''part E'' for
    ''part D''.
      1988 - Par. (3). Pub. L. 100-233, Sec. 207(d), substituted
    ''Financial Assistance Corporation'' for ''Capital Corporation''.
      Par. (4). Pub. L. 100-233, Sec. 203, amended par. (4) generally.
    Prior to amendment, par. (4) read as follows: ''the term 'unsafe or
    unsound practice' shall have the meaning given to it by the Farm
    Credit Administration by regulations, rule, or order.''
                      EFFECTIVE DATE OF 1991 AMENDMENT
      Amendment by Pub. L. 102-237 effective as if included in the
    provision of the Food, Agriculture, Conservation, and Trade Act of
    1990, Pub. L. 101-624, to which the amendment relates, see section
    1101(b)(4) of Pub. L. 102-237, set out as a note under section 1421
    of Title 7, Agriculture.
                               EFFECTIVE DATE
      Section effective thirty days after Dec. 23, 1985, see section
    401 of Pub. L. 99-205, set out as an Effective Date of 1985
    Amendment note under section 2001 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in title 18 section 20.
 
-CITE-
    12 USC Sec. 2272                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part C - Enforcement Powers of Farm Credit Administration
 
-HEAD-
    Sec. 2272. Notice of service
 
-STATUTE-
      Any service required or authorized to be made by the Farm Credit
    Administration under this section may be made by registered mail,
    or in such other manner reasonably calculated to give actual notice
    as the Farm Credit Administration may by regulation or otherwise
    provide.  Any such service by mail is complete upon mailing.
    Copies of any notice or order served by the Farm Credit
    Administration on any association or any director or officer
    thereof or other person participating in the conduct of its
    affairs, under the provisions of this part, shall also be sent to
    the supervisory bank.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.36, as added Pub. L. 99-205, title
    II, Sec. 204, Dec. 23, 1985, 99 Stat. 1702.)
 
-MISC1-
                               EFFECTIVE DATE
      Section effective thirty days after Dec. 23, 1985, see section
    401 of Pub. L. 99-205, set out as an Effective Date of 1985
    Amendment note under section 2001 of this title.
 
-CITE-
    12 USC Sec. 2273                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part C - Enforcement Powers of Farm Credit Administration
 
-HEAD-
    Sec. 2273. Ancillary provisions; subpena power; etc.
 
-STATUTE-
      In the course of or in connection with any proceeding under this
    part or any examination or investigation under this chapter, the
    Farm Credit Administration or any designated representative
    thereof, including any person designated to conduct any hearing
    under this part, shall have the power to administer oaths and
    affirmations, to take or cause to be taken depositions, and to
    issue, revoke, quash, or modify subpenas and subpenas duces tecum;
    and the Farm Credit Administration is empowered to make rules and
    regulations with respect to any such proceedings, examinations, or
    investigations.  The attendance of witnesses and the production of
    documents provided for in this section may be required from any
    place in any State or in any territory or other place subject to
    the jurisdiction of the United States at any designated place where
    such proceeding is being conducted.  The Farm Credit Administration
    or any party to proceedings under this part may apply to the United
    States District Court for the District of Columbia, or the United
    States district court for the judicial district or the United
    States court in any territory in which such proceeding is being
    conducted, or where the witness resides or carries on business, for
    enforcement of any subpena or subpena duces tecum issued pursuant
    to this part, and such courts shall have jurisdiction and power to
    order and require compliance therewith.  Witnesses subpenaed under
    this section shall be paid the same fees and mileage that are paid
    witnesses in the district courts of the United States. Any court
    having jurisdiction of any proceeding instituted under this part by
    a System institution or a director or officer thereof, may allow to
    any such party such reasonable expenses and attorneys' fees as it
    deems just and proper; and such expenses and fees shall be paid by
    the System institution or from its assets.  Any person who
    willfully shall fail or refuse to attend or testify or to answer
    any lawful inquiry or to produce books, papers, correspondence,
    memoranda, contracts, agreements, or other records, if in such
    person's power so to do, in obedience to the subpena of the Farm
    Credit Administration, shall be guilty of a misdemeanor and, upon
    conviction, shall be subject to a fine of not more than $1,000 or
    to imprisonment for a term of not more than one year or both.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.37, as added Pub. L. 99-205, title
    II, Sec. 204, Dec. 23, 1985, 99 Stat. 1702; amended Pub. L.
    100-233, title VIII, Sec. 805(ee), Jan. 6, 1988, 101 Stat. 1717.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-233 substituted ''proceedings, examinations,
    or investigations'' for ''proceedings, claims, examinations, or
    investigations''.
                               EFFECTIVE DATE
      Section effective thirty days after Dec. 23, 1985, see section
    401 of Pub. L. 99-205, set out as an Effective Date of 1985
    Amendment note under section 2001 of this title.
 
-CITE-
    12 USC Sec. 2274                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part C - Enforcement Powers of Farm Credit Administration
 
-HEAD-
    Sec. 2274. Power to remove directors and officers
 
-STATUTE-
      Notwithstanding any other provision of this chapter, a farm
    credit district board, bank board, or bank officer or employee
    shall not remove any director or officer of any production credit
    association or Federal land bank association.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.38, as added Pub. L. 100-233,
    title IV, Sec. 432(c), Jan. 6, 1988, 101 Stat. 1661.)
 
-CITE-
    12 USC Part D - Miscellaneous                                01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part D - Miscellaneous
    .
 
-HEAD-
    Part D - Miscellaneous
 
-CITE-
    12 USC Sec. 2275                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part D - Miscellaneous
 
-HEAD-
    Sec. 2275. General Accounting Office audit; report to Congress
 
-STATUTE-
      (a) The Comptroller General shall conduct an evaluation of the
    programs and activities authorized under the 1980 amendments to
    this chapter, and shall make an interim report to the Congress no
    later than December 31, 1982, and a final report to the Congress no
    later than December 31, 1984. The Comptroller General shall include
    in such evaluation the effect that this chapter, as amended, will
    have on agricultural credit services provided by the Farm Credit
    System, Federal agencies, and other entities.  The Comptroller
    General may make such interim reports to the Congress on the
    programs and activities under these amendments as the Comptroller
    General deems necessary or as requested by Members of Congress.
      (b) For the purpose of conducting program evaluations required in
    subsection (a) of this section, the Comptroller General or his duly
    authorized representatives shall have access to and the right to
    examine all books, documents, papers, records, or other recorded
    information within the possession or control of the Federal land
    banks and Federal land bank associations, Federal intermediate
    credit banks and production credit associations and banks for
    cooperatives.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.44, formerly Sec. 5.30, as added
    Pub. L. 96-592, title V, Sec. 509, Dec. 24, 1980, 94 Stat. 3450;
    renumbered Sec. 544, Pub. L. 99-205, title II, Sec. 205(a)(2), Dec.
    23, 1985, 99 Stat. 1703.)
 
-REFTEXT-
                             REFERENCES IN TEXT
      The 1980 amendments to this chapter and these amendments,
    referred to in subsec. (a), are the amendments made to this chapter
    by the Farm Credit Act Amendment of 1980, Pub. L. 96-592, Dec. 24,
    1980, 94 Stat. 3437. For complete classification of this Act to the
    Code, see Short Title of 1980 Amendment note set out under section
    2001 of this title and Tables.
 
-COD-
                                CODIFICATION
      Section was formerly classified to section 2260 of this title.
      Similar provisions relating to general powers of the Comptroller
    General with respect to access and examination of books, documents,
    etc., are set out in section 2276 of this title.
 
-CITE-
    12 USC Sec. 2275a                                            01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part D - Miscellaneous
 
-HEAD-
    Sec. 2275a. Transition rules relating to amendment of certain FCA
        approval authorities
 
-STATUTE-
    (a) In general
      Any approvals granted by the Farm Credit Administration before
    January 6, 1988, shall remain in effect on and after such date.
    (b) Authority to issue regulations
      (1) In general
        Any approval authority of the Farm Credit Administration that,
      under the amendments made by section 802 of the Agricultural
      Credit Act of 1987, became an authority to issue regulations may
      be exercised only until the earlier of the date the Farm Credit
      Administration issues final regulations under such authority, or
      1 year after January 6, 1988.
      (2) Enforcement actions
        At the close of the 1-year period referred to in paragraph (1),
      the Farm Credit Administration shall not take any enforcement
      action against any System institution with respect to any
      provision so amended, until the Farm Credit Administration issues
      final regulations under such provision.
    (c) Effect of section
      This section shall not affect the authority of the Farm Credit
    Administration to exercise any other approval authority either on a
    case-by-case basis or through regulation, as provided in section
    2252(a)(5) of this title.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.45, as added Pub. L. 100-233,
    title VIII, Sec. 802(w), Jan. 6, 1988, 101 Stat. 1713.)
 
-REFTEXT-
                             REFERENCES IN TEXT
      The amendments made by section 802 of the Agricultural Credit Act
    of 1987, referred to in subsec. (b)(1), are the amendments made by
    section 802 of Pub. L. 100-233, title VIII, Jan. 6, 1988, 101 Stat.
    1710, which enacted section 2275a of this title and amended
    sections 2011 to 2013, 2017, 2031, 2051, 2052, 2071 to 2073, 2077,
    2091, 2121, 2122, 2124, 2126, 2130, 2132, 2212, 2213, 2223, and
    2252 of this title.  For complete classification of section 802 to
    the Code, see Tables.
 
-CITE-
    12 USC Sec. 2276                                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part D - Miscellaneous
 
-HEAD-
    Sec. 2276. Access to and examination by Comptroller General of
        books, documents, etc., of farm credit system banks and
        institutions
 
-STATUTE-
      On and after December 19, 1985, the Comptroller General or his
    duly authorized representatives shall have access to and the right
    to examine all books, documents, papers, records, or other recorded
    information within the possession or control of the Federal land
    banks and Federal land bank associations, Federal intermediate
    credit banks and production credit associations and banks for
    cooperatives.
 
-SOURCE-
    (Pub. L. 99-190, Sec. 107, Dec. 19, 1985, 99 Stat. 1316.)
 
-COD-
                                CODIFICATION
      Section was not enacted as part of the Farm Credit Act of 1971
    which comprises this chapter.
      Similar provisions relating to powers of the Comptroller General
    with respect to access and examination of books, documents, etc.,
    for purposes of conducting program evaluations under section
    2275(a) of this title, are set out in section 2275(b) of this
    title.
 
-CITE-
    12 USC Part E - Farm Credit System Insurance Corporation     01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part E - Farm Credit System Insurance Corporation
    .
 
-HEAD-
    Part E - Farm Credit System Insurance Corporation
 
-SECREF-
                     PART REFERRED TO IN OTHER SECTIONS
      This part is referred to in section 2020 of this title.
 
-CITE-
    12 USC Sec. 2277a                                            01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part E - Farm Credit System Insurance Corporation
 
-HEAD-
    Sec. 2277a. Definitions
 
-STATUTE-
      As used in this part:
      (1) Board of Directors
        The term ''Board of Directors'' means the Board of Directors of
      the Corporation.
      (2) Corporation
        The term ''Corporation'' means the Farm Credit System Insurance
      Corporation established in section 2277a-1 of this title.
      (3) Insured obligation
        The term ''insured obligation'' means any note, bond,
      debenture, or other obligation issued under subsection (c) or (d)
      of section 2153 of this title -
          (A) on or before January 5, 1989, on behalf of any System
        bank; and
          (B) after such date, which, when issued, is issued on behalf
        of any insured System bank.
      (4) Insured System bank
        The term ''insured System bank'' means any System bank whose
      participation in notes, bonds, debentures, and other obligations
      issued under subsection (c) or (d) of section 2153 of this title
      is insured under this part.
      (5) State
        The term ''State'' means any of the 50 States, the District of
      Columbia, any Territory of the United States, Puerto Rico, Guam,
      American Samoa, the Trust Territory of the Pacific Islands, or
      the Virgin Islands.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.51, as added Pub. L. 100-233,
    title III, Sec. 302, Jan. 6, 1988, 101 Stat. 1611; amended Pub. L.
    100-399, title III, Sec. 302(a), (b), Aug. 17, 1988, 102 Stat. 994;
    Pub. L. 104-105, title II, Sec. 214(a), Feb. 10, 1996, 110 Stat.
    175.)
 
-MISC1-
                                 AMENDMENTS
      1996 - Pars. (5), (6). Pub. L. 104-105 redesignated par. (6) as
    (5) and struck out heading and text of former par. (5). Text read
    as follows: ''The term 'receiver' means a receiver or conservator
    appointed by the Farm Credit Administration for a System
    institution.''
      1988 - Par. (3)(A), (B). Pub. L. 100-399, Sec. 302(a), amended
    subpars. (A) and (B) generally.  Prior to amendment, subpars. (A)
    and (B) read as follows:
      ''(A) on or before January 6, 1988, on behalf of any System bank;
    and
      ''(B) after such date, on behalf of any insured System bank.''
      Par. (5). Pub. L. 100-399, Sec. 302(b), substituted ''for'' for
    ''to liquidate''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-TRANS-
           TERMINATION OF TRUST TERRITORY OF THE PACIFIC ISLANDS
      For termination of Trust Territory of the Pacific Islands, see
    note set out preceding section 1681 of Title 48, Territories and
    Insular Possessions.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2183, 2279aa of this
    title.
 
-CITE-
    12 USC Sec. 2277a-1                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part E - Farm Credit System Insurance Corporation
 
-HEAD-
    Sec. 2277a-1. Establishment of Farm Credit System Insurance
        Corporation
 
-STATUTE-
      There is hereby established the Farm Credit System Insurance
    Corporation which shall insure, in accordance with this part, the
    timely payment of principal and interest on notes, bonds,
    debentures, and other obligations issued under subsection (c) or
    (d) of section 2153 of this title on behalf of one or more System
    banks all of which are entitled to the benefits of insurance under
    this part.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.52, as added Pub. L. 100-233,
    title III, Sec. 302, Jan. 6, 1988, 101 Stat. 1611.)
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2277a of this title.
 
-CITE-
    12 USC Sec. 2277a-2                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part E - Farm Credit System Insurance Corporation
 
-HEAD-
    Sec. 2277a-2. Board of Directors
 
-STATUTE-
    (a) Establishment
      The Corporation shall be managed by a Board of Directors that
    shall consist of the members of the Farm Credit Administration
    Board.
    (b) Chairman
      The Board of Directors shall be chaired by any Board member other
    than the Chairman of the Farm Credit Administration Board.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.53, as added Pub. L. 100-233,
    title III, Sec. 302, Jan. 6, 1988, 101 Stat. 1611; amended Pub. L.
    102-552, title II, Sec. 201(a), Oct. 28, 1992, 106 Stat. 4104; Pub.
    L. 104-105, title II, Sec. 219(a), Feb. 10, 1996, 110 Stat. 184.)
 
-MISC1-
                                 AMENDMENTS
      1996 - Pub. L. 104-105 amended section generally.  Prior to
    amendment, section related to Board of Directors, including
    provisions relating to establishment, appointment, chairperson,
    postemployment prohibition, terms of office, succession, vacancies,
    oath, quorum, meetings, rules and records, compensation, and
    expenses.
      1992 - Pub. L. 102-552 amended section generally.  Prior to
    amendment, section read as follows:
      ''(a) Establishment. - The Corporation shall be managed by a
    Board of Directors that shall consist of the members of the Farm
    Credit Administration Board.
      ''(b) Chairman. - The Board of Directors shall be chaired by any
    Board member other than the Chairman of the Farm Credit
    Administration Board.''
           EFFECTIVE DATE OF 1992 AMENDMENT; TRANSITION PROVISION
      Section 201(c) of Pub. L. 102-552 provided that:
      ''(1) In general. - The amendments made by this section (amending
    this section and sections 5314 and 5315 of Title 5, Government
    Organization and Employees) shall become effective on January 1,
    1996.
      ''(2) Transitional provision. - The Board of Directors of the
    Farm Credit System Insurance Corporation as established by section
    5.53 of the Farm Credit Act of 1971 (12 U.S.C. 2277a-2) (as it
    existed before the amendments made by subsection (a) of this
    section) shall continue in existence and continue to manage the
    Farm Credit System Insurance Corporation until at least two members
    are appointed by the President, by and with the advice and consent
    of the Senate, to the new Board established by section 5.53 of such
    Act (as amended by subsection (a) of this section).''
 
-CITE-
    12 USC Sec. 2277a-3                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part E - Farm Credit System Insurance Corporation
 
-HEAD-
    Sec. 2277a-3. Commencement of insurance
 
-STATUTE-
      Effective beginning on January 1, 1989, or 12 months after
    January 6, 1988, whichever is later, each System bank shall be an
    insured System bank and shall be subject to this part.  Each System
    bank that is authorized to commence or resume operations under a
    subchapter of this chapter shall be an insured System bank from the
    time of such authorization.  A bank resulting from the merger or
    consolidation of insured System banks shall be an insured System
    bank.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.54, as added Pub. L. 100-233,
    title III, Sec. 302, Jan. 6, 1988, 101 Stat. 1611.)
 
-CITE-
    12 USC Sec. 2277a-4                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part E - Farm Credit System Insurance Corporation
 
-HEAD-
    Sec. 2277a-4. Premiums
 
-STATUTE-
    (a) Amount in Fund not exceeding secure base amount
      (1) In general
        If at the end of any calendar year the aggregate of amounts in
      the Farm Credit Insurance Fund does not exceed the secure base
      amount, subject to paragraph (2), the annual premium due from any
      insured System bank for the calendar year shall be equal to the
      sum of -
          (A) the annual average principal outstanding for such year on
        loans made by the bank that are in accrual status, excluding
        the guaranteed portions of government-guaranteed loans provided
        for in subparagraph (C), multiplied by 0.0015;
          (B) the annual average principal outstanding for such year on
        loans made by the bank that are in nonaccrual status,
        multiplied by 0.0025; and
          (C)(i) the annual average principal outstanding for such year
        on the guaranteed portions of Federal Government-guaranteed
        loans made by the bank that are in accrual status, multiplied
        by 0.00015; and
          (ii) the annual average principal outstanding for such year
        on the guaranteed portions of State government-guaranteed loans
        made by the bank that are in accrual status, multiplied by
        0.0003.
      (2) Reduced premiums
        The Corporation, in the sole discretion of the Corporation, may
      reduce by a percentage uniformly applied to all insured System
      banks the annual premium due from each insured System bank during
      any calendar year, as determined under paragraph (1).
      (3) ''Government-guaranteed loans'' defined
        As used in this section and section 2020(b) of this title, the
      term ''government-guaranteed loans'' means loans or credits, or
      portions of loans or credits, that are guaranteed -
          (A) by the full faith and credit of the United States
        Government or any State government;
          (B) by an agency or other entity of the United States
        Government whose obligations are explicitly guaranteed by the
        United States Government; or
          (C) by an agency or other entity of a State government whose
        obligations are explicitly guaranteed by such State government.
    (b) Amount in Fund exceeding secure base amount
      At any time the aggregate of amounts in the Farm Credit Insurance
    Fund exceeds the secure base amount, the Corporation shall reduce
    the annual premium due from each insured System bank, as determined
    under subsection (a)(1) of this section, by a percentage determined
    by the Corporation so that the aggregate of the premiums payable by
    all System banks is sufficient to ensure that the aggregate of
    amounts in the Farm Credit Insurance Fund after such premiums are
    paid is not less than the secure base amount at such time.
    (c) Secure base amount
      For purposes of this part, the term ''secure base amount'' means,
    with respect to any point in time, 2 percent of the aggregate
    outstanding insured obligations of all insured System banks at such
    time (adjusted downward to exclude an amount equal to the sum of
    (1) 90 percent of the guaranteed portions of principal outstanding
    on Federal Government-guaranteed loans in accrual status made by
    such banks and (2) 80 percent of the guaranteed portions of
    principal outstanding on State government-guaranteed loans in
    accrual status made by such banks, as determined by the
    Corporation), or such other percentage of the aggregate amount as
    the Corporation in its sole discretion determines is actuarially
    sound to maintain in the Insurance Fund taking into account the
    risk of insuring outstanding insured obligations.
    (d) Determination of principal outstanding
      For the purpose of subsections (a), (c), and (e) of this section,
    the principal outstanding on all loans made by an insured System
    bank shall be determined based on all loans made -
        (1) by any production credit association, or any other
      association making direct loans under authority provided under
      section 2279b of this title, that is able to make such loans
      because such association is receiving, or has received, funds
      provided through the insured System bank;
        (2) by any bank, company, institution, corporation, union, or
      association described in section 2015(b)(1)(B) of this title,
      that is able to make such loans because such entity is receiving,
      or has received, funds provided through the insured System bank;
      and
        (3) by such insured System bank (other than loans made to any
      party described in paragraph (1) or (2)).
    (e) Allocation to System institutions of excess reserves
      (1) Establishment of Allocated Insurance Reserves Accounts
        There is hereby established in the Farm Credit Insurance Fund
      an Allocated Insurance Reserves Account -
          (A) for each insured System bank; and
          (B) subject to paragraph (6)(C), for all holders, in the
        aggregate, of Financial Assistance Corporation stock.
      (2) Treatment
        Amounts in any Allocated Insurance Reserves Account shall be
      considered to be part of the Farm Credit Insurance Fund.
      (3) Annual allocations
        If, at the end of any calendar year, the aggregate of the
      amounts in the Farm Credit Insurance Fund exceeds the average
      secure base amount for the calendar year (as calculated on an
      average daily balance basis), the Corporation shall allocate to
      the Allocated Insurance Reserves Accounts the excess amount less
      the amount that the Corporation, in its sole discretion,
      determines to be the sum of the estimated operating expenses and
      estimated insurance obligations of the Corporation for the
      immediately succeeding calendar year.
      (4) Allocation formula
        From the total amount required to be allocated at the end of a
      calendar year under paragraph (3) -
          (A) 10 percent of the total amount shall be credited to the
        Allocated Insurance Reserves Account established under
        paragraph (1)(B), subject to paragraph (6)(C); and
          (B) there shall be credited to the Allocated Insurance
        Reserves Account of each insured System bank an amount that
        bears the same ratio to the total amount (less any amount
        credited under subparagraph (A)) as the average principal
        outstanding for the 3-year period ending on the end of the
        calendar year on loans made by the bank that are in accrual
        status bears to the average principal outstanding for the
        3-year period ending on the end of the calendar year on loans
        made by all insured System banks that are in accrual status
        (excluding, in each case, the guaranteed portions of
        government-guaranteed loans described in subsection (a)(1)(C)
        of this section).
      (5) Use of funds in Allocated Insurance Reserves Accounts
        To the extent that the sum of the operating expenses of the
      Corporation and the insurance obligations of the Corporation for
      a calendar year exceeds the sum of operating expenses and
      insurance obligations determined under paragraph (3) for the
      calendar year, the Corporation shall cover the expenses and
      obligations by -
          (A) reducing each Allocated Insurance Reserves Account by the
        same proportion; and
          (B) expending the amounts obtained under subparagraph (A)
        before expending other amounts in the Fund.
      (6) Other disposition of Account funds
        (A) In general
          As soon as practicable during each calendar year beginning
        more than 8 years after the date on which the aggregate of the
        amounts in the Farm Credit Insurance Fund exceeds the secure
        base amount, but not earlier than January 1, 2005, the
        Corporation may -
            (i) subject to subparagraphs (D) and (F), pay to each
          insured System bank, in a manner determined by the
          Corporation, an amount equal to the lesser of -
              (I) 20 percent of the balance in the insured System
            bank's Allocated Insurance Reserves Account as of the
            preceding December 31; or
              (II) 20 percent of the balance in the bank's Allocated
            Insurance Reserves Account on the date of the payment; and
            (ii) subject to subparagraphs (C), (E), and (F), pay to
          each System bank and association holding Financial Assistance
          Corporation stock a proportionate share, determined by
          dividing the number of shares of Financial Assistance
          Corporation stock held by the institution by the total number
          of shares of Financial Assistance Corporation stock
          outstanding, of the lesser of -
              (I) 20 percent of the balance in the Allocated Insurance
            Reserves Account established under paragraph (1)(B) as of
            the preceding December 31; or
              (II) 20 percent of the balance in the Allocated Insurance
            Reserves Account established under paragraph (1)(B) on the
            date of the payment.
        (B) Authority to eliminate or reduce payments
          The Corporation may eliminate or reduce payments during a
        calendar year under subparagraph (A) if the Corporation
        determines, in its sole discretion, that the payments, or other
        circumstances that might require use of the Farm Credit
        Insurance Fund, could cause the amount in the Farm Credit
        Insurance Fund during the calendar year to be less than the
        secure base amount.
        (C) Reimbursement for Financial Assistance Corporation stock
          (i) Sufficient funding
            Notwithstanding paragraph (4)(A), on provision by the
          Corporation for the accumulation in the Account established
          under paragraph (1)(B) of funds in an amount equal to
          $56,000,000 (in addition to the amounts described in
          subparagraph (F)(ii)), the Corporation shall not allocate any
          further funds to the Account except to replenish the Account
          if funds are diminished below $56,000,000 by the Corporation
          under paragraph (5).
          (ii) Wind down and termination
            (I) Final disbursements
              On disbursement of $53,000,000 (in addition to the
            amounts described in subparagraph (F)(ii)) from the
            Allocated Insurance Reserves Account, the Corporation shall
            disburse the remaining amounts in the Account, as
            determined under subparagraph (A)(ii), without regard to
            the percentage limitations in subclauses (I) and (II) of
            subparagraph (A)(ii).
            (II) Termination of Account
              On disbursement of $56,000,000 (in addition to the
            amounts described in subparagraph (F)(ii)) from the
            Allocated Insurance Reserves Account, the Corporation shall
            close the Account established under paragraph (1)(B) and
            transfer any remaining funds in the Account to the
            remaining Allocated Insurance Reserves Accounts in
            accordance with paragraph (4)(B) for the calendar year in
            which the transfer occurs.
        (D) Distribution of payments received
          Not later than 60 days after receipt of a payment made under
        subparagraph (A)(i), each insured System bank, in consultation
        with affiliated associations of the insured System bank, and
        taking into account the direct or indirect payment of insurance
        premiums by the associations, shall develop and implement an
        equitable plan to distribute payments received under
        subparagraph (A)(i) among the bank and associations of the
        bank.
        (E) Exception for previously reimbursed associations
          For purposes of subparagraph (A)(ii), in any Farm Credit
        district in which the funding bank has reimbursed 1 or more
        affiliated associations of the bank for the previously
        unreimbursed portion of the Financial Assistance Corporation
        stock held by the associations, the funding bank shall be
        deemed to be the holder of the shares of Financial Assistance
        Corporation stock for which the funding bank has provided the
        reimbursement.
        (F) Initial payment
          Notwithstanding subparagraph (A), the initial payment made to
        each payee under subparagraph (A) shall be in such amount
        determined by the Corporation to be equal to the sum of -
            (i) the total of the amounts that would have been paid if
          payments under subparagraph (A) had been authorized to begin,
          under the same terms and conditions, in the first calendar
          year beginning more than 5 years after the date on which the
          aggregate of the amounts in the Farm Credit Insurance Fund
          exceeds the secure base amount, and to continue through the 2
          immediately subsequent years;
            (ii) interest earned on any amounts that would have been
          paid as described in clause (i) from the date on which the
          payments would have been paid as described in clause (i); and
            (iii) the payment to be made in the initial year described
          in subparagraph (A), based on the amount in each Account
          after subtracting the amounts to be paid under clauses (i)
          and (ii).
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.55, as added Pub. L. 100-233,
    title III, Sec. 302, Jan. 6, 1988, 101 Stat. 1612; amended Pub. L.
    100-399, title III, Sec. 302(c)-(e), Aug. 17, 1988, 102 Stat. 994;
    Pub. L. 101-220, Sec. 6(a), Dec. 12, 1989, 103 Stat. 1879; Pub. L.
    104-105, title II, Sec. 215(a)(1), (2)(A), (b), (c), Feb. 10, 1996,
    110 Stat. 175, 176, 179.)
 
-MISC1-
                                 AMENDMENTS
      1996 - Subsec. (a). Pub. L. 104-105, Sec. 215(a)(1)(A),
    substituted ''If at the end of any calendar year the aggregate of
    amounts in the Farm Credit Insurance Fund does not exceed the
    secure base amount, subject to paragraph (2), the annual premium
    due from any insured System bank for the calendar year'' for
    ''Until the aggregate of amounts in the Farm Credit Insurance Fund
    exceeds the secure base amount, the annual premium due from any
    insured System bank for any calendar year''.
      Subsec. (a)(2), (3). Pub. L. 104-105, Sec. 215(a)(1)(B), (C),
    added par. (2) and redesignated former par. (2) as (3).
      Subsec. (b). Pub. L. 104-105, Sec. 215(a)(2)(A), substituted
    ''Farm Credit Insurance Fund'' for ''Insurance Fund'' in two
    places, and ''subsection (a)(1) of this section'' for ''subsection
    (a) of this section'', and struck out ''for the following calendar
    year'' after ''each insured System bank''.
      Subsec. (d). Pub. L. 104-105, Sec. 215(c), in introductory
    provisions, substituted ''subsections (a), (c), and (e) of this
    section'' for ''subsections (a) and (c) of this section'' and ''an
    insured System bank'' for ''a Farm Credit Bank'', and in pars. (1)
    through (3), substituted ''insured System bank'' for ''Farm Credit
    Bank''.
      Subsec. (e). Pub. L. 104-105, Sec. 215(b), added subsec. (e).
      1989 - Subsec. (a). Pub. L. 101-220, Sec. 6(a)(1), added subsec.
    (a) and struck out former subsec. (a) which read as follows:
    ''Until the aggregate of amounts in the Farm Credit Insurance Fund
    exceeds the secure base amount, the annual premium due from any
    insured System bank for any calendar year shall be equal to the sum
    of -
        ''(1) the annual average principal outstanding for such year on
      loans made by the bank that are in accrual status, multiplied by
      0.0015; and
        ''(2) the annual average principal outstanding for such year on
      loans made by the bank that are in nonaccrual status, multiplied
      by 0.0025.''
      Subsec. (b). Pub. L. 101-220, Sec. 6(a)(2), inserted '', as
    determined under subsection (a) of this section,'' after ''calendar
    year''.
      Subsec. (c). Pub. L. 101-220, Sec. 6(a)(3), inserted ''(adjusted
    downward to exclude an amount equal to the sum of (1) 90 percent of
    the guaranteed portions of principal outstanding on Federal
    Government-guaranteed loans in accrual status made by such banks
    and (2) 80 percent of the guaranteed portions of principal
    outstanding on State government-guaranteed loans in accrual status
    made by such banks, as determined by the Corporation)'' after
    ''such time''.
      Subsec. (d). Pub. L. 101-220, Sec. 6(a)(4), in introductory
    provisions, substituted ''subsections (a) and (c) of this section''
    for ''subsection (a) of this section'' and struck out
    ''intermediate term'' after ''outstanding on all'', inserted par.
    (1), and struck out former par. (1) which read as follows: ''by the
    production credit associations in the district in which such bank
    is located;''.
      1988 - Subsec. (d). Pub. L. 100-399, Sec. 302(c), substituted in
    introductory provisions ''intermediate term loans made by a Farm
    Credit Bank'' for ''loans made by a Federal intermediate credit
    bank''.
      Subsec. (d)(2). Pub. L. 100-399, Sec. 302(d), (e), substituted
    ''section 2015(b)(1)(B) of this title'' for ''section 2074(a)(2) of
    this title'' and ''Farm Credit Bank'' for ''Federal intermediate
    credit bank''.
      Subsec. (d)(3). Pub. L. 100-399, Sec. 302(e), substituted ''Farm
    Credit Bank'' for ''Federal intermediate credit bank''.
                      EFFECTIVE DATE OF 1989 AMENDMENT
      Amendment by Pub. L. 101-220 effective for insurance premiums due
    to the Farm Credit System Insurance Corporation under this chapter
    on or after Jan. 1, 1990, based on the loan volume of each bank for
    each calendar year beginning with calendar year 1989, and effective
    for the calculation of the initial premium payment required under
    section 2277a-5(c) of this title, see section 6(c) of Pub. L.
    101-220, set out as a note under section 2020 of this title.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective immediately after
    amendment made by section 401 of Pub. L. 100-233, which was
    effective 6 months after Jan. 6, 1988, see section 1001(b) of Pub.
    L. 100-399, set out as a note under section 2002 of this title.
    GAO REPORTS ON RISK-BASED INSURANCE PREMIUMS, ACCESS TO ASSOCIATION
             CAPITAL, SUPPLEMENTAL PREMIUMS, AND CONSOLIDATION
      Pub. L. 102-552, title II, Sec. 204, Oct. 28, 1992, 106 Stat.
    4106, as amended by Pub. L. 104-316, title I, Sec. 106(e), Oct. 19,
    1996, 110 Stat. 3831, provided that:
      ''(a) In General. - The Comptroller General of the United States
    may investigate, review, and evaluate the feasibility and
    appropriateness, and report to the Committee on Agriculture of the
    House of Representatives and the Committee on Agriculture,
    Nutrition, and Forestry of the Senate, on the advantages and
    disadvantages of providing the Farm Credit System Insurance
    Corporation with -
        ''(1) the authority to directly or indirectly assess
      associations to ensure that all System capital is available to
      prevent losses to investors, including a study of -
          ''(A) the effects of direct assessments by the Insurance
        Corporation on associations, including interest rate charges to
        borrowers;
          ''(B) the effects of requiring that banks pass along the cost
        of insurance premiums to owner associations and other financing
        institutions having a discount relationship with the bank;
          ''(C) the effects of requiring owner associations to purchase
        stock in the district bank, if needed, to prevent a bank from
        having to return to the Insurance Corporation for financial
        assistance once the assistance has been given;
          ''(D) the effects of the purchase of stock from funds of the
        association (through funds obtained from other than the
        district bank) or allowing the bank to increase the direct line
        of credit to the association in order to fund the purchase; and
          ''(E) the effect that authorizing the Insurance Corporation
        to assess the association could have on the association's
        incentives for building capital;
        ''(2) the authority to collect supplemental insurance premiums
      under certain circumstances, including a study of -
          ''(A) the possibility of the Insurance Fund being depleted
        more rapidly than it could be replenished under the current
        premium structure;
          ''(B) the effects of the depletion under alternate economic
        scenarios and the probability of the occurrence of each of
        those scenarios;
          ''(C) the effects on capital accumulation and interest rates
        of levying a supplemental premium; and
          ''(D) limitations on any authority to levy supplemental
        premiums and the underlying basis for the limitations; and
        ''(3) the authority to establish an insurance premium rate
      structure that would take into account, on an
      institution-by-institution basis, asset quality risk, interest
      rate risk, earnings, and capital.
      ''(b) Report on Consolidation. -
        ''(1) In general. - The Comptroller General of the United
      States shall evaluate and report to the Committee on Agriculture
      of the House of Representatives and the Committee on Agriculture,
      Nutrition, and Forestry of the Senate on whether there are likely
      to be benefits to farmer and rancher borrowers of the Farm Credit
      System institutions of merging the 10 district Farm Credit Banks
      (and the Federal Intermediate Credit Bank of Jackson) into fewer
      regional Farm Credit Banks.
        ''(2) Factors. - In preparing the report, the Comptroller
      General shall consider -
          ''(A) the potential reduction in services to farmers and
        ranchers;
          ''(B) the potential benefits of jointly providing services to
        farmers and ranchers among these proposed regional districts;
          ''(C) any economy of scale effects on a district-by-district
        basis;
          ''(D) the potential impact on the cooperative nature of the
        Farm Credit System;
          ''(E) the potential impact on bank and association
        relationships; and
          ''(F) the potential impact on System-wide bond issuances.
      ''(c) Potential Savings. - The Comptroller General of the United
    States shall evaluate and report to the appropriate committees of
    Congress on the potential savings to the Farm Credit System and its
    shareholders that might occur if System institutions and the Farm
    Credit Administration were required to comply with General Services
    Administration standards for office space, furniture, and
    equipment.
      ''(d) Deadline. - The reports required under this section shall
    be provided to Congress not later than 12 months after the date of
    enactment of this Act (Oct. 28, 1992).''
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2020, 2277a-5 of this
    title.
 
-CITE-
    12 USC Sec. 2277a-5                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part E - Farm Credit System Insurance Corporation
 
-HEAD-
    Sec. 2277a-5. Certification of premiums
 
-STATUTE-
    (a) Filing certified statement
      Annually, on a date to be determined in the sole discretion of
    the Board of Directors, each insured System bank that became
    insured before the beginning of the year shall file with the
    Corporation a certified statement showing -
        (1) the annual average principal outstanding on loans made by
      the bank that are in accrual status, including the nonguaranteed
      portions of government-guaranteed loans;
        (2) the annual average principal outstanding on the guaranteed
      portion of Federal Government-guaranteed loans (as defined in
      section 2277a-4(a)(3) of this title) that are in accrual status;
        (3) the annual average principal outstanding on State
      government-guaranteed loans (as defined in section 2277a-4(a)(3)
      of this title) that are in accrual status;
        (4) the annual average principal outstanding on loans that are
      in nonaccrual status; and
        (5) the amount of the premium due the Corporation from the bank
      for the year.
    (b) Contents and form of statement
      The certified statement required to be filed with the Corporation
    under subsection (a) of this section shall be in such form and set
    forth such supporting information as the Board of Directors shall
    prescribe, and shall be certified by the president of the bank or
    any other officer designated by its board of directors that to the
    best of the person's knowledge and belief the statement is true,
    correct, complete, and has been prepared in accordance with this
    part and all regulations issued thereunder.
    (c) Initial premium payment
      Each System bank shall pay to the Corporation the amount of the
    initial premium it is required to certify under subsection (a) of
    this section as soon as practicable after January 1, 1990, based on
    the application of section 2277a-4 of this title to the accruing
    loan volume of the bank for calendar year 1989.
    (d) Subsequent premium payments
      The premium payments required from insured System banks under
    subsection (a) of this section shall be made not less frequently
    than annually in such manner and at such time or times as the Board
    of Directors shall prescribe, except that the amount of the premium
    shall be established not later than 60 days after filing the
    certified statement setting forth the amount of the premium.
    (e) Regulations
      The Board of Directors shall prescribe all rules and regulations
    necessary for the enforcement of this section.  The Board of
    Directors may limit the retroactive effect, if any, of any of its
    rules or regulations.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.56, as added Pub. L. 100-233,
    title III, Sec. 302, Jan. 6, 1988, 101 Stat. 1612; amended Pub. L.
    100-399, title III, Sec. 302(f), Aug. 17, 1988, 102 Stat. 994; Pub.
    L. 101-624, title XVIII, Sec. 1835, Nov. 28, 1990, 104 Stat. 3833;
    Pub. L. 104-105, title II, Sec. 215(a)(2)(B), Feb. 10, 1996, 110
    Stat. 176.)
 
-MISC1-
                                 AMENDMENTS
      1996 - Subsec. (a)(2), (3). Pub. L. 104-105 substituted
    ''2277a-4(a)(3) of this title'' for ''2277a-4(a)(2) of this
    title''.
      1990 - Subsec. (a). Pub. L. 101-624 amended subsec. (a)
    generally.  Prior to amendment, subsec. (a) read as follows:
    ''Annually, on a date to be determined in the sole discretion of
    the Board of Directors, each insured System bank that became
    insured before the beginning of the year shall file with the
    Corporation a certified statement showing the annual average
    principal outstanding on loans made by the bank that are in accrual
    status, the annual average principal outstanding on loans that are
    in nonaccrual status, and the amount of the premium due the
    Corporation from the bank for such year.''
      1988 - Subsec. (a). Pub. L. 100-399 substituted ''of the year''
    for ''of such year''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2277a-6 of this title.
 
-CITE-
    12 USC Sec. 2277a-6                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part E - Farm Credit System Insurance Corporation
 
-HEAD-
    Sec. 2277a-6. Overpayment and underpayment of premiums; remedies
 
-STATUTE-
    (a) Overpayments
      The Corporation may refund to any insured System bank any premium
    payment made by the bank exceeding the amount due the Corporation.
    (b) Underpayments
      (1) Recovery
        The Corporation, in a suit brought at law or in equity in any
      court of competent jurisdiction, may recover from any insured
      System bank the amount of any unpaid premium lawfully payable by
      the bank to the Corporation, whether or not the bank has filed
      any certified statement under section 2277a-5 of this title, and
      whether or not suit has been brought to compel the bank to file
      any such statement.
      (2) Limitation
        Any action or proceeding for the recovery of any premium due
      the Corporation under paragraph (1), or for the recovery of any
      amount paid to the Corporation exceeding the amount due the
      Corporation, shall be brought within 5 years after the right
      accrued for which the claim is made.  If an insured System bank
      has filed with the Corporation a false or fraudulent certified
      statement with the intent to evade, in whole or in part, the
      payment of a premium, the claim shall not be deemed to have
      accrued until the Corporation discovers that the certified
      statement is false or fraudulent.
    (c) Failure to file statement or pay premium
      (1) Forfeiture of rights
        If any insured System bank fails to file any certified
      statement required to be filed by such bank under section 2277a-5
      of this title or fails to pay any premium required to be paid by
      such bank under any provision of this part, and if the bank does
      not correct such failure within 30 days after the Corporation
      gives written notice to an officer of the bank, citing this
      subsection and stating that the bank has failed to so file or pay
      as required by law, all the rights, privileges, and franchises of
      the bank granted to it under this chapter shall be thereby
      forfeited.
      (2) Enforcement
        The Corporation may bring an action to enforce this subsection
      against any such bank in any court of competent jurisdiction for
      the judicial district in which the bank is located.
      (3) Liability of directors
        Every director who participated in or assented to a failure
      (described in paragraph (1)) shall be held personally liable for
      all consequential damages.
    (d) Effect on other remedies
      The remedies provided in subsections (b) and (c) of this section
    shall not be construed as limiting any other remedies against any
    insured System bank, but shall be in addition thereto.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.57, as added Pub. L. 100-233,
    title III, Sec. 302, Jan. 6, 1988, 101 Stat. 1613; amended Pub. L.
    100-399, title III, Sec. 302(g), (h), Aug. 17, 1988, 102 Stat.
    994.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Subsec. (b)(1). Pub. L. 100-399, Sec. 302(g), struck out
    ''made any report of condition required under section 2277a-4 of
    this title or'' after ''bank has'' and ''make any such report or''
    after ''bank to''.
      Subsec. (b)(2). Pub. L. 100-399, Sec. 302(h), substituted ''bank
    has filed'' for ''bank has made or filed''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-CITE-
    12 USC Sec. 2277a-7                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part E - Farm Credit System Insurance Corporation
 
-HEAD-
    Sec. 2277a-7. General corporate powers
 
-STATUTE-
      On January 6, 1988, the Corporation shall become a body corporate
    and as such shall have the following powers:
      (1) Seal
        The Corporation may adopt and use a corporate seal.
      (2) Succession
        The Corporation may have succession until dissolved by an Act
      of Congress. The Corporation shall succeed to the rights of the
      Farm Credit System Assistance Board under agreements between the
      Farm Credit System Assistance Board and System institutions
      certifying the institutions as eligible to issue preferred stock
      pursuant to subchapter VI of this chapter on the termination of
      the Assistance Board on the date provided in section 2278a-12 of
      this title.
      (3) Contracts
        The Corporation may make contracts.
      (4) Legal actions
        (A) In general
          The Corporation may sue and be sued, complain and defend, in
        any court of law or equity, State or Federal.
        (B) Jurisdiction
          All suits of a civil nature at common law or in equity to
        which the Corporation shall be a party shall be deemed to arise
        under the laws of the United States, and the United States
        district courts shall have original jurisdiction thereof,
        without regard to the amount in controversy, and the
        Corporation, in any capacity, without bond or security, may
        remove any such action, suit, or proceeding from a State court
        to the United States district court for the district or
        division embracing the place where the same is pending by
        following any procedure for removal then in effect.
        (C) Attachment and execution
          No attachment or execution may be issued against the
        Corporation or its property before final judgment in any suit,
        action, or proceeding in any State, county, municipal, or
        United States court.
        (D) Agent for service of process
          The Board of Directors shall designate an agent on whom
        service of process may be made in any State or jurisdiction in
        which any insured System bank is located.
      (5) Officers and employees
        (A) In general
          The Corporation may appoint by its Board of Directors such
        officers and employees as are not otherwise provided for in
        this part, define their duties, fix their compensation, and
        require bonds of them and fix the penalty thereof, and dismiss
        at pleasure such officers or employees.
        (B) Employees of the United States
          Nothing in this chapter or any other Act shall be construed
        to prevent the appointment and compensation, as an officer or
        employee of the Corporation, of any officer or employee of the
        United States in any board, commission, independent
        establishment, or executive department thereof.
      (6) Bylaws
        The Corporation may prescribe, by its Board of Directors,
      bylaws not inconsistent with law, regulating the manner in which
      its general business may be conducted, and the privileges granted
      to it by law may be exercised and enjoyed.
      (7) Incidental powers
        The Corporation may exercise by its Board of Directors, or duly
      authorized officers or agents, all powers specifically granted by
      the provisions of this part, and such incidental powers as shall
      be necessary to carry out the powers so granted.
      (8) Information
        The Corporation may, when necessary, make examinations of, and
      require information and reports from, System institutions, as
      provided in this part.
      (9) Conservator or receiver
        The Corporation may act as a conservator or receiver.
      (10) Rules and regulations
        The Corporation may prescribe by its Board of Directors such
      rules and regulations as it considers necessary to carry out this
      part (except to the extent that authority to issue such rules and
      regulations has been expressly and exclusively granted to any
      other regulatory agency).
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.58, as added Pub. L. 100-233,
    title III, Sec. 302, Jan. 6, 1988, 101 Stat. 1614; amended Pub. L.
    100-399, title III, Sec. 302(i), Aug. 17, 1988, 102 Stat. 994; Pub.
    L. 102-237, title V, Sec. 502(j), Dec. 13, 1991, 105 Stat. 1869;
    Pub. L. 102-552, title II, Sec. 202(a), Oct. 28, 1992, 106 Stat.
    4105; Pub. L. 104-105, title II, Sec. 214(b), Feb. 10, 1996, 110
    Stat. 175.)
 
-MISC1-
                                 AMENDMENTS
      1996 - Par. (9). Pub. L. 104-105 added par. (9) and struck out
    heading and text of former par. (9). Text read as follows: ''The
    Corporation may act as receiver.''
      1992 - Par. (2). Pub. L. 102-552 inserted at end ''The
    Corporation shall succeed to the rights of the Farm Credit System
    Assistance Board under agreements between the Farm Credit System
    Assistance Board and System institutions certifying the
    institutions as eligible to issue preferred stock pursuant to
    subchapter VI of this chapter on the termination of the Assistance
    Board on the date provided in section 2278a-12 of this title.''
      1991 - Par. (4)(B). Pub. L. 102-237 inserted ''in any capacity,''
    after ''and the Corporation,''.
      1988 - Par. (5)(A). Pub. L. 100-399 struck out ''to'' before
    ''define'' and ''dismiss''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2278b-6 of this title.
 
-CITE-
    12 USC Sec. 2277a-8                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part E - Farm Credit System Insurance Corporation
 
-HEAD-
    Sec. 2277a-8. Conduct of corporate affairs; examination of System
        institutions
 
-STATUTE-
    (a) Conduct of corporate affairs
      (1) Fair administration
        The Board of Directors shall administer the affairs of the
      Corporation fairly and impartially and without discrimination.
      (2) Obligations and expenses
        The Board of Directors shall determine and prescribe the manner
      in which the obligations of the Corporation may be incurred and
      the expenses of the Corporation may be allowed and paid.
      (3) Use of mails
        The Corporation may use the United States mails in the same
      manner and under the same conditions as the executive departments
      of the Federal Government.
      (4) Use of information
        The Corporation, with the consent of any board, commission,
      independent establishment, or executive department of the Federal
      Government, including any field service thereof, may avail itself
      of the use of information, services, and facilities thereof in
      carrying out this part.
      (5) Use of Farm Credit Administration personnel
        To the extent practicable, the Corporation shall use the
      personnel and resources of the Farm Credit Administration to
      minimize duplication of effort and to reduce costs.
    (b) Examination of System institutions
      (1) Examination authority
        (A) In general
          If the Board of Directors considers it necessary to examine
        an insured System bank, a production credit association, an
        association making direct loans under the authority provided
        under section 2279b of this title, or any System institution in
        receivership, the Board may, using Farm Credit Administration
        examiners, conduct the examination using reports and other
        information on the System institution prepared or held by the
        Farm Credit Administration. Notwithstanding any other provision
        of this chapter, on cancellation of the charter of a System
        institution, the Corporation shall have authority to examine
        the system (FOOTNOTE 1) institution in receivership.  An
        examination shall be performed at such intervals as the
        Corporation shall determine.
       (FOOTNOTE 1) So in original.  Probably should be capitalized.
        (B) Request for additional examination or other information
          If the Board determines that such reports or information are
        not adequate to enable the Corporation to carry out the duties
        of the Corporation under this subsection, the Board shall
        request the Farm Credit Administration to examine or to obtain
        other information from or about the System institution and
        provide to the Corporation the resulting examination report or
        such other information.
      (2) Appointment of examiners
        If the Farm Credit Administration informs the Corporation that
      the Farm Credit Administration is unable to comply with a request
      made under paragraph (1)(B) with respect to a System institution,
      the Board may appoint examiners to examine the institution.
      (3) Powers and report
        Each examiner appointed under paragraph (2) shall make such
      examination of the affairs of the System institution as the Board
      may direct, and shall make a full and detailed report of the
      examination to the Corporation.
      (4) Appointment of claim agents
        The Board of Directors of the Corporation shall appoint claim
      agents who may investigate and examine all claims for insured
      obligations.
    (c) Oath, affirmations, and testimony
      In connection with examinations under this section, the
    Corporation or its designated representatives may administer oaths
    and affirmations, and may examine, take, and preserve testimony
    under oath, as to any matter with respect to the affairs of any
    such institution.
    (d) Cooperation with FCA examiners
      The examiners appointed by the Board of Directors shall cooperate
    to the maximum extent possible with examiners of the Farm Credit
    Administration to minimize duplication of effort and minimize
    costs.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.59, as added Pub. L. 100-233,
    title III, Sec. 302, Jan. 6, 1988, 101 Stat. 1615; amended Pub. L.
    101-220, Sec. 6(b)(3), Dec. 12, 1989, 103 Stat. 1880; Pub. L.
    102-552, title II, Sec. 203, title V, Sec. 513(a), Oct. 28, 1992,
    106 Stat. 4106, 4133; Pub. L. 104-105, title II, Sec. 216, Feb. 10,
    1996, 110 Stat. 179.)
 
-MISC1-
                                 AMENDMENTS
      1996 - Subsec. (b)(1)(A). Pub. L. 104-105 inserted at end
    ''Notwithstanding any other provision of this chapter, on
    cancellation of the charter of a System institution, the
    Corporation shall have authority to examine the system institution
    in receivership.  An examination shall be performed at such
    intervals as the Corporation shall determine.''
      1992 - Pub. L. 102-552, Sec. 513(a)(1), substituted ''System
    institutions'' for ''insured System banks'' in section catchline.
      Subsec. (a)(5). Pub. L. 102-552, Sec. 203, added par. (5).
      Subsec. (b). Pub. L. 102-552, Sec. 513(a)(2), added subsec. (b)
    and struck out former subsec. (b) which read as follows: ''(b)
    Examination of Insured System Banks. -
        ''(1) Appointment of examiners. - The Board of Directors may
      appoint examiners who may, on behalf of the Corporation, examine
      any insured System bank, any production credit association, any
      other association making direct loans under authority provided
      under section 2279b of this title, and any System institution in
      receivership, if in the judgment of the Board of Directors an
      examination of the institution is necessary.
        ''(2) Powers and report. - Each examiner may make a thorough
      examination of all affairs of the institution, and shall make a
      full and detailed report of the condition of the institution to
      the Corporation.
        ''(3) Appointment of claim agents. - The Board of Directors, in
      like manner, shall appoint claim agents who may investigate and
      examine all claims for insured obligations.''
      1989 - Subsec. (b)(1). Pub. L. 101-220 inserted ''any other
    association making direct loans under authority provided under
    section 2279b of this title,'' after ''any production credit
    association,''.
                      EFFECTIVE DATE OF 1989 AMENDMENT
      Amendment by Pub. L. 101-220 effective for insurance premiums due
    to the Farm Credit System Insurance Corporation under this chapter
    on or after Jan. 1, 1990, based on the loan volume of each bank for
    each calendar year beginning with calendar year 1989, and effective
    for the calculation of the initial premium payment required under
    section 2277a-5(c) of this title, see section 6(c) of Pub. L.
    101-220, set out as a note under section 2020 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2254 of this title.
 
-CITE-
    12 USC Sec. 2277a-9                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part E - Farm Credit System Insurance Corporation
 
-HEAD-
    Sec. 2277a-9. Insurance Fund
 
-STATUTE-
    (a) Establishment
      There is hereby established a Farm Credit Insurance Fund
    (hereinafter referred to in this section as the ''Insurance Fund'')
    for insuring the timely payment of principal and interest on
    insured obligations.  The assets in the Fund shall be held by the
    Corporation for the uses and purposes of the Corporation.
    (b) Amounts in Fund
      (1) Revolving fund
        All amounts in the revolving fund established by section 2151
      of this title shall be transferred into the Farm Credit Insurance
      Fund on January 1, 1989, or 12 months after January 6, 1988,
      whichever is later, except that the obligations to, and rights
      of, any person in such revolving fund arising out of any event or
      transaction before January 6, 1988, shall remain unimpaired.
      (2) Deposit of premiums
        The Corporation shall deposit in the Insurance Fund all premium
      payments received by the Corporation under this part.
    (c) Uses of Fund
      (1) Mandatory use
        Beginning January 1, 1993, the Corporation shall expend amounts
      in the Insurance Fund to the extent necessary to insure the
      timely payment of interest and principal on insured obligations.
      (2) Other mandatory uses
        Beginning January 1, 1993, the Corporation shall use amounts in
      the Insurance Fund to -
          (A) satisfy System institution defaults through the purchase
        of preferred stock or other payments as provided for in section
        2278b-6(d)(3) of this title; and
          (B) ensure the retirement of eligible borrower stock at par
        value under section 2162 of this title.
      (3) Permissive uses
        The Corporation may expend amounts in the Insurance Fund to
      carry out section 2277a-10 of this title and to cover the
      operating costs of the Corporation.
      (4) Corporate payment or refunds
        The Corporation shall make all payments and refunds required to
      be made by the Corporation under this part from amounts in the
      Insurance Fund.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.60, as added Pub. L. 100-233,
    title III, Sec. 302, Jan. 6, 1988, 101 Stat. 1616; amended Pub. L.
    100-399, title III, Sec. 302(j)-(l), Aug. 17, 1988, 102 Stat. 994;
    Pub. L. 101-624, title XVIII, Sec. 1836(a), Nov. 28, 1990, 104
    Stat. 3833.)
 
-MISC1-
                                 AMENDMENTS
      1990 - Subsec. (c)(1), (2). Pub. L. 101-624 substituted ''January
    1, 1993'' for ''5 years after the date of the enactment of this
    part'' in par. (1) and for ''5 years after the date of enactment of
    this part'' in par. (2).
      1988 - Subsec. (b)(1). Pub. L. 100-399, Sec. 302(j), struck out
    ''(in effect immediately before January 6, 1988)'' after ''section
    2151 of this title''.
      Subsec. (b)(2). Pub. L. 100-399, Sec. 302(k), substituted ''The''
    for ''Beginning 5 years after January 6, 1988, the''.
      Subsec. (c)(2)(B). Pub. L. 100-399, Sec. 302(l), amended subpar.
    (B) generally.  Prior to amendment, subpar. (B) read as follows:
    ''ensure the retirement of borrower stock at par value and
    participation certificates or other similar equities at face value
    as provided for under section 2162(c)(2) of this title.''
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2278b-6, 2278b-11 of this
    title.
 
-CITE-
    12 USC Sec. 2277a-10                                         01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part E - Farm Credit System Insurance Corporation
 
-HEAD-
    Sec. 2277a-10. Powers of Corporation with respect to troubled
        insured System banks
 
-STATUTE-
    (a) Authority to provide assistance
      (1) Stand-alone assistance
        The Corporation, in its sole discretion and on such terms and
      conditions as the Board of Directors may prescribe, may make
      loans to, purchase the assets or securities of, assume the
      liabilities of, or make contributions to, any insured System bank
      if such action is taken -
          (A) to prevent the placing of the bank in receivership;
          (B) to restore the bank to normal operation; or
          (C) to reduce the risk to the Corporation posed by the bank
        when severe financial conditions threaten the stability of a
        significant number of insured System banks or of insured System
        banks possessing significant financial resources.
      (2) Facilitation of mergers or consolidation
        (A) In general
          To facilitate a merger or consolidation of a qualifying
        insured System bank, the sale of assets of such insured System
        bank to another insured System bank, the assumption of such
        insured System bank's liabilities by such other insured System
        bank, or the acquisition of the stock of such insured System
        bank by such other insured System bank, the Corporation, in its
        sole discretion and on such terms and conditions as the Board
        of Directors may prescribe, may -
            (i) purchase any such assets or assume any such
          liabilities;
            (ii) make loans or contributions to, or purchase debt
          securities of, such other insured System bank;
            (iii) guarantee such other insured System bank against loss
          by reason of such other insured System bank's merging or
          consolidating with, or assuming the liabilities and
          purchasing the assets of, such insured System bank; or
            (iv) take any combination of the actions referred to in the
          preceding clauses.
        (B) Qualifying insured System bank
          For purposes of subparagraph (A), the term ''qualifying
        insured System bank'' means any insured System bank that -
            (i) is in receivership;
            (ii) is, in the judgment of the Board of Directors, in
          danger of being placed in receivership; or
            (iii) is, in the sole discretion of the Corporation, an
          insured System bank that, when severe financial conditions
          exist that threaten the stability of a significant number of
          insured System banks or of insured System banks possessing
          significant financial resources, requires assistance under
          subparagraph (A) to lessen the risk to the Corporation posed
          by such insured System bank under such threat of instability.
      (3) Limitation
        (A) Least-cost resolution
          Assistance may not be provided to an insured System bank
        under this subsection unless the means of providing the
        assistance is the least costly means of providing the
        assistance by the Farm Credit Insurance Fund of all possible
        alternatives available to the Corporation, including
        liquidation of the bank (including paying the insured
        obligations issued on behalf of the bank).  Before making a
        least-cost determination under this subparagraph, the
        Corporation shall accord such other insured System banks as the
        Corporation determines to be appropriate the opportunity to
        submit information relating to the determination.
        (B) Determining least costly approach
          In determining the least costly alternative under
        subparagraph (A), the Corporation shall -
            (i) evaluate alternatives on a present-value basis, using a
          reasonable discount rate;
            (ii) document the evaluation and the assumptions on which
          the evaluation is based; and
            (iii) retain the documentation for not less than 5 years.
        (C) Time of determination
          (i) General rule
            For purposes of this subsection, the determination of the
          costs of providing any assistance under any provision of this
          section with respect to any insured System bank shall be made
          as of the date on which the Corporation makes the
          determination to provide the assistance to the institution
          under this section.
          (ii) Rule for liquidations
            For purposes of this subsection, the determination of the
          costs of liquidation of any insured System bank shall be made
          as of the earliest of -
              (I) the date on which a conservator is appointed for the
            insured System bank;
              (II) the date on which a receiver is appointed for the
            insured System bank; or
              (III) the date on which the Corporation makes any
            determination to provide any assistance under this section
            with respect to the insured System bank.
        (D) Rule for stand-alone assistance
          Before providing any assistance under paragraph (1), the
        Corporation shall evaluate the adequacy of managerial resources
        of the insured System bank.  The continued service of any
        director or senior ranking officer who serves in a policymaking
        role for the assisted insured System bank, as determined by the
        Corporation, shall be subject to approval by the Corporation as
        a condition of assistance.
        (E) Discretionary determinations
          Any determination that the Corporation makes under this
        paragraph shall be in the sole discretion of the Corporation.
        (F) Purchase of stock
          The Corporation may not use its authority under this
        subsection to purchase any stock of an insured System bank.
        The preceding sentence shall not be construed to limit the
        ability of the Corporation to enter into and enforce covenants
        and agreements that it determines to be necessary to protect
        the financial interests of the Corporation.
      (4) Subordination
        Any assistance provided under this subsection may be in
      subordination to the rights of owners of obligations and other
      creditors.
      (5) Reports
        The Corporation, in its annual report to Congress, shall report
      the total amount saved, or it estimates to be saved, by the
      Corporation exercising the authority provided to the Corporation
      in this subsection.
    (b) Authority to pledge or sell assets
      The Corporation, in its discretion, may make loans on the
    security of, or may purchase, and liquidate or sell, any part of
    the assets of, any insured System bank that is placed in
    receivership because of the inability of the bank to pay principal
    or interest on any of its notes, bonds, debentures, or other
    obligations in a timely manner.
    (c) Subrogation
      (1) In general
        On the payment to an owner of an insured obligation issued on
      behalf of an insured System bank in receivership, the Corporation
      shall be subrogated to all rights of the owner against the bank
      to the extent of the payment.
      (2) Receipt of dividends
        Subrogation under paragraph (1) shall include the right on the
      part of the Corporation to receive the same dividends from the
      proceeds of the assets of the bank as would have been payable to
      the owner on a claim for the insured obligation.
    (d) Right to assets
      Any agreement that shall diminish or defeat the right, title, or
    interest of the Corporation in any asset acquired by such
    Corporation under this section, either as security for a loan or by
    purchase, shall not be valid against the Corporation unless the
    agreement -
        (1) is in writing;
        (2) is executed by the bank and the person or persons claiming
      an adverse interest thereunder, including the obligor,
      contemporaneously with the acquisition of the asset by the bank;
        (3) has been approved by the board of directors of the bank or
      its loan committee, which approval shall be reflected in the
      minutes of the board or committee; and
        (4) has been, continuously, from the time of its execution, an
      official record of the bank.
    (e) Insured System bank
      As used in this section, the terms ''insured System bank'' and
    ''bank'' include each production credit association and other
    association making direct loans under the authority provided under
    section 2279b of this title.
    (f) Effective date
      The Corporation shall not exercise any authority under this
    section during the 5-year period prior to January 1, 1993.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.61, as added Pub. L. 100-233,
    title III, Sec. 302, Jan. 6, 1988, 101 Stat. 1616; amended Pub. L.
    101-220, Sec. 6(b)(4), Dec. 12, 1989, 103 Stat. 1880; Pub. L.
    101-624, title XVIII, Sec. 1836(b), Nov. 28, 1990, 104 Stat. 3833;
    Pub. L. 104-105, title II, Sec. 217, Feb. 10, 1996, 110 Stat. 179.)
 
-MISC1-
                                 AMENDMENTS
      1996 - Subsec. (a)(1). Pub. L. 104-105, Sec. 217(b)(1),
    substituted ''Stand-alone assistance'' for ''In general'' in par.
    heading.
      Subsec. (a)(2). Pub. L. 104-105, Sec. 217(b)(2)(A), substituted
    ''Facilitation of mergers or consolidation'' for ''Enumerated
    powers'' in par. heading.
      Subsec. (a)(2)(A). Pub. L. 104-105, Sec. 217(b)(2)(B),
    substituted ''In general'' for ''Facilitation of mergers or
    consolidation'' in subpar. heading.
      Subsec. (a)(3)(A). Pub. L. 104-105, Sec. 217(a)(2), added subpar.
    (A) and struck out heading and text of former subpar. (A). Text
    read as follows: ''Assistance shall not be provided to an insured
    System bank under this subsection if the amount of such assistance
    exceeds an amount determined by the Corporation to be the cost of
    liquidating the bank (including paying the insured obligations
    issued on behalf of the bank).  This subparagraph shall not apply
    to the provision of assistance to a bank if the Corporation
    determines that the continued operation of the bank is essential to
    provide adequate agricultural credit services in the area of
    operations of the bank.''
      Subsec. (a)(3)(B) to (F). Pub. L. 104-105, Sec. 217(a), added
    subpars. (B) to (E) and redesignated former subpar. (B) as (F).
      1990 - Subsec. (f). Pub. L. 101-624 substituted ''prior to
    January 1, 1993'' for ''beginning on the date of the enactment of
    this part''.
      1989 - Subsec. (e). Pub. L. 101-220 inserted ''and other
    association making direct loans under the authority provided under
    section 2279b of this title,'' after ''production credit
    association''.
                      EFFECTIVE DATE OF 1989 AMENDMENT
      Amendment by Pub. L. 101-220 effective for insurance premiums due
    to the Farm Credit System Insurance Corporation under this chapter
    on or after Jan. 1, 1990, based on the loan volume of each bank for
    each calendar year beginning with calendar year 1989, and effective
    for the calculation of the initial premium payment required under
    section 2277a-5(c) of this title, see section 6(c) of Pub. L.
    101-220, set out as a note under section 2020 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2271, 2277a-9 of this
    title.
 
-CITE-
    12 USC Sec. 2277a-10a                                        01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part E - Farm Credit System Insurance Corporation
 
-HEAD-
    Sec. 2277a-10a. Oversight actions by Corporation
 
-STATUTE-
    (a) ''Institution'' defined
      In this section, the term ''institution'' means -
        (1) an insured System bank; and
        (2) a production credit association or other association making
      loans under section 2279b of this title with a direct loan
      payable to the funding bank of the association that comprises 20
      percent or more of the funding bank's total loan volume net of
      nonaccrual loans.
    (b) Consultation regarding participation of undercapitalized banks
        in issuance of insured obligations
      The Farm Credit Administration shall consult with the Corporation
    prior to approving an insured obligation that is to be issued by or
    on behalf of, or participated in by, any insured System bank that
    fails to meet the minimum level for any capital requirement
    established by the Farm Credit Administration for the bank.
    (c) Consultation regarding applications for mergers and
        restructurings
      (1) Corporation to receive copy of transaction applications
        On receiving an application for a merger or restructuring of an
      institution, the Farm Credit Administration shall forward a copy
      of the application to the Corporation.
      (2) Consultation required
        If the proposed merger or restructuring involves an institution
      that fails to meet the minimum level for any capital requirement
      established by the Farm Credit Administration applicable to the
      institution, the Farm Credit Administration shall allow 30 days
      within which the Corporation may submit the views and
      recommendations of the Corporation, including any conditions for
      approval.  In determining whether to approve or disapprove any
      proposed merger or restructuring, the Farm Credit Administration
      shall give due consideration to the views and recommendations of
      the Corporation.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.61A, as added Pub. L. 104-105,
    title II, Sec. 218, Feb. 10, 1996, 110 Stat. 180.)
 
-CITE-
    12 USC Sec. 2277a-10b                                        01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part E - Farm Credit System Insurance Corporation
 
-HEAD-
    Sec. 2277a-10b. Authority to regulate golden parachute and
        indemnification payments
 
-STATUTE-
    (a) Definitions
      In this section:
      (1) Golden parachute payment
        The term ''golden parachute payment'' -
          (A) means a payment (or any agreement to make a payment) in
        the nature of compensation for the benefit of any
        institution-related party under an obligation of any Farm
        Credit System institution that -
            (i) is contingent on the termination of the party's
          relationship with the institution; and
            (ii) is received on or after the date on which -
              (I) the institution is insolvent;
              (II) a conservator or receiver is appointed for the
            institution;
              (III) the institution has been assigned by the Farm
            Credit Administration a composite CAMEL rating of 4 or 5
            under the Farm Credit Administration Rating System, or an
            equivalent rating; or
              (IV) the Corporation otherwise determines that the
            institution is in a troubled condition (as defined in
            regulations issued by the Corporation); and
          (B) includes a payment that would be a golden parachute
        payment but for the fact that the payment was made before the
        date referred to in subparagraph (A)(ii) if the payment was
        made in contemplation of the occurrence of an event described
        in any subclause of subparagraph (A); but
          (C) does not include -
            (i) a payment made under a retirement plan that is
          qualified (or is intended to be qualified) under section 401
          of title 26 or other nondiscriminatory benefit plan;
            (ii) a payment made under a bona fide supplemental
          executive retirement plan, deferred compensation plan, or
          other arrangement that the Corporation determines, by
          regulation or order, to be permissible; or
            (iii) a payment made by reason of the death or disability
          of an institution-related party.
      (2) Indemnification payment
        The term ''indemnification payment'' means a payment (or any
      agreement to make a payment) by any Farm Credit System
      institution for the benefit of any person who is or was an
      institution-related party, to pay or reimburse the person for any
      liability or legal expense with regard to any administrative
      proceeding or civil action instituted by the Farm Credit
      Administration that results in a final order under which the
      person -
          (A) is assessed a civil money penalty; or
          (B) is removed or prohibited from participating in the
        conduct of the affairs of the institution.
      (3) Institution-related party
        The term ''institution-related party'' means -
          (A) a director, officer, employee, or agent for a Farm Credit
        System institution or any conservator or receiver of such an
        institution;
          (B) a stockholder (other than another Farm Credit System
        institution), consultant, joint venture partner, or any other
        person determined by the Farm Credit Administration to be a
        participant in the conduct of the affairs of a Farm Credit
        System institution; and
          (C) an independent contractor (including any attorney,
        appraiser, or accountant) that knowingly or recklessly
        participates in any violation of any law or regulation, any
        breach of fiduciary duty, or any unsafe or unsound practice
        that caused or is likely to cause more than a minimal financial
        loss to, or a significant adverse effect on, the Farm Credit
        System institution.
      (4) Liability or legal expense
        The term ''liability or legal expense'' means -
          (A) a legal or other professional expense incurred in
        connection with any claim, proceeding, or action;
          (B) the amount of, and any cost incurred in connection with,
        any settlement of any claim, proceeding, or action; and
          (C) the amount of, and any cost incurred in connection with,
        any judgment or penalty imposed with respect to any claim,
        proceeding, or action.
      (5) Payment
        The term ''payment'' means -
          (A) a direct or indirect transfer of any funds or any asset;
        and
          (B) any segregation of any funds or assets for the purpose of
        making, or under an agreement to make, any payment after the
        date on which the funds or assets are segregated, without
        regard to whether the obligation to make the payment is
        contingent on -
            (i) the determination, after that date, of the liability
          for the payment of the amount; or
            (ii) the liquidation, after that date, of the amount of the
          payment.
    (b) Prohibition
      The Corporation may prohibit or limit, by regulation or order,
    any golden parachute payment or indemnification payment by a Farm
    Credit System institution (including any conservator or receiver of
    the Federal Agricultural Mortgage Corporation) in troubled
    condition (as defined in regulations issued by the Corporation).
    (c) Factors to be taken into account
      The Corporation shall prescribe, by regulation, the factors to be
    considered by the Corporation in taking any action under subsection
    (b) of this section.  The factors may include -
        (1) whether there is a reasonable basis to believe that an
      institution-related party has committed any fraudulent act or
      omission, breach of trust or fiduciary duty, or insider abuse
      with regard to the Farm Credit System institution involved that
      has had a material effect on the financial condition of the
      institution;
        (2) whether there is a reasonable basis to believe that the
      institution-related party is substantially responsible for the
      insolvency of the Farm Credit System institution, the appointment
      of a conservator or receiver for the institution, or the
      institution's troubled condition (as defined in regulations
      prescribed by the Corporation);
        (3) whether there is a reasonable basis to believe that the
      institution-related party has materially violated any applicable
      law or regulation that has had a material effect on the financial
      condition of the institution;
        (4) whether there is a reasonable basis to believe that the
      institution-related party has violated or conspired to violate -
          (A) section 215, 657, 1006, 1014, or 1344 of title 18; or
          (B) section 1341 or 1343 of title 18, affecting a Farm Credit
        System institution;
        (5) whether the institution-related party was in a position of
      managerial or fiduciary responsibility; and
        (6) the length of time that the party was related to the Farm
      Credit System institution and the degree to which -
          (A) the payment reasonably reflects compensation earned over
        the period of employment; and
          (B) the compensation represents a reasonable payment for
        services rendered.
    (d) Certain payments prohibited
      No Farm Credit System institution may prepay the salary or any
    liability or legal expense of any institution-related party if the
    payment is made -
        (1) in contemplation of the insolvency of the institution or
      after the commission of an act of insolvency; and
        (2) with a view to, or with the result of -
          (A) preventing the proper application of the assets of the
        institution to creditors; or
          (B) preferring 1 creditor over another creditor.
    (e) Rule of construction
      Nothing in this section -
        (1) prohibits any Farm Credit System institution from
      purchasing any commercial insurance policy or fidelity bond, so
      long as the insurance policy or bond does not cover any legal or
      liability expense of an institution described in subsection
      (a)(2) of this section; or
        (2) limits the powers, functions, or responsibilities of the
      Farm Credit Administration.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.61B, as added Pub. L. 104-105,
    title II, Sec. 218, Feb. 10, 1996, 110 Stat. 181.)
 
-CITE-
    12 USC Sec. 2277a-11                                         01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part E - Farm Credit System Insurance Corporation
 
-HEAD-
    Sec. 2277a-11. Investment of funds
 
-STATUTE-
      Money of the Corporation not otherwise employed shall be invested
    in obligations of the United States or in obligations guaranteed as
    to principal and interest by the United States.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.62, as added Pub. L. 100-233,
    title III, Sec. 302, Jan. 6, 1988, 101 Stat. 1618.)
 
-CITE-
    12 USC Sec. 2277a-12                                         01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part E - Farm Credit System Insurance Corporation
 
-HEAD-
    Sec. 2277a-12. Exemption from taxation
 
-STATUTE-
      Notwithstanding any other provision of law, the Corporation,
    including its franchise, and its capital, reserves, surplus, and
    income, shall be exempt from all taxation imposed by the United
    States, or by any State, county, municipality, or local taxing
    authority, except that any real property of the Corporation shall
    be subject to State, county, municipal, and local taxation to the
    same extent according to its value as other real property is taxed.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.63, as added Pub. L. 100-233,
    title III, Sec. 302, Jan. 6, 1988, 101 Stat. 1618.)
 
-CITE-
    12 USC Sec. 2277a-13                                         01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part E - Farm Credit System Insurance Corporation
 
-HEAD-
    Sec. 2277a-13. Reports
 
-STATUTE-
    (a) In general
      The Corporation annually shall prepare and submit to Congress a
    report of the operations of the Corporation, as soon as practicable
    after the first day of January in each calendar year.
    (b) Contents
      Reports submitted under subsection (a) of this section shall
    include information concerning the -
        (1) aggregate amount in the Insurance Fund at the close of the
      preceding calendar year;
        (2) projections of the costs to be incurred by the Corporation
      during the calendar year; and
        (3) estimates of the aggregate amount to be collected as
      premiums during the calendar year.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.64, as added Pub. L. 100-233,
    title III, Sec. 302, Jan. 6, 1988, 101 Stat. 1619.)
 
-CITE-
    12 USC Sec. 2277a-14                                         01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER V - FARM CREDIT ADMINISTRATION ORGANIZATION
    Part E - Farm Credit System Insurance Corporation
 
-HEAD-
    Sec. 2277a-14. Prohibitions
 
-STATUTE-
    (a) Corporate name
      (1) Use of corporate name
        It shall be unlawful for any person or entity to use the words
      ''Farm Credit System Insurance Corporation'' or any combination
      of such words that would have the effect of leading the public to
      believe that there is any connection between such person or
      entity and the Corporation, by virtue of the name under which
      such person or entity does business.
      (2) False representation
        (A) By outside person or entities
          It shall be unlawful for any person or entity to falsely
        represent by any device, that the notes, bonds, debentures, or
        other obligations of the person or entity are insured or in any
        way guaranteed by the Corporation.
        (B) System banks
          It shall be unlawful for any insured System bank or person
        that markets insured obligations to falsely represent the
        extent to which or the manner in which such obligations are
        insured by the Corporation.
      (3) Penalty
        Any person or entity that willfully violates any provision of
      this subsection shall be fined not more than $1,000, imprisoned
      for not more than 1 year, or both.
    (b) Payments or distributions while in default
      (1) In general
        It shall be unlawful for any insured System bank to pay any
      dividends on bank stock or participation certificates or interest
      on the capital notes or debentures of such bank (if such interest
      is required to be paid only out of net profits) or distribute any
      of the capital assets of such bank while the bank remains in
      default in the payment of any premium due to the Corporation.
      (2) Liability of directors
        Each director or officer of any insured System bank who
      willfully participates in the declaration or payment of any
      dividend or interest or in any distribution in violation of this
      subsection shall be fined not more than $1,000, imprisoned not
      more than 1 year, or both.
      (3) Applicability
        This subsection shall not apply to any default that is due to a
      dispute between the insured System bank and the Corporation over
      the amount of such premium if such bank deposits security
      satisfactory to the Corporation for payment on final
      determination of the issue.
    (c) Failure to file statement or pay premium
      (1) In general
        Any insured System bank that willfully fails or refuses to file
      any certified statement or pay any premium required under this
      part shall be subject to a penalty of not more than $100 for each
      day that such violations continue, which penalty the Corporation
      may recover for its use.
      (2) Applicability
        This subsection shall not apply to conduct with respect to any
      default that is due to a dispute between the insured System bank
      and the Corporation over the amount of such premium if such bank
      deposits security satisfactory to the Corporation for payment on
      final determination of the issue.
    (d) Employment of persons convicted of criminal offenses
      (1) In general
        Except with the prior written consent of the Farm Credit
      Administration, it shall be unlawful for any person convicted of
      any criminal offense involving dishonesty or a breach of trust to
      serve as a director, officer, or employee of any System
      institution.
      (2) Penalty
        For each willful violation of paragraph (1), the institution
      involved shall be subject to a penalty of not more than $100 for
      each day during which the violation continues, which the
      Corporation may recover for its use.
 
-SOURCE-
    (Pub. L. 92-181, title V, Sec. 5.65, as added Pub. L. 100-233,
    title III, Sec. 302, Jan. 6, 1988, 101 Stat. 1619; amended Pub. L.
    101-624, title XVIII, Sec. 1837, Nov. 28, 1990, 104 Stat. 3834;
    Pub. L. 102-237, title V, Sec. 502(k), Dec. 13, 1991, 105 Stat.
    1869.)
 
-MISC1-
                                 AMENDMENTS
      1991 - Subsec. (d)(1). Pub. L. 102-237 struck out ''insured''
    before ''System''.
      1990 - Subsec. (d)(1). Pub. L. 101-624, Sec. 1837(1), substituted
    ''insured System institution'' for ''insured System bank''.
      Subsec. (d)(2). Pub. L. 101-624, Sec. 1837(2), substituted
    ''institution'' for ''bank''.
 
-CITE-
    12 USC SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM      01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
    .
 
-HEAD-
    SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
 
-SECREF-
                  SUBCHAPTER REFERRED TO IN OTHER SECTIONS
      This subchapter is referred to in section 2277a-7 of this title.
 
-CITE-
    12 USC Part A - Assistance Board                             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
    Part A - Assistance Board
    .
 
-HEAD-
    Part A - Assistance Board
 
-CITE-
    12 USC Sec. 2278a                                            01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
    Part A - Assistance Board
 
-HEAD-
    Sec. 2278a. Establishment of Board
 
-STATUTE-
    (a) Charters
      On the date which is 15 days after January 6, 1988, the Farm
    Credit Administration shall revoke the charter of the Farm Credit
    System Capital Corporation (hereinafter referred to in this
    subchapter as the ''Capital Corporation'') and shall charter the
    Farm Credit System Assistance Board (hereinafter referred to in
    this chapter as the ''Assistance Board'') that, subject to this
    part, shall be a Federally chartered instrumentality of the United
    States.
    (b) Use of Capital Corporation staff
      During the 90-day period beginning on the date of the revocation
    of the charter of the Capital Corporation, the Assistance Board may
    temporarily employ, by contract or otherwise under reasonable and
    necessary terms and conditions, such staff of the Capital
    Corporation as is necessary to facilitate and effectuate an orderly
    transition to, and commencement of, the Assistance Board, and the
    termination of the affairs of the Capital Corporation.
 
-SOURCE-
    (Pub. L. 92-181, title VI, Sec. 6.0, as added Pub. L. 100-233,
    title II, Sec. 201, Jan. 6, 1988, 101 Stat. 1585.)
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2219c of this title.
 
-CITE-
    12 USC Sec. 2278a-1                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
    Part A - Assistance Board
 
-HEAD-
    Sec. 2278a-1. Purposes
 
-STATUTE-
      The purposes of the Assistance Board shall be to carry out a
    program to provide assistance to, and protect the stock of
    borrowers of, the institutions of the Farm Credit System, and to
    assist in restoring System institutions to economic viability and
    permitting such institutions to continue to provide credit to
    farmers, ranchers, and the cooperatives of such, at reasonable and
    competitive rates.
 
-SOURCE-
    (Pub. L. 92-181, title VI, Sec. 6.1, as added Pub. L. 100-233,
    title II, Sec. 201, Jan. 6, 1988, 101 Stat. 1585.)
 
-CITE-
    12 USC Sec. 2278a-2                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
    Part A - Assistance Board
 
-HEAD-
    Sec. 2278a-2. Board of Directors
 
-STATUTE-
    (a) Membership
      The Board of Directors of the Assistance Board (hereinafter
    referred to in this part as the ''Board of Directors'') shall
    consist of three members -
        (1) one of which shall be the Secretary of the Treasury;
        (2) one of which shall be the Secretary of Agriculture; and
        (3) one of which shall be an agricultural producer experienced
      in financial matters, and appointed by the President, by and with
      the advice and consent of the Senate.
    (b) Chairman
      The Board of Directors shall elect annually a Chairman from among
    the members of the Board.
    (c) Terms of office, succession, and vacancies
      (1) Terms of office and succession
        The term of each member of the Board of Directors shall expire
      when the Assistance Board is terminated.
      (2) Vacancies
        Vacancies on the Board of Directors shall be filled in the same
      manner as the vacant position was previously filled.
    (d) Compensation of Board members
      Members of the Board of Directors -
        (1) appointed under paragraphs (1) and (2) of subsection (a) of
      this section shall receive reasonable allowances for necessary
      expenses of travel, lodging, and subsistence incurred in
      attending meetings and other activities of the Assistance Board,
      as set forth in the bylaws issued by the Board of Directors,
      except that such level shall not exceed the maximum fixed by
      subchapter I of chapter 57 of title 5 for officers and employees
      of the United States; and
        (2) appointed under paragraph (3) of subsection (a) of this
      section shall receive compensation for the time devoted to
      meetings and other activities at a daily rate not to exceed the
      daily rate of compensation prescribed for Level III of the
      Executive Schedule under section 5314 of title 5 and reasonable
      allowances for necessary expenses of travel, lodging, and
      subsistence incurred in attending meetings and other activities
      of the Assistance Board, as set forth in the bylaws issued by the
      Board of Directors, except that such level shall not exceed the
      maximum fixed by subchapter I of chapter 57 of title 5 for
      officers and employees of the United States.
    (e) Rules and records
      The Board of Directors of the Assistance Board shall adopt such
    rules as it may deem appropriate for the transaction of the
    business of the Assistance Board, and shall keep permanent and
    accurate records and minutes of its acts and proceedings.
    (f) Quorum required
      A quorum shall consist of two members of the Board of Directors.
    All decisions of the Board shall require an affirmative vote of at
    least a majority of the members voting.
    (g) Chief executive officer
      A chief executive officer of the Assistance Board shall be
    selected by the Board of Directors of the Assistance Board and
    shall serve at the pleasure of the Board.
 
-SOURCE-
    (Pub. L. 92-181, title VI, Sec. 6.2, as added Pub. L. 100-233,
    title II, Sec. 201, Jan. 6, 1988, 101 Stat. 1586; amended Pub. L.
    102-237, title V, Sec. 502(l), Dec. 13, 1991, 105 Stat. 1869.)
 
-MISC1-
                                 AMENDMENTS
      1991 - Subsec. (d)(1), (2). Pub. L. 102-237 substituted
    ''subchapter I'' for ''subchapter 1''.
                      EFFECTIVE DATE OF 1991 AMENDMENT
      Amendment by Pub. L. 102-237 effective as if included in the
    provision of the Food, Agriculture, Conservation, and Trade Act of
    1990, Pub. L. 101-624, to which the amendment relates, see section
    1101(b)(4) of Pub. L. 102-237, set out as a note under section 1421
    of Title 7, Agriculture.
 
-CITE-
    12 USC Sec. 2278a-3                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
    Part A - Assistance Board
 
-HEAD-
    Sec. 2278a-3. Corporate powers
 
-STATUTE-
    (a) In general
      The Assistance Board shall be a body corporate that shall have
    the power to -
        (1) operate under the direction of its Board of Directors;
        (2) adopt, alter, and use a corporate seal, which shall be
      judicially noted;
        (3) provide for one or more vice presidents, a secretary, a
      treasurer, and such other officers, employees, and agents, as may
      be necessary, define their duties, and require surety bonds or
      make other provisions against losses occasioned by acts of such
      persons;
        (4) hire, promote, compensate, and discharge officers and
      employees of the Assistance Board, without regard to title 5,
      except that no such officer or employee shall receive an annual
      rate of basic pay in excess of the rate prescribed for Level III
      of the Executive Schedule under section 5314 of title 5;
        (5) prescribe by its Board of Directors its bylaws, that shall
      be consistent with law, and that shall provide for the manner in
      which -
          (A) its officers, employees, and agents are selected;
          (B) its property is acquired, held, and transferred;
          (C) its general operations are to be conducted; and
          (D) the privileges granted by law are exercised and enjoyed;
        (6) with the consent of any executive department or independent
      agency, use the information, services, staff, and facilities of
      such in carrying out this subchapter;
        (7) enter into contracts and make advance, progress, or other
      payments with respect to such contracts;
        (8) sue and be sued in its corporate name, and complain and
      defend in courts of competent jurisdiction;
        (9) acquire, hold, lease, mortgage, or dispose of, at public or
      private sale, real and personal property, and otherwise exercise
      all the usual incidents of ownership of property necessary and
      convenient to its operations;
        (10) obtain insurance against loss;
        (11) modify or consent to the modification of any contract or
      agreement to which it is a party or in which it has an interest
      under this subchapter;
        (12) deposit its securities and its current funds with any
      member bank of the Federal Reserve System or any insured State
      nonmember bank (within the meaning of section 1813 of this title)
      and pay fees therefor and receive interest thereon as may be
      agreed; and
        (13) exercise other powers as set forth in this subchapter, and
      such other incidental powers as are necessary to carry out its
      powers, duties, and functions in accordance with this subchapter.
    (b) Power to remove; jurisdiction
      Notwithstanding any other provision of law, any civil action,
    suit, or proceeding to which the Assistance Board is a party shall
    be deemed to arise under the laws of the United States, and the
    United States District Court for the District of Columbia shall
    have exclusive jurisdiction over such.  The Assistance Board may,
    without bond or security, remove any such action, suit, or
    proceeding from a State court to the United States District Court
    for the District of Columbia.
 
-SOURCE-
    (Pub. L. 92-181, title VI, Sec. 6.3, as added Pub. L. 100-233,
    title II, Sec. 201, Jan. 6, 1988, 101 Stat. 1587; amended Pub. L.
    100-399, title II, Sec. 201(a), (b), Aug. 17, 1988, 102 Stat. 990.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Subsec. (a)(12). Pub. L. 100-399, Sec. 201(a), substituted
    ''(within the meaning of section 1813 of this title)'' for ''(as
    defined in section 1813(b) of this title)''.
      Subsec. (b). Pub. L. 100-399, Sec. 201(b), substituted
    ''exclusive'' for ''original''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
        HIRING, PROMOTION, COMPENSATION, AND DISCHARGE OF EMPLOYEES
      Pub. L. 102-341, title VI, Aug. 14, 1992, 106 Stat. 906,
    provided: ''That officers and employees of the Farm Credit System
    Assistance Board shall be hired, promoted, compensated, and
    discharged in accordance with title 5, United States Code.''
      Similar provisions were contained in the following prior
    appropriation acts:
      Pub. L. 102-142, title VI, Oct. 28, 1991, 105 Stat. 910.
      Pub. L. 101-506, title V, Nov. 5, 1990, 104 Stat. 1345.
      Pub. L. 101-161, title V, Nov. 21, 1989, 103 Stat. 981.
      Pub. L. 100-460, title V, Oct. 1, 1988, 102 Stat. 2259.
 
-CITE-
    12 USC Sec. 2278a-4                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
    Part A - Assistance Board
 
-HEAD-
    Sec. 2278a-4. Certification of eligibility to issue preferred stock
 
-STATUTE-
    (a) Book value less than par value of stock and equities
      If the book value of the stock, participation certificates, and
    other similar equities of a System institution, based on generally
    accepted accounting principles, is less than the par value of the
    stock or the face value of the certificates or equities -
        (1) the Farm Credit Administration shall notify the Assistance
      Board of such impairment;
        (2) the Assistance Board shall monitor the financial condition,
      business plans, and operations of the institution; and
        (3) the institution may request the Assistance Board to grant
      certification to issue preferred stock under section 2278b-7(a)
      of this title.
    (b) Book value less than 75 percent of par value of stock and
        equities
      If the book value of the stock, participation certificates, and
    other similar equities of a System institution, based on generally
    accepted accounting principles, is less than 75 percent of the par
    value of the stock or the face value of the certificates or
    equities, the institution shall request the Assistance Board to
    grant certification to issue preferred stock under section
    2278b-7(a) of this title.
    (c) Mandatory determination of eligibility
      (1) In general
        The Assistance Board shall determine whether to certify a
      System institution as eligible to issue preferred stock under
      section 2278b-7 of this title, if -
          (A) the institution requests such certification;
          (B) the book value of the stock, participation certificates,
        and other similar equities of the institution, based on
        generally accepted accounting principles, has declined to 75
        percent of the par value of the stock or the face value of the
        certificates or equities; and
          (C) the institution agrees to meet the terms and conditions
        specified by the Assistance Board pursuant to section 2278a-6
        of this title.
      (2) Effective date of certification
        If the determination of the Assistance Board is to certify the
      institution under paragraph (1), such certification shall be
      effective at the time of such determination.
    (d) Implementation
      As soon as practicable after January 6, 1988, the Assistance
    Board shall take such actions as are necessary to carry out this
    section.
    (e) ''Other similar equities'' defined
      Except where otherwise provided in this chapter, the term ''other
    similar equities'' includes allocated equities.
 
-SOURCE-
    (Pub. L. 92-181, title VI, Sec. 6.4, as added Pub. L. 100-233,
    title II, Sec. 201, Jan. 6, 1988, 101 Stat. 1588; amended Pub. L.
    100-399, title II, Sec. 201(c), Aug. 17, 1988, 102 Stat. 991.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Subsecs. (c) to (e). Pub. L. 100-399 redesignated second
    subsec. (c) and subsec. (d) as (d) and (e), respectively.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2202c, 2278a-5, 2278a-6,
    2278b-7 of this title.
 
-CITE-
    12 USC Sec. 2278a-5                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
    Part A - Assistance Board
 
-HEAD-
    Sec. 2278a-5. Assistance
 
-STATUTE-
    (a) In general
      The Assistance Board shall assist an institution that has been
    certified under section 2278a-4 of this title by -
        (1) authorizing the institution to issue preferred stock under
      section 2278b-7 of this title, in amounts necessary to maintain
      the book value of stock, participation certificates, and other
      similar equities of the institution, at the level provided for in
      subsection (c) of this section;
        (2) in the case of high-cost debt for which the institution is
      primarily liable, authorizing the institution to issue preferred
      stock under section 2278b-7 of this title, in an amount equal to
      the premium that would be required by the holder of the debt for
      the institution to retire the debt at the then current market
      value;
        (3) on a request by the institution, authorizing the issuance
      of preferred stock under section 2278b-7 of this title to
      facilitate the merger of the requesting institution with one or
      more other System institutions; or
        (4) providing assistance by such other methods as the
      Assistance Board determines appropriate.
    (b) ''High-cost debt'' defined
      For purposes of subsection (a)(2) of this section, the term
    ''high-cost debt'' means securities or similar obligations issued
    before January 1, 1986, that mature on or after December 31, 1987,
    and bear a rate of interest in excess of the then current market
    rate for similar securities or obligations.
    (c) Minimum equity value
      The Assistance Board shall authorize a certified institution to
    issue amounts of preferred stock under section 2278b-7 of this
    title sufficient to -
        (1) maintain the value of stock, participation certificates and
      other similar equities at no less than 75 percent of the par
      value of the stock or the face value of the certificates or
      equities, as determined under generally accepted accounting
      principles; and
        (2) strengthen the institution to a point where it is
      economically viable, and capable of delivering credit at
      reasonable and competitive rates.
    (d) Limitation
      Except as provided in section 410(c) of the Agricultural Credit
    Act of 1987, no assistance shall be provided in connection with a
    merger until the stockholders and the institutions involved have
    approved the merger and the Farm Credit Administration has given
    final approval to the merger plan.
 
-SOURCE-
    (Pub. L. 92-181, title VI, Sec. 6.5, as added Pub. L. 100-233,
    title II, Sec. 201, Jan. 6, 1988, 101 Stat. 1588; amended Pub. L.
    100-399, title II, Sec. 201(d), (e), Aug. 17, 1988, 102 Stat. 991.)
 
-REFTEXT-
                             REFERENCES IN TEXT
      Section 410(c) of the Agricultural Credit Act of 1987, referred
    to in subsec. (d), is section 410(c) of Pub. L. 100-233, which is
    set out as a note under section 2011 of this title.
 
-MISC2-
                                 AMENDMENTS
      1988 - Subsecs. (a)(1) to (3), (c). Pub. L. 100-399, Sec. 201(e),
    struck out ''the appropriate provision of'' after ''under''
    wherever appearing.
      Subsec. (d). Pub. L. 100-399, Sec. 201(d), substituted ''Except
    as provided in section 410(c) of the Agricultural Credit Act of
    1987, no'' for ''No''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-CITE-
    12 USC Sec. 2278a-6                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
    Part A - Assistance Board
 
-HEAD-
    Sec. 2278a-6. Special powers
 
-STATUTE-
    (a) In general
      In the case of a System institution that requests certification
    under section 2278a-4 of this title, the Assistance Board may -
        (1) require the institution to obtain approval from the
      Assistance Board before implementing business, operating, and
      investment plans and policies;
        (2) if one or more of the conditions described in section
      2183(b) of this title are met, as determined by the Farm Credit
      Administration, direct the Farm Credit Administration Board to
      appoint a conservator for the institution, in accordance with
      such section, and to instruct the conservator to evaluate the
      operations of the institution and report to the Farm Credit
      Administration Board and the Assistance Board on the possibility
      of restoring the institution to sound financial condition;
        (3) request that the Farm Credit Administration Board or the
      Farm Credit Administration, as appropriate -
          (A) approve or require a merger or consolidation of the
        institution to the extent authorized under this chapter;
          (B) initiate action to appoint a receiver under section
        2183(b) of this title; or
          (C) exercise any enforcement power authorized under this
        chapter;
        (4) require the institution to obtain approval from the
      Assistance Board before setting the terms and conditions of any
      debt issuances of the institution;
        (5) require the institution to obtain approval from the
      Assistance Board before setting the policy on credit standards to
      be used, and the policy on rates of interest to be charged on
      loans, by the institution, including requiring that -
          (A) the institution set interest rates at levels necessary to
        ensure that the cost of money to the institution reflects the
        marginal cost to the institution of borrowing an additional
        amount of money at the time a new loan is made; and
          (B) loans primarily secured by real estate mortgages not
        exceed 85 percent of the appraised agricultural value of the
        real estate security, or 75 percent of the then current market
        value of the real estate security, whichever is greater;
        (6) require the institution to obtain approval from the
      Assistance Board for the design of management information and
      accounting systems at the institution, and of the continued use
      by the institution of regulatory accounting practices in
      accordance with sections 2159(b) and 2254(b) of this title;
        (7) require that the plans and policies of the institution
      resulting from the merger of System banks reduce the overhead
      costs of such institution, to the maximum extent practicable,
      with respect to the delivery of services to, and performance of
      duties for, System associations in the district;
        (8) require the institution to obtain approval from the
      Assistance Board of -
          (A) the hiring policies of the institution;
          (B) the compensation and retirement benefits of the chief
        executive officer, other managers, and directors of the
        institution;
          (C) any change in the management of the institution; and
          (D) policy decisions regarding continued employment and
        promotion of the officials referred to in subparagraph (B);
        (9) suspend for any period of time, or terminate, any
      certification granted to an institution under section 2278a-4 of
      this title if the Farm Credit Administration notifies the
      Assistance Board that the institution has substantially deviated
      from the institution's business plan or has failed to comply with
      a term or condition governing the use of any financial assistance
      provided to the institution under this subchapter; and
        (10) take such other action as the Assistance Board determines
      may be necessary to establish prudent operating practices at the
      institution and to return the institution to a sound financial
      condition.
    (b) Suspension of assistance
      (1) Notification
        The Assistance Board shall promptly notify the Farm Credit
      Administration of any action taken by the Assistance Board under
      subsection (a)(9) of this section.
      (2) Enforcement
        The Farm Credit Administration may use any of its enforcement
      powers, with respect to any institution to which the Assistance
      Board has provided assistance or has certified the institution to
      issue preferred stock under section 2278b-7 of this title, to
      obtain the compliance of the institution with the terms or
      conditions governing the use of financial assistance provided
      under this subchapter.
    (c) Undated letters of resignation
      The Assistance Board shall not, for any reason, request or
    require any member of the board of directors of any System
    institution to submit to the Assistance Board an undated letter of
    resignation.  Immediately after January 6, 1988, the Assistance
    Board shall destroy all such letters over which it has control.
    (d) Reports
      During the 5-year period beginning on January 6, 1988, the
    Assistance Board, in coordination with the Financial Assistance
    Corporation, shall report annually to the Committee on Agriculture
    of the House of Representatives and the Committee on Agriculture,
    Nutrition, and Forestry of the Senate on the extent to which System
    institutions translate the savings in the cost of the operations of
    such institutions due to the Federal assistance provided to the
    System under this subchapter into lower interest rates charged to
    System borrowers or enhanced financial solvency of such
    institutions.
 
-SOURCE-
    (Pub. L. 92-181, title VI, Sec. 6.6, as added Pub. L. 100-233,
    title II, Sec. 201, Jan. 6, 1988, 101 Stat. 1589; amended Pub. L.
    100-399, title II, Sec. 201(f)-(i), Aug. 17, 1988, 102 Stat. 991;
    Pub. L. 101-624, title XVIII, Sec. 1843(a)(2), Nov. 28, 1990, 104
    Stat. 3836.)
 
-MISC1-
                                 AMENDMENTS
      1990 - Subsec. (a)(8)(B). Pub. L. 101-624 struck out before
    semicolon at end ''notwithstanding the authority of the Farm Credit
    Administration to approve such matters''.
      1988 - Subsec. (a)(8)(B). Pub. L. 100-399, Sec. 201(f), struck
    out ''under sections 2226 and 2252(a)(15) of this title'' after
    ''such matters''.
      Subsec. (a)(9). Pub. L. 100-399, Sec. 201(g), struck out ''may''
    before ''suspend''.
      Subsec. (b)(1). Pub. L. 100-399, Sec. 201(h), substituted
    ''(a)(9)'' for ''(a)(8)''.
      Subsec. (b)(2). Pub. L. 100-399, Sec. 201(i), struck out ''the
    appropriate provision of'' after ''stock under''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2254, 2271, 2278a-4,
    2278a-7 of this title.
 
-CITE-
    12 USC Sec. 2278a-7                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
    Part A - Assistance Board
 
-HEAD-
    Sec. 2278a-7. Administration
 
-STATUTE-
    (a) Expenses
      The Financial Assistance Corporation shall pay the necessary and
    reasonable administrative expenses of the Assistance Board from
    funds in the Assistance Fund established in section 2278b-5 of this
    title.
    (b) Interim funding
      Before the availability of funding from the Assistance Fund, the
    Assistance Board may use the revolving fund established under
    section 2151 of this title.  Such amounts used shall be repaid to
    the revolving fund out of the Assistance Fund within the same
    fiscal year that such funds were received by the Assistance Board.
    (c) Assistance operations
      The Farm Credit Administration shall provide such personnel and
    facilities to the Assistance Board as the Farm Credit
    Administration considers are necessary to avoid unnecessary
    duplication and waste.
    (d) Access to FCA documents
      The Assistance Board shall have access to all reports of
    examination and supervisory documents of the Farm Credit
    Administration, and relevant supporting material, for the purpose
    of carrying out the special powers of the Assistance Board under
    section 2278a-6 of this title, under such terms and conditions,
    acceptable to the Farm Credit Administration Board, as are
    necessary and appropriate to protect the confidentiality of the
    documents and materials.
 
-SOURCE-
    (Pub. L. 92-181, title VI, Sec. 6.7, as added Pub. L. 100-233,
    title II, Sec. 201, Jan. 6, 1988, 101 Stat. 1591; amended Pub. L.
    100-399, title II, Sec. 201(j), Aug. 17, 1988, 102 Stat. 991.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Subsec. (d). Pub. L. 100-399 substituted ''material,'' for
    ''material'' and ''under such terms and conditions, acceptable''
    for ''under terms and conditions that are acceptable''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2151 of this title.
 
-CITE-
    12 USC Sec. 2278a-8                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
    Part A - Assistance Board
 
-HEAD-
    Sec. 2278a-8. Limitation of powers
 
-STATUTE-
    (a) Purposes
      The powers of the Assistance Board under this subchapter shall be
    exercised only for the purposes specified in this subchapter and
    shall not be exercised in a manner that would result in the
    Assistance Board supplanting the Farm Credit System lending
    institutions as the primary providers of credit and other financial
    services to farmers, ranchers, and the cooperatives of such.
    (b) Prohibition
      The powers of the Assistance Board under this subchapter shall
    not include the management, administration, or disposition of any
    loans or other assets owned by other System institutions, or the
    providing of technical assistance or other related services to
    other System institutions in connection with the administration of
    loans owned by such other institutions.
 
-SOURCE-
    (Pub. L. 92-181, title VI, Sec. 6.8, as added Pub. L. 100-233,
    title II, Sec. 201, Jan. 6, 1988, 101 Stat. 1591.)
 
-CITE-
    12 USC Sec. 2278a-9                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
    Part A - Assistance Board
 
-HEAD-
    Sec. 2278a-9. Succession
 
-STATUTE-
    (a) Assets and liabilities
      On the issuance by the Farm Credit Administration of the charter
    for the Assistance Board under this part, the Assistance Board
    shall succeed to the assets of and assume all debts, obligations,
    contracts, and other liabilities of the Capital Corporation,
    matured or unmatured, accrued, absolute, contingent or otherwise,
    and whether or not reflected or reserved against on balance sheets,
    books of account, or records of the Capital Corporation.
    (b) Contracts
      The existing contractual obligations, security instruments, and
    title instruments of the Capital Corporation shall, by operation of
    law and without any further action by the Farm Credit
    Administration, the Capital Corporation, or any court, become and
    be converted into obligations, entitlements, and instruments of the
    Assistance Board chartered under this part.
    (c) Adjustment of assessments
      Not later than 15 days after the issuance of the charter of the
    Assistance Board, the Board shall retire all debt and equity
    obligations issued to any System institution under section
    2216f(a)(14) or 2216g (FOOTNOTE 1) of this title (as in effect
    immediately before January 6, 1988) at the book value of such
    obligations (determined as of January 6, 1988) and shall pay such
    amounts to the holders of such debt and equity obligations.
       (FOOTNOTE 1) See References in Text note below.
    (d) Surplus funds
      To the extent that, on the extinguishing of liabilities assumed
    by the Assistance Board under this section, and on full performance
    or other final disposition of contract obligations of the
    Assistance Board, there remain surplus funds attributable to such
    obligations or contracts, the Assistance Board shall distribute
    such surplus funds among the System institutions that contributed
    funds to the Capital Corporation on the basis of the relative
    amount of funds so contributed by each institution.
    (e) Preservation agreements
      (1) Transfer of obligations
        Notwithstanding any other provision of this chapter or the
      terms and conditions of the Thirty-Seven Banks Capital
      Preservation Agreement, the Federal Land Banks Capital
      Preservation Agreement, the Federal Intermediate Credit Banks
      Capital Preservation Agreement, and the Banks for Cooperatives
      Loss Sharing Agreement -
          (A) at the time the receiving bank receives funds from the
        Financial Assistance Corporation in an equal and equivalent
        amount in accordance with this subsection, any amounts received
        by, or that remain accrued to, any System bank in accordance
        with the activation of any such agreement for the calendar
        quarter ending on September 30, 1986, shall be -
            (i) repaid to the contributing bank by the bank that
          received such payments; or
            (ii) cancelled;
          (B) on the date the Financial Assistance Corporation is
        chartered, the accounts payable of each contributing bank under
        such agreements for the calendar quarter ending on September
        30, 1986, shall, by operation of law and without any further
        action by such contributing bank, any other bank, or any court,
        become and be converted into accounts payable of the Financial
        Assistance Corporation to each receiving bank under such
        agreement for such calendar quarter in the same amounts as
        previously carried on the books of each such receiving bank;
        and
          (C) on the date the Financial Assistance Corporation is
        chartered, the accounts receivable of each receiving bank under
        such agreements for the calendar quarter ending September 30,
        1986, shall, by operation of law and without any further action
        by such receiving bank or any other bank, or any court, become
        and be converted into accounts receivable to such receiving
        bank from the Financial Assistance Corporation, in the same
        amount as previously carried on the books of such receiving
        bank and such receivables shall, for all financial reporting
        purposes, be accounted for as an asset on the books of such
        receiving bank in accordance with generally accepted accounting
        practices.
      (2) Payments to receiving banks
        (A) Not later than 30 days after the first issuance of
      obligations by the Financial Assistance Corporation in accordance
      with section 2278b-6 of this title, the Corporation shall pay to
      each receiving bank such sums as are necessary to permit each
      receiving bank to repay, in accordance with paragraph (1), the
      amounts each such receiving bank received under any such
      agreement.
        (B) The accruals shall be paid by the Corporation to each
      receiving bank for the actual net loan charge-offs recorded on
      the books of each such bank before January 1, 1993, not
      previously paid by the contributing banks.
      (3) Debt obligations
        (A) Issuance
          For the purpose of obtaining funds to carry out this
        subsection, the Financial Assistance Corporation shall issue
        debt obligations under section 2278b-6 of this title.  Such
        obligations shall be subject to the terms and conditions of
        such section, except as provided for in this paragraph.
        (B) Payment of interest
          During each year of the 15-year period of such obligation
        issued pursuant to subparagraph (A), the banks operating under
        this chapter shall pay to the Financial Assistance Corporation,
        at such times as the Corporation shall determine, an amount
        equal to the entire amount of interest due on such obligation.
        Each bank shall pay a proportion of such interest equal to -
            (i) the average accruing loan volume of the bank during the
          year preceding the year of such payment; divided by
            (ii) the average accruing loan volume of all of the banks
          of the System for the same period.
        (C) Payment of principal
          (i) In general
            After the end of the 15-year period beginning on the date
          of the issuance of any obligation issued to carry out this
          subsection, the banks operating under this chapter shall pay
          to the Financial Assistance Corporation, on demand, an amount
          equal to the outstanding principal of the obligation.  Each
          bank shall pay a proportion of the principal equal to -
              (I) the average accruing loan volume of the bank for the
            preceding 15 years; divided by
              (II) the average accruing loan volume of all banks of the
            System for the same period.
          (ii) Banks leaving system
            Any bank leaving the Farm Credit System pursuant to section
          2279d of this title shall be required, under regulations of
          the Farm Credit Administration, to pay to the Financial
          Assistance Corporation the estimated present value of the
          payment required under this subparagraph had the bank
          remained in the System.
          (iii) Banks undergoing liquidation
            With respect to any bank undergoing liquidation under this
          chapter, a liability to the Financial Assistance Corporation
          in the amount of the payment required under this subparagraph
          (calculated as if the bank had left the System on the date it
          was placed in liquidation) shall be recognized as a claim in
          favor of the Financial Assistance Corporation against the
          estate of the bank.
          (iv) Obligations of other banks
            The obligations of other banks shall not be reduced in
          anticipation of any recoveries under this subparagraph from
          banks leaving the System or in liquidation, but the Financial
          Assistance Corporation shall apply the recoveries, when
          received, and all earnings on the recoveries, to reduce the
          other banks' payment obligations, or, to the extent the
          recoveries are received after the other banks have met their
          entire payment obligation, shall refund the recoveries, when
          received, to the other banks in proportion to the other
          banks' payments.
        (D) Annual payments
          (i) In general
            In order to provide for the orderly funding and discharge
          over time of the obligation of each System bank to the
          Financial Assistance Corporation under subparagraph (C), each
          System bank shall enter into or continue in effect an
          agreement with the Financial Assistance Corporation under
          which the bank will make annual annuity-type payments to the
          Financial Assistance Corporation, beginning no later than
          December 31, 1992 (except for any bank that did not meet its
          interim capital requirement on December 31, 1990, in which
          case the bank shall begin making the payments no later than
          December 31, 1993) in amounts designed to accumulate, in
          total, including earnings on the amounts, to 90 percent of
          the bank's ultimate obligation.  The Financial Assistance
          Corporation shall partially discharge the bank from its
          obligation under subparagraph (C) to the extent of each such
          payment and the earnings on the payment as earned.
          (ii) Capital requirements
            The agreement shall not require payments to be made to the
          extent that making a particular payment or part of a payment
          would cause the bank to fail to satisfy applicable regulatory
          permanent capital requirements, but shall provide for
          recalculation of subsequent payments accordingly.
          (iii) Investment; availability
            The funds received by the Financial Assistance Corporation
          pursuant to the agreements shall be invested in eligible
          investments as defined in section 2278b-5(a)(1) of this
          title.  The funds and the earnings on the funds shall be
          available only for the payment of the principal of the bonds
          issued by the Financial Assistance Corporation under this
          subsection.
        (E) Financial reporting
          Until each obligation issued in accordance with this
        subsection reaches maturity, for all financial reporting
        purposes, such obligation shall be considered to be the sole
        obligation of the Financial Assistance Corporation and shall
        not be considered a liability of any System bank, nor shall the
        obligation to make future annuity payments to the Financial
        Assistance Corporation under subparagraph (D) be considered a
        liability of any System bank.
      (4) Funds not considered financial assistance
        The funds made available to each bank, whether through the
      issuance of stock or otherwise, by the Financial Assistance
      Corporation to meet obligations under any agreement referred to
      in paragraph (1) or to meet any obligations of the contributing
      banks under any such agreement, as required by this subsection,
      shall not be considered financial assistance under this chapter.
      (5) Suspension of preservation agreements
        During the 5-year period beginning on January 6, 1988, and
      thereafter whenever funds from the Farm Credit System Insurance
      Fund are available for use in assisting System institutions to
      meet their obligations on their debt instruments, activation of
      the Thirty-Seven Banks Capital Preservation Agreement, the
      Federal Land Banks Capital Preservation Agreement, the Federal
      Intermediate Credit Banks Capital Preservation Agreement, and the
      Banks for Cooperatives Loss Sharing Agreement shall be suspended,
      in exchange for the benefits flowing to the signatories to such
      agreements under the Agricultural Credit Act of 1987.
 
-SOURCE-
    (Pub. L. 92-181, title VI, Sec. 6.9, as added Pub. L. 100-233,
    title II, Sec. 201, Jan. 6, 1988, 101 Stat. 1591; amended Pub. L.
    100-399, title II, Sec. 201(k), (l), Aug. 17, 1988, 102 Stat. 991;
    Pub. L. 102-552, title III, Sec. 301, Oct. 28, 1992, 106 Stat.
    4107.)
 
-REFTEXT-
                             REFERENCES IN TEXT
      Sections 2216f and 2216g of this title, referred to in subsec.
    (c), were repealed by Pub. L. 100-233, title II, Sec. 207(a)(3),
    Jan. 6, 1988, 101 Stat. 1607, effective 15 days after Jan. 6, 1988.
      The Agricultural Credit Act of 1987, referred to in subsec.
    (e)(5), is Pub. L. 100-233, Jan. 6, 1988, 101 Stat. 1568, as
    amended.  For complete classification of this Act to the Code see
    Short Title of 1988 Amendment note set out under section 2001 of
    this title and Tables.
 
-MISC2-
                                 AMENDMENTS
      1992 - Subsec. (e)(3)(C). Pub. L. 102-552, Sec. 301(1), added
    subpar. (C) and struck out former subpar. (C) which read as
    follows:
      ''(C) Payment of principal. - After the end of the 15-year period
    beginning on the date of the issuance of any obligation issued to
    carry out this subsection, the banks operating under this chapter
    shall pay to the Financial Assistance Corporation, on demand, an
    amount equal to the outstanding principal of such obligation.  Each
    bank shall pay a proportion of such principal equal to -
        ''(i) the average accruing loan volume of the bank for the
      preceding 15 years; divided by
        ''(ii) the average accruing loan volume of all banks of the
      System for the same period.''
      Subsec. (e)(3)(D). Pub. L. 102-552, Sec. 301(2), (3), added
    subpar. (D) and redesignated former subpar. (D) as (E).
      Subsec. (e)(3)(E). Pub. L. 102-552, Sec. 301(2), (4),
    redesignated subpar. (D) as (E) and inserted before period at end
    '', nor shall the obligation to make future annuity payments to the
    Financial Assistance Corporation under subparagraph (D) be
    considered a liability of any System bank''.
      1988 - Subsec. (a). Pub. L. 100-399, Sec. 201(k), inserted in
    heading ''Assets and''.
      Subsec. (e)(5). Pub. L. 100-399, Sec. 201(l), inserted
    ''activation of'' after ''instruments,'' and struck out closing
    quotation mark and following period, which for purposes of
    codification had been previously struck out requiring no change in
    text.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2278b-1, 2278b-6,
    2278b-9, 2278b-11 of this title.
 
-CITE-
    12 USC Sec. 2278a-10                                         01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
    Part A - Assistance Board
 
-HEAD-
    Sec. 2278a-10. Effect of regulations; audits
 
-STATUTE-
    (a) Issuance
      The Assistance Board may issue such regulations, policies,
    procedures, guidelines, or statements as the Board considers
    necessary or appropriate to carry out this subchapter, all of which
    shall be promulgated and enforced without regard to subchapter II
    of chapter 5 of title 5.
    (b) Regulation by Farm Credit Administration
      The Assistance Board shall not be subject to regulation by the
    Farm Credit Administration.
    (c) Audits
      The Assistance Board shall not require an audit or examination of
    a System institution that would be duplicative of an audit or
    examination that is conducted under other provisions of law.
 
-SOURCE-
    (Pub. L. 92-181, title VI, Sec. 6.10, as added Pub. L. 100-233,
    title II, Sec. 201, Jan. 6, 1988, 101 Stat. 1594.)
 
-CITE-
    12 USC Sec. 2278a-11                                         01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
    Part A - Assistance Board
 
-HEAD-
    Sec. 2278a-11. Exemption from taxation
 
-STATUTE-
      The Assistance Board, the capital, reserves, and surplus thereof,
    and the income derived therefrom, shall be exempt from Federal,
    State, municipal, and local taxation, except taxes on real estate
    held by the Assistance Board to the same extent, according to its
    value, as other similar property held by other persons is taxed.
 
-SOURCE-
    (Pub. L. 92-181, title VI, Sec. 6.11, as added Pub. L. 100-233,
    title II, Sec. 201, Jan. 6, 1988, 101 Stat. 1594.)
 
-CITE-
    12 USC Sec. 2278a-12                                         01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
    Part A - Assistance Board
 
-HEAD-
    Sec. 2278a-12. Termination
 
-STATUTE-
      The Assistance Board and the authority provided to the Assistance
    Board by this part shall terminate on December 31, 1992.
 
-SOURCE-
    (Pub. L. 92-181, title VI, Sec. 6.12, as added Pub. L. 100-233,
    title II, Sec. 201, Jan. 6, 1988, 101 Stat. 1594; amended Pub. L.
    100-399, title II, Sec. 201(m), Aug. 17, 1988, 102 Stat. 991.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-399 inserted ''to the Assistance Board'' after
    ''provided''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2277a-7 of this title.
 
-CITE-
    12 USC Sec. 2278a-13                                         01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
    Part A - Assistance Board
 
-HEAD-
    Sec. 2278a-13. Transitional provisions
 
-STATUTE-
    (a) Exercise of powers
      The powers of the Assistance Board under this subchapter shall be
    exercised by the Farm Credit Administration Board until the
    issuance of the charter of the Assistance Board, or such later date
    not to exceed 30 days thereafter, as may be requested by the
    Assistance Board.
    (b) Limitation on assistance
      Any assistance provided to System institutions by the Farm Credit
    Administration in accordance with this section shall be provided
    from, and shall not exceed, the amounts contained in the revolving
    fund established under section 2151 of this title.
    (c) Issuance of stock
      Each institution that receives assistance from the Farm Credit
    Administration during the interim period specified in subsection
    (a) of this section, in consideration thereof, shall issue
    preferred stock to the Financial Assistance Corporation in an
    amount equal to the amount of such assistance.  Payments by the
    Financial Assistance Corporation under subsection (d) of this
    section shall be considered to be payments to each such institution
    for such stock.
    (d) Repayment
      The Financial Assistance Corporation shall pay to the Farm Credit
    Administration, for return to the revolving fund established under
    section 2151 of this title, the full amount of all financial
    assistance provided by the Farm Credit Administration in accordance
    with this section, from the proceeds from the sale of the first
    issue of obligations by the Financial Assistance Corporation in
    accordance with section 2278b-6 of this title.
 
-SOURCE-
    (Pub. L. 92-181, title VI, Sec. 6.13, as added Pub. L. 100-233,
    title II, Sec. 201, Jan. 6, 1988, 101 Stat. 1594; amended Pub. L.
    100-399, title II, Sec. 201(n), Aug. 17, 1988, 102 Stat. 991.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Subsec. (d). Pub. L. 100-399 inserted '', for return to
    the revolving fund established under section 2151 of this title,''
    before ''the full''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2151 of this title.
 
-CITE-
    12 USC Part B - Financial Assistance Corporation             01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
    Part B - Financial Assistance Corporation
    .
 
-HEAD-
    Part B - Financial Assistance Corporation
 
-CITE-
    12 USC Sec. 2278b                                            01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
    Part B - Financial Assistance Corporation
 
-HEAD-
    Sec. 2278b. Establishment of Corporation
 
-STATUTE-
      Not later than 5 days after January 6, 1988, the Farm Credit
    Administration shall charter the Farm Credit System Financial
    Assistance Corporation (hereinafter referred to in this chapter as
    the ''Financial Assistance Corporation'') which shall be -
        (1) an institution of the Farm Credit System; and
        (2) a Federally chartered instrumentality of the United States.
 
-SOURCE-
    (Pub. L. 92-181, title VI, Sec. 6.20, as added Pub. L. 100-233,
    title II, Sec. 201, Jan. 6, 1988, 101 Stat. 1595.)
 
-MISC1-
                              FINANCIAL REPORT
      Section 206 of Pub. L. 100-233 provided that: ''During the period
    beginning September 30, 2001, and ending December 31, 2001, the
    Farm Credit Administration shall review and evaluate the financial
    condition of the Farm Credit System and report to the Secretary of
    the Treasury and the appropriate committees of Congress on -
        ''(1) the general financial condition of each System
      institution;
        ''(2) the total outstanding principal of debt obligations
      issued under section 6.26 of the Farm Credit Act of 1971 (as
      added by section 201 of this Act) (12 U.S.C. 2278b-6); and
        ''(3) the ability of each System institution to retire, at par
      value, preferred stock issued by the institution in accordance
      with section 6.27 of the Farm Credit Act of 1971 (as added by
      section 201 of this Act) (12 U.S.C. 2278b-7).''
 
-CITE-
    12 USC Sec. 2278b-1                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
    Part B - Financial Assistance Corporation
 
-HEAD-
    Sec. 2278b-1. Purpose
 
-STATUTE-
      The purpose of the Financial Assistance Corporation shall be to
    carry out a program to provide capital to institutions of the Farm
    Credit System that are experiencing financial difficulty and to
    assist, pursuant to section 2278a-9(e) of this title and
    subsections (c) through (g) of section 2278b-6 of this title, in
    the repayment by System institutions to those persons who provided
    funds in connection with the program.
 
-SOURCE-
    (Pub. L. 92-181, title VI, Sec. 6.21, as added Pub. L. 100-233,
    title II, Sec. 201, Jan. 6, 1988, 101 Stat. 1595; amended Pub. L.
    102-552, title III, Sec. 307(a), Oct. 28, 1992, 106 Stat. 4116.)
 
-MISC1-
                                 AMENDMENTS
      1992 - Pub. L. 102-552 inserted before period at end ''and to
    assist, pursuant to section 2278a-9(e) of this title and
    subsections (c) through (g) of section 2278b-6 of this title, in
    the repayment by System institutions to those persons who provided
    funds in connection with the program''.
 
-CITE-
    12 USC Sec. 2278b-2                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
    Part B - Financial Assistance Corporation
 
-HEAD-
    Sec. 2278b-2. Board of Directors
 
-STATUTE-
    (a) Board of Directors
      (1) Composition
        The Board of Directors of the Financial Assistance Corporation
      (hereinafter referred to in this part as the ''Board of
      Directors'') shall consist of the Board of Directors of the
      Federal Farm Credit Banks Funding Corporation.
      (2) Chairman
        The Board of Directors shall elect annually a Chairman from
      among the members of the Board.
      (3) Compensation
        The members of the Board of Directors shall receive
      compensation for the time devoted to meetings and other
      activities of the Board and reasonable allowances for necessary
      expenses of travel, lodging, and subsistence incurred in
      attending meetings and other activities of the Board of Directors
      in amounts not exceeding levels set by the Farm Credit
      Administration Board.
    (b) Rules and records
      The Board of Directors shall adopt such rules as it may deem
    appropriate for the transaction of its business and shall keep
    permanent and accurate records and minutes of its acts and
    proceedings.
    (c) Quorum required
      No business may be conducted at a meeting of the Board of
    Directors unless a quorum of the members of the Board is present,
    and a vote to approve an action requires a majority vote of the
    members voting.
    (d) Chief executive officer
      A chief executive officer of the Financial Assistance Corporation
    shall be selected by the Board of Directors and shall serve at the
    pleasure of the Board.
 
-SOURCE-
    (Pub. L. 92-181, title VI, Sec. 6.22, as added Pub. L. 100-233,
    title II, Sec. 201, Jan. 6, 1988, 101 Stat. 1595; amended Pub. L.
    100-399, title II, Sec. 201(o), Aug. 17, 1988, 102 Stat. 991.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Subsec. (a)(1). Pub. L. 100-399 substituted ''part'' for
    ''chapter''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-CITE-
    12 USC Sec. 2278b-3                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
    Part B - Financial Assistance Corporation
 
-HEAD-
    Sec. 2278b-3. Stock
 
-STATUTE-
      The Financial Assistance Corporation shall issue stock with a par
    value of $5 to System institutions, as provided for in this part,
    and such stock shall not be transferable, except in the event of a
    restructuring or liquidation to a successor System institution.
 
-SOURCE-
    (Pub. L. 92-181, title VI, Sec. 6.23, as added Pub. L. 100-233,
    title II, Sec. 201, Jan. 6, 1988, 101 Stat. 1595; amended Pub. L.
    102-237, title V, Sec. 502(m), Dec. 13, 1991, 105 Stat. 1869.)
 
-MISC1-
                                 AMENDMENTS
      1991 - Pub. L. 102-237 inserted before period at end '', except
    in the event of a restructuring or liquidation to a successor
    System institution''.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2278b-9 of this title.
 
-CITE-
    12 USC Sec. 2278b-4                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
    Part B - Financial Assistance Corporation
 
-HEAD-
    Sec. 2278b-4. Corporate powers
 
-STATUTE-
    (a) In general
      The Financial Assistance Corporation shall have the power to -
        (1) operate under the direction of its Board of Directors;
        (2) adopt, alter, and use a corporate seal, which shall be
      judicially noted;
        (3) provide for such officers, employees, and agents, including
      joint employees with the Funding Corporation, as may be
      necessary, define their duties, and require surety bonds or make
      other provisions against losses occasioned by acts of such
      persons;
        (4) adopt a salary scale for officers and employees of the
      Financial Assistance Corporation, in accordance with the
      directives of the Board of Directors;
        (5) prescribe by its Board of Directors bylaws, that are not
      inconsistent with law, and that shall provide for the manner in
      which -
          (A) its officers, employees, and agents are selected;
          (B) its property is acquired, held, and transferred;
          (C) its general business is conducted; and
          (D) the privileges granted by law are exercised and enjoyed;
        (6) enter into contracts and make advance, progress, or other
      payments with respect to such contracts;
        (7) sue and be sued in its corporate name and complain and
      defend in courts of competent jurisdiction;
        (8) acquire, hold, lease, mortgage, or dispose of, at public or
      private sale, real and personal property, and otherwise exercise
      all the usual incidents of ownership of property necessary and
      convenient to its business;
        (9) obtain insurance against loss;
        (10) modify or consent to the modification of any contract or
      agreement to which it is a party or in which it has an interest
      under this part;
        (11) borrow from any commercial bank on its own individual
      responsibility and on such terms and conditions as it may
      determine with the approval of the Farm Credit Administration;
        (12) deposit its securities and its current funds with any
      member bank of the Federal Reserve System or any insured State
      nonmember bank (within the meaning of section 1813 of this title)
      and pay fees therefor and receive interest thereon as may be
      agreed; and
        (13) exercise such other incidental powers as are necessary to
      carry out its powers, duties, and functions in accordance with
      its charter and this part.
    (b) Power to remove, and jurisdiction
      Notwithstanding any other provision of law, any civil action,
    suit, or proceeding to which the Financial Assistance Corporation
    is a party shall be deemed to arise under the laws of the United
    States, and the United States District Court for the District of
    Columbia shall have exclusive jurisdiction over such.  The
    Financial Assistance Corporation may, without bond or security,
    remove any such action, suit, or proceeding from a State court to
    the United States District Court for the District of Columbia.
 
-SOURCE-
    (Pub. L. 92-181, title VI, Sec. 6.24, as added Pub. L. 100-233,
    title II, Sec. 201, Jan. 6, 1988, 101 Stat. 1596; amended Pub. L.
    100-399, title II, Sec. 201(a), (b), Aug. 17, 1988, 102 Stat. 990.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Subsec. (a)(12). Pub. L. 100-399, Sec. 201(a), substituted
    ''(within the meaning of section 1813 of this title)'' for ''(as
    defined in section 1813(b) of this title)''.
      Subsec. (b). Pub. L. 100-399, Sec. 201(b), substituted
    ''exclusive'' for ''original''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2278b-6 of this title.
 
-CITE-
    12 USC Sec. 2278b-5                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
    Part B - Financial Assistance Corporation
 
-HEAD-
    Sec. 2278b-5. Accounts
 
-STATUTE-
    (a) Farm Credit Assistance Fund
      (1) Establishment
        The Financial Assistance Corporation shall establish an account
      called the Farm Credit Assistance Fund (referred to in this
      chapter as the ''Assistance Fund'') which shall be available to
      the Financial Assistance Corporation as a revolving fund to carry
      out this part.  The moneys of such Assistance Fund shall be
      invested in direct obligations of the United States or
      obligations guaranteed by the United States or an agency thereof.
      (2) Funding
        The Assistance Fund shall be funded through the issuance of
      debt obligations and payments, as provided in section 2278b-6 of
      this title, and payments, as provided in section 2278b-8 of this
      title.
    (b) Financial Assistance Corporation Trust Fund
      The Financial Assistance Corporation shall establish an account
    called the Financial Assistance Corporation Trust Fund (hereinafter
    referred to in this chapter as the ''Trust Fund'') that shall
    consist of securities of the United States Treasury purchased by
    the Financial Assistance Corporation with the funds received from
    the purchase of stock by System institutions from the Financial
    Assistance Corporation under section 2278b-9 of this title.
 
-SOURCE-
    (Pub. L. 92-181, title VI, Sec. 6.25, as added Pub. L. 100-233,
    title II, Sec. 201, Jan. 6, 1988, 101 Stat. 1597.)
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2278a-7, 2278a-9,
    2278b-6, 2278b-11, 2279d of this title.
 
-CITE-
    12 USC Sec. 2278b-6                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
    Part B - Financial Assistance Corporation
 
-HEAD-
    Sec. 2278b-6. Debt obligations
 
-STATUTE-
    (a) Issuance
      During the period beginning 61 days after January 6, 1988, and
    ending September 30, 1992, the Financial Assistance Corporation,
    subject to the approval of the Assistance Board, may issue
    uncollateralized bonds, notes, debentures, and similar obligations,
    guaranteed as to the timely payment of principal and interest by
    the Secretary of the Treasury as set forth in subsection (d) of
    this section, with semiannual interest coupon payments and a
    maturity period of 15 years -
        (1) in an aggregate amount not to exceed $2,800,000,000; and
        (2) beginning January 1, 1989, in an additional amount, not to
      exceed $1,200,000,000, if -
          (A) debt obligations have been issued by the Corporation to
        the full extent authorized under paragraph (1);
          (B) the Assistance Board determines that such additional
        funds are needed to carry out this subchapter; and
          (C) at least 90 days before the issuance of any debt
        obligations under this paragraph, the Assistance Board submits
        a report to Congress that sets forth the determination of the
        Assistance Board that such additional debt obligations should
        be issued, and that contains a detailed evaluation supporting
        the determination.
    (b) Conditions
      The debt obligations shall be in such forms and denominations,
    bear such rates of interest, be subject to such conditions, be
    issued in such manner, and be sold at such prices as may be
    prescribed by the Financial Assistance Corporation.
    (c) Interest payments
      (1) Payment of interest during first 5-year period
        During each year of the first 5-year period of the 10-year
      period beginning on the date of issuance of each obligation under
      subsection (a) of this section, the Financial Assistance
      Corporation shall pay, without recourse to System institutions,
      other than that described in paragraph (5), all of the interest
      due on such obligation.
      (2) Payment of interest during second 5-year period
        (A) In general
          During each year of the second 5-year period of the 10-year
        period beginning on the date of issuance of each obligation
        under subsection (a) of this section, the Financial Assistance
        Corporation shall pay all of the interest due on such
        obligation.
        (B) Payment by System banks to Financial Assistance Corporation
          During each year of the second 5-year period, System banks
        shall pay to the Financial Assistance Corporation 50 percent of
        the interest due on the obligations, except that System banks
        shall pay an additional 10 percent of the interest expense for
        each 1 percent that the unallocated retained earnings of the
        System (as determined under generally accepted accounting
        principles) exceed 5 percent of net assets (total assets less
        allowance for loan losses) based on a year-end financial
        statement for the preceding year.
        (C) Allocation
          During each year of the second 5-year period, each System
        bank shall pay to the Financial Assistance Corporation a
        proportion, as calculated by the Financial Assistance
        Corporation, of the interest due from System banks under this
        paragraph equal to -
            (i) the amount of the average accruing retail loan volume
          of the bank and its affiliated associations for the preceding
          year; divided by
            (ii) the total average accruing retail loan volume of all
          such banks and their affiliated associations for the
          preceding year.
      (3) Payments by Treasury
        The Secretary of the Treasury, in accordance with section
      2278b-8 of this title, shall pay to the Financial Assistance
      Corporation, in a timely manner, the balance of each interest
      payment not made by the System banks.
      (4) Payment of interest after first 10-year period
        During each year of the third 5-year period of the 15-year
      period beginning on the date of the issuance of each obligation
      under subsection (a) of this section, the Financial Assistance
      Corporation shall pay all of the interest due on such
      obligation.  During each year of such 5-year period, System banks
      shall pay the entire amount of interest due on the obligation
      allocated in the same manner as under paragraph (2)(C). Such
      payments shall be made to the Financial Assistance Corporation at
      such times as the Financial Assistance Corporation shall
      determine.
      (5) Repayment of Treasury-paid interest
        (A) In general
          On the maturity date of the last-maturing debt obligation
        issued under subsection (a) of this section, the Financial
        Assistance Corporation shall repay to the Secretary of the
        Treasury the total amount of any annual interest charges on the
        debt obligations that Farm Credit System institutions (other
        than the Financial Assistance Corporation) have not previously
        paid, and the Financial Assistance Corporation shall not be
        required to pay any additional interest charges on the
        payments.
        (B) Assessment
          In order to provide for the orderly funding by the banks of
        the System of the repayment by the Financial Assistance
        Corporation to the Secretary of the Treasury, the Financial
        Assistance Corporation shall assess each System bank, on or
        about December 31 of each year beginning in 1992, and each
        System bank shall promptly pay to the Financial Assistance
        Corporation, an annual annuity type payment in an amount
        designed to accumulate, in total, including earnings thereon,
        the amount of the bank's ultimate obligation (as determined by
        the Corporation on a fair and equitable basis), and no greater
        than .0006 nor less than .0004 times the bank's and its
        affiliated associations' average accruing retail loan volume
        for the preceding year, subject to -
            (i) upward or downward adjustment, as appropriate, by the
          Financial Assistance Corporation during each of the last 5
          years prior to the date the Financial Assistance Corporation
          is obligated to make the repayment, in order to ensure that
          the Financial Assistance Corporation will have the amount of
          funds needed to make the repayment on the due date; and
            (ii) reduction or termination in any year when the funds
          paid to the Financial Assistance Corporation, including any
          anticipated future earnings on the funds, are sufficient to
          make the repayment on the due date.
        (C) Investment of funds
          The Financial Assistance Corporation shall invest funds
        derived from the investment in eligible investments as defined
        in section 2278b-5(a)(1) of this title.  The funds and the
        earnings on the funds shall be available only for the repayment
        to the Secretary of the Treasury provided for in subparagraph
        (A).
        (D) Pass through
          A bank may (and, to the extent necessary to satisfy its
        obligations, shall) pass on (either directly, or indirectly
        through loan pricing or otherwise) all or part of the
        assessments to its affiliated direct lender associations based
        on proportionate average accruing retail loan volumes for the
        preceding year, but the bank shall remain primarily liable for
        the amounts.
        (E) Liability
          (i) Banks terminating System status or in liquidation
            Any bank terminating System status pursuant to section
          2279d of this title shall be required, under regulations of
          the Farm Credit Administration, to pay to the Financial
          Assistance Corporation the estimated present value of all
          future such assessments against the bank had the bank
          remained in the System. A liability to the Financial
          Assistance Corporation in this amount (calculated as if the
          bank had left the System on the date the bank was placed in
          liquidation) shall be recognized as a claim in favor of the
          Financial Assistance Corporation against the estate of any
          bank undergoing liquidation.
          (ii) No anticipatory reductions in other obligations
            The obligations of other banks shall not be reduced in
          anticipation of any recoveries under this subparagraph from
          banks leaving the System or in liquidation.
          (iii) Refund of recoveries
            The Financial Assistance Corporation shall apply the
          recoveries, when received, and all earnings on the
          recoveries, to reduce the other banks' payment obligations,
          or, to the extent the recoveries are received after the other
          banks have met their entire payment obligation, shall refund
          the recoveries, when received, to the other banks in
          proportion to the other banks' payments.
        (F) Associations terminating System status or in liquidation
          Any association terminating System status pursuant to section
        2279d of this title shall be required, under regulations of the
        Farm Credit Administration, to pay to its supervising bank a
        share, based on the association's retail loan volume relative
        to the retail loan volume of the bank and its affiliated
        associations had the association remained in the System, of the
        estimated present value of all future such assessments against
        the bank.  A liability to the bank in this amount (calculated
        as if the association had left the System on the date it was
        placed in liquidation) shall be recognized as a claim in favor
        of the bank against the estate of any association undergoing
        liquidation.
        (G) Capital requirements
          (i) In general
            Until the date that is 5 years prior to the date on which
          the Financial Assistance Corporation is required to repay the
          Secretary of the Treasury pursuant to subparagraph (A), all
          assessments paid by banks to the Financial Assistance
          Corporation pursuant to subparagraph (B), and any part of the
          obligation to pay future assessments to the Financial
          Assistance Corporation under subparagraph (B) that is
          recognized as an expense on the books of any System bank or
          association, shall nonetheless be included in the capital of
          the bank or association for purposes of determining its
          compliance with regulatory capital requirements.
          (ii) During the final 5 years prior to repayment
            During the -
              (I) period beginning 5 years, and ending 4 years, prior
            to the date on which the Financial Assistance Corporation
            is required to repay the Secretary of the Treasury pursuant
            to subparagraph (A), 60 percent;
              (II) period beginning 4 years, and ending 3 years, prior
            to the date on which the Financial Assistance Corporation
            is required to repay the Secretary of the Treasury pursuant
            to subparagraph (A), 30 percent; and
              (III) period beginning 3 years prior to the date on which
            the Financial Assistance Corporation is required to repay
            the Secretary of the Treasury pursuant to subparagraph (A),
            0 percent,
         of all assessments paid by banks to the Financial Assistance
          Corporation pursuant to subparagraph (B), and of any part of
          the obligation to pay future assessments to the Financial
          Assistance Corporation under subparagraph (B) that is
          recognized as an expense on the books of any System bank or
          association, shall nonetheless be included in the capital of
          the bank or association for purposes of determining its
          compliance with regulatory capital requirements.
    (d) Refinancing and payment of principal; defaults
      (1) In general
        (A) Time of repayment
          On maturity of an obligation issued under subsection (a) of
        this section, the obligation shall be repaid by the Financial
        Assistance Corporation.
        (B) Payments by institutions
          (i) In general
            Except as provided in subparagraph (C), in order to enable
          the Financial Assistance Corporation to repay the obligation
          referred to in subparagraph (A), each institution that issued
          preferred stock under section 2278b-7(a) of this title with
          respect to the obligation (or the successor to the
          institution) shall pay to the Financial Assistance
          Corporation, before the maturity date of the obligation, an
          amount equal to the par value of the stock outstanding for
          the institution.
          (ii) Annual appropriation
            Except as provided in clause (iii), each year beginning in
          1992, as soon as practicable following the end of the prior
          year, each such institution (except institutions in
          receivership and institutions that have previously redeemed
          their preferred stock) shall appropriate from its earnings in
          the prior year to an appropriated unallocated surplus account
          with respect to preferred stock, the sum of -
              (I) the greater of -
                (aa) such amount as the institution may be required to
              appropriate under any assistance agreement the
              institution has with the Farm Credit System Assistance
              Board or the Farm Credit System Insurance Corporation; or
                (bb) the amount that, if appropriated to the account in
              equal amounts in each year thereafter until the maturity
              of the obligation referred to in subparagraph (A), would
              cause the amount in the account to equal the par value of
              the preferred stock issued by the institution with
              respect to the obligation; plus
              (II) any amount that had been appropriated to the account
            in a previous year but had thereafter been offset by
            losses.
          (iii) Limitation
            An annual appropriation shall not be made to the extent
          that the appropriation would exceed the institution's net
          income (as determined pursuant to generally accepted
          accounting principles) in that year or to the extent that the
          appropriation would cause the institution's preferred stock
          to be impaired.
          (iv) Use
            The amount in the appropriated unallocated surplus account
          shall be unavailable to pay dividends or other allocations or
          distributions to shareholders or holders of participation
          certificates.  The account shall be senior to all other
          unallocated surplus accounts but junior to all preferred and
          common stock for purposes of the application of operating
          losses.
          (v) Preferred stock
            The appropriations of surplus by an institution shall not
          affect the treatment of its preferred stock (and of the
          appropriated unallocated surplus) as equity for purposes of
          regulatory permanent capital requirements.
        (C) Systemwide repayment
          (i) In general
            In order to enable the Financial Assistance Corporation to
          repay the obligations issued to provide assistance under
          subsections (c) and (e) of section 410 of the Agricultural
          Credit Act of 1987 (12 U.S.C. 2011 note) and section 2162(c)
          of this title, or issued to provide funds to cover the
          expenses of the Assistance Board or the Financial Assistance
          Corporation under sections 2278a-7(a) and 2278b-4,
          respectively, of this title, each System bank shall pay to
          the Financial Assistance Corporation a proportion, as
          calculated by the Financial Assistance Corporation, of the
          obligation equal to -
              (I) the average accruing retail loan volume of the bank
            and its affiliated associations for the preceding 15 years;
            divided by
              (II) the average accruing retail loan volume of all such
            banks and their affiliated associations for the same
            period.
          (ii) Expense item
            The annual increase in the present value of the estimated
          obligation of each bank to the Financial Assistance
          Corporation under this subparagraph shall be recorded each
          year as an expense item, in accordance with generally
          accepted accounting principles, on the books of the bank.
          (iii) Pass through
            A bank may (and, to the extent necessary to satisfy its
          obligations, shall) pass on (either directly, or indirectly
          through loan pricing or otherwise) all or part of the amount
          necessary to satisfy the payment requirement to its
          affiliated direct lender associations based on proportionate
          average accruing retail loan volumes for the preceding 15
          years, except that the bank shall remain primarily liable for
          the amount.
          (iv) Banks leaving System
            Any bank leaving the Farm Credit System pursuant to section
          2279d of this title shall be required, under regulations of
          the Farm Credit Administration, to pay to the Financial
          Assistance Corporation the estimated present value of the
          payment required under this subparagraph had the bank
          remained in the System. A liability to the Financial
          Assistance Corporation in this amount (calculated as if the
          bank had left the System on the date it was placed in
          liquidation) shall be recognized as a claim in favor of the
          Financial Assistance Corporation against the estate of any
          bank undergoing liquidation.  The obligations of other banks
          shall not be reduced in anticipation of any such recoveries
          from banks leaving the System or in liquidation, but the
          Financial Assistance Corporation shall apply the recoveries,
          when received, and all earnings on the recoveries, to reduce
          the other banks' payment obligations, or, to the extent the
          recoveries are received after the other banks have met their
          entire payment obligation, shall refund the recoveries, when
          received, to the other banks in proportion to the other
          banks' payments.
          (v) Associations terminating System status or in liquidation
            Any association leaving the Farm Credit System pursuant to
          section 2279d of this title shall be required, under
          regulations of the Farm Credit Administration, to pay to its
          supervising bank a share, based on the association's retail
          loan volume relative to the retail loan volume of the bank
          and its affiliated associations had the association remained
          in the System, of the present value of the future payment
          obligation of its supervising bank.  A liability to the bank
          in this amount (calculated as if the association had left the
          System on the date it was placed in liquidation) shall be
          recognized as a claim in favor of the bank against the estate
          of any association undergoing liquidation.
        (D) Funds for payments
          Payments under subparagraphs (B) and (C) shall be made by
        each such institution from the funds of the institution or from
        funds raised by the institution through the issuance of debt
        obligations, which may be issued without a collateral
        requirement and without any guarantee by the Secretary of the
        Treasury.
      (2) Refinanced obligations
        The refinanced obligations issued under paragraph (1) shall be
      solely the obligations of the institutions refinancing such, and
      sections 2154 and 2155 of this title shall not apply to such
      obligations.
      (3) Defaults
        (A) Certain principal and interest obligations
          (i) Payment by Corporation
            If a System bank defaults on the payment of interest due
          under subsection (c) of this section during the first 15
          years after an obligation is issued under subsection (a) of
          this section, on the payment of principal or interest due
          under subparagraphs (B) and (C) of section 2278a-9(e)(3) of
          this title, on the payment of principal due under paragraph
          (1)(C), or on the payment of an assessment due under
          subsection (c)(5)(B) of this section, the Financial
          Assistance Corporation shall pay the amount due by the System
          bank out of the Trust Fund, and shall recover the amount due
          from the defaulting System bank, and such amount shall be
          paid to the Trust Fund.
          (ii) Payment by Insurance Fund
            If the Financial Assistance Corporation has not recovered
          the full amount due from a defaulting bank by the end of the
          12-month period beginning on the date of default, any
          uncollected amount shall be paid to the Trust Fund from the
          Insurance Fund established under section 2277a-9 of this
          title, to the full extent of funds available in the Insurance
          Fund as of the date the Financial Assistance Corporation
          notified the Farm Credit System Insurance Corporation of
          amounts due under this section.
          (iii) Payment by remaining institutions
            To the extent that the payment from the Insurance Fund is
          insufficient to reimburse the Trust Fund, the remaining
          balance shall be allocated to other System banks in
          accordance with the allocation mechanism applicable under
          this chapter to the particular defaulted obligation.
        (B) Principal of bonds issued to fund purchase of preferred
            stock
          (i) Evaluation
            Not later than 90 days before the maturity of any
          obligation issued under subsection (a) of this section, the
          Farm Credit Administration shall complete an evaluation of
          the general financial condition of each System institution
          that issued preferred stock under section 2278b-7(a) of this
          title with respect to such obligation to determine whether
          such System institution will be able to redeem such stock at
          par value on the maturity of the obligation, and remain a
          viable institution capable of providing credit to eligible
          borrowers at equitable and competitive interest rates.
          (ii) Availability of evaluation
            A copy of the evaluation required under clause (i) shall be
          furnished to the Secretary of the Treasury and the
          appropriate committees of Congress.
          (iii) Redemption by institution; purchase by Secretary of the
              Treasury
            If the Farm Credit Administration determines, in
          consultation with the Secretary of the Treasury, on the basis
          of the evaluation required under clause (i), that the
          redemption of such stock at par value would impair the other
          stock or equities of such institution or render such
          institution incapable of meeting its capital adequacy
          standards, the institution shall be prohibited from redeeming
          the preferred stock it issued under section 2278b-7 of this
          title with respect to the maturing obligation.  If the Farm
          Credit Administration determines, in consultation with the
          Secretary of the Treasury, on the basis of the evaluation
          required under clause (i), that such institution will be able
          to redeem, in a timely manner and at par value, the preferred
          stock it issued under section 2278b-7 of this title with
          respect to the maturing obligation, and remain a viable and
          competitive institution, such institution shall have the
          option of redeeming or not redeeming such stock.  If such
          institution is prohibited from redeeming or elects not to
          redeem such stock, the Financial Assistance Corporation shall
          withdraw funds from the Trust Fund in an amount equal to the
          par value of the preferred stock issued by such institution
          under section 2278b-7 of this title so as to enable the
          Financial Assistance Corporation to pay the principal of the
          maturing obligation.  Simultaneously with such withdrawal of
          funds from the Trust Fund, the Financial Assistance
          Corporation shall transfer to the Insurance Fund an equal
          amount, at par value, of preferred stock of such
          institution.  To the extent that the Trust Fund is
          insufficient to enable the Financial Assistance Corporation
          to pay the full principal of the maturing obligation, the
          Insurance Fund shall be used by the Farm Credit System
          Insurance Corporation to purchase, at par value, the
          preferred stock issued by such institution under section
          2278b-7(a) of this title to enable the Financial Assistance
          Corporation to pay the principal of the maturing obligation.
          To the extent that the Insurance Fund is insufficient to
          enable the Financial Assistance Corporation to pay the full
          principal of the maturing obligation, the Secretary of the
          Treasury shall purchase, at par value, the remaining quantity
          of the preferred stock issued by such institution to enable
          the Financial Assistance Corporation to make such full
          payment.  For that purpose, the Secretary of the Treasury may
          use, as a public debt transaction, the proceeds from the sale
          of any securities issued under chapter 31 of title 31. The
          purposes for which such securities may be issued under such
          chapter are extended to include such purchases of stock.  Any
          preferred stock transferred to, or purchased by, the Farm
          Credit System Insurance Corporation under this clause shall
          be retired by the issuing institution at such times and under
          such terms and conditions as are agreed to between the
          Insurance Corporation and such institution.
        (C) Recourse by other System banks
          A defaulting bank shall be liable to the remaining System
        banks for any amounts paid by the remaining banks under this
        paragraph.
      (4) Payment by United States
        (A) Inability to pay
          Notwithstanding any other provision of this chapter, if the
        Financial Assistance Corporation is unable to pay the principal
        or interest of any obligation issued under subsection (a) of
        this section or section 2278a-9(e)(3)(A) of this title, the
        Secretary of the Treasury shall pay to the Financial Assistance
        Corporation the amount due which shall be used by the Financial
        Assistance Corporation to pay the obligation.
        (B) Recovery
          (i) Certain principal and interest obligations
            In each instance in which the Secretary of the Treasury is
          required to make a payment under subparagraph (A) to the
          Financial Assistance Corporation as a result of a default
          made by a System bank on interest due from such System bank
          under subsection (c) of this section, on the payment of
          principal or interest due under subparagraphs (B) and (C) of
          section 2278a-9(e)(3) of this title, on the payment of
          principal due under paragraph (1)(C), or on the payment of an
          assessment due under subsection (c)(5)(B) of this section,
          the Secretary of the Treasury shall recover the amount of the
          payments the Secretary made, with respect to each defaulting
          bank, from such defaulting bank.  If the Secretary has not
          recovered the full amount due from the defaulting bank by the
          end of the 12-month period beginning on the date of payment
          by the Secretary, the uncollected amount shall be paid to the
          Secretary from the Insurance Fund established under section
          2277a-9 of this title.
          (ii) Principal of bonds issued to fund purchase of preferred
              stock
            In each instance in which the Secretary of the Treasury is
          required under paragraph (3)(B)(iii) to purchase preferred
          stock issued by a System institution under section 2278b-7(a)
          of this title, the Farm Credit System Insurance Corporation
          shall use funds deposited in the Insurance Fund to
          repurchase, at par value, from the Secretary of the Treasury
          such stock required to be purchased under paragraph
          (3)(B)(iii) as funds become available for such repurchase.
          (iii) Priority
            Notwithstanding any other provision of this chapter except
          for section 2277a-9(c)(2)(B) of this title, during any year
          in which payments are due to the Secretary of the Treasury
          from the Insurance Fund under clause (i), or preferred stock
          held by the Secretary is due to be repurchased by the
          Insurance Fund under clause (ii), the funds in such Fund, and
          all funds deposited in such Fund during such year, shall be
          used first for the purposes specified in clauses (i) and
          (ii).
    (e) Administration
      (1) ''Retail loan volume'' defined
        As used in this section, the term ''retail loan volume'' means
      all loans (as defined in accordance with generally accepted
      accounting principles) by a System bank or association, excluding
      loans by such a bank or association to another System
      institution.
      (2) Calculation of average annual loan volumes
        For purposes of this section and section 2278a-9 of this title,
      average annual loan volumes shall be calculated using month-end
      balances.
      (3) Exclusion of banks undergoing liquidation
        For purposes of this section and section 2278a-9 of this title,
      the term ''bank'' shall not include a bank that had entered
      liquidation prior to October 28, 1992.
 
-SOURCE-
    (Pub. L. 92-181, title VI, Sec. 6.26, as added Pub. L. 100-233,
    title II, Sec. 201, Jan. 6, 1988, 101 Stat. 1597; amended Pub. L.
    100-399, title II, Sec. 201(p)-(x), Aug. 17, 1988, 102 Stat. 991,
    992; Pub. L. 102-552, title III, Sec. 302-304(a), 305, 306, Oct.
    28, 1992, 106 Stat. 4109-4111, 4114.)
 
-MISC1-
                                 AMENDMENTS
      1992 - Subsec. (c)(2)(B). Pub. L. 102-552, Sec. 305(1)(A), (B),
    substituted ''banks'' for ''institutions'' wherever appearing in
    heading and text.
      Subsec. (c)(2)(C), (D). Pub. L. 102-552, Sec. 305(1)(C), added
    subpar. (C) and struck out former subpars. (C) and (D) which read
    as follows:
      ''(C) Allocation. - During each year of the second 5-year period,
    each System institution shall pay to the Financial Assistance
    Corporation a proportion of the interest due from System
    institutions under this paragraph equal to -
        ''(i) the amount of the performing loan volume of the
      institution (based on the average loan volume for the preceding
      year); divided by
        ''(ii) the total performing loan volume of the System for the
      preceding year.
      ''(D) Special rule. - For purposes of determining the average
    loan volume of Farm Credit Banks, loan volume shall consist of
    loans made by such banks with the exception of loans made to
    associations.''
      Subsec. (c)(3), (4). Pub. L. 102-552, Sec. 305(1)(B), substituted
    ''banks'' for ''institutions''.
      Subsec. (c)(5). Pub. L. 102-552, Sec. 304(a), amended par. (5)
    generally, substituting present provisions for provisions relating
    to repayments by System institutions generally, time of payments,
    and terms of payments.
      Subsec. (d)(1)(B). Pub. L. 102-552, Sec. 302, amended subpar. (B)
    generally.  Prior to amendment, subpar. (B) read as follows:
    ''Except as provided in subparagraph (C), in order to enable the
    Financial Assistance Corporation to repay the obligation referred
    to in subparagraph (A), each institution that issued preferred
    stock under section 2278b-7(a) of this title with respect to such
    obligation (or the successor thereto) shall pay to the Financial
    Assistance Corporation, before the maturity date of such
    obligation, an amount equal to the par value of such stock
    outstanding for such institution.''
      Subsec. (d)(1)(C). Pub. L. 102-552, Sec. 303, amended subpar. (C)
    generally.  Prior to amendment, subpar. (C) read as follows: ''In
    order to enable the Financial Assistance Corporation to repay the
    obligations issued to provide assistance under section 410(c) of
    the Agricultural Credit Act of 1987 and section 2162(c) of this
    title, or issued to provide funds to cover the expenses of the
    Assistance Board under section 2278a-7(a) of this title, each
    System institution shall pay to the Financial Assistance
    Corporation a proportion of such obligation equal to -
        ''(i) the average performing loan volume of the institution for
      the preceding 15 years; divided by
        ''(ii) the average performing loan volume of all of the System
      institutions for the same period.''
      Subsec. (d)(1)(D), (E). Pub. L. 102-552, Sec. 305(2),
    redesignated subpar. (E) as (D) and struck out former subpar. (D)
    which read as follows: ''(D) Special rule. - For purposes of
    determining the average loan volume of Farm Credit Banks, loan
    volume shall consist of loans made by such banks with the exception
    of loans made to associations.''
      Subsec. (d)(3)(A). Pub. L. 102-552, Sec. 306(1)(A), inserted
    heading and struck out former heading ''Interest'', in cl. (i),
    inserted ''on the payment of principal or interest due under
    subparagraphs (B) and (C) of section 2278a-9(e)(3) of this title,
    on the payment of principal due under paragraph (1)(C), or on the
    payment of an assessment due under subsection (c)(5)(B) of this
    section,'', struck out ''of the interest'' after ''the amount'' in
    two places, and substituted ''bank'' for ''institution'' wherever
    appearing, in cl. (ii), struck out ''of interest'' after ''the full
    amount'', and substituted ''defaulting bank'' for ''defaulting
    institution'' and ''any uncollected amount'' for ''such uncollected
    interest'', and in cl. (iii), substituted ''allocated to other
    System banks in accordance with the allocation mechanism applicable
    under this chapter to the particular defaulted obligation.'' for
    ''added to the amount of interest due from remaining System
    institutions, under subsection (c) of this section, and each
    remaining System institution, subject to the special rule provided
    in subsection (c)(2)(D) of this section, shall pay to the Trust
    Fund a proportion of the uncollected interest equal to -
        ''(I) the amount of the performing loan volume of the
      institution (based on the average loan volume for the preceding
      year); divided by
        ''(II) the total performing loan volume of the System.''
      Subsec. (d)(3)(B). Pub. L. 102-552, Sec. 306(1)(B), inserted
    heading and struck out former heading ''Principal''.
      Subsec. (d)(3)(C). Pub. L. 102-552, Sec. 306(1)(C), substituted
    ''banks'' for ''institutions'' wherever appearing in heading and
    text, ''bank'' for ''institution'', and ''any amounts'' for ''the
    amount of any interest''.
      Subsec. (d)(4)(A). Pub. L. 102-552, Sec. 306(2)(A), inserted ''or
    section 2278a-9(e)(3)(A) of this title''.
      Subsec. (d)(4)(B)(i). Pub. L. 102-552, Sec. 306(2)(B)(i),
    inserted heading and struck out former heading ''Interest
    payments'', substituted ''bank'' for ''institution'' wherever
    appearing, and inserted ''on the payment of principal or interest
    due under subparagraphs (B) and (C) of section 2278a-9(e)(3) of
    this title, on the payment of principal due under paragraph (1)(C),
    or on the payment of an assessment due under subsection (c)(5)(B)
    of this section,''.
      Subsec. (d)(4)(B)(ii). Pub. L. 102-552, Sec. 306(2)(B)(ii),
    inserted heading and struck out former heading ''Principal
    payments''.
      Subsec. (e). Pub. L. 102-552, Sec. 305(3), added subsec. (e).
      1988 - Subsec. (c)(2)(D). Pub. L. 100-399, Sec. 201(q),
    substituted ''Farm Credit Banks'' for ''Federal intermediate credit
    banks and Federal land banks''.
      Pub. L. 100-399, Sec. 201(p), inserted ''and Federal land banks''
    after ''credit banks'' and struck out ''production credit'' before
    ''associations''.
      Subsec. (c)(5)(B). Pub. L. 100-399, Sec. 201(r)(1), substituted
    ''payments under this paragraph'' for ''interest payments''.
      Pub. L. 100-399, Sec. 201(r)(2), substituted ''referred to in
    subsection (d)(1)(E)'' for ''issued under subsection (d)(1)(C)''.
      Subsec. (c)(5)(C)(i). Pub. L. 100-399, Sec. 201(r)(1),
    substituted ''payments under this paragraph'' for ''interest
    payments''.
      Subsec. (d). Pub. L. 100-399, Sec. 201(s), inserted '';
    defaults'' after ''principal'' in heading.
      Subsec. (d)(1)(C). Pub. L. 100-399, Sec. 201(t), in introductory
    provisions substituted ''issued to provide assistance under section
    410(c) of the Agricultural Credit Act of 1987 and section 2162(c)
    of this title, or issued to provide funds to cover the expenses of
    the Assistance Board under section 2278a-7(a) of this title,'' for
    ''referred to in section 410(c) of the Agricultural Credit Act of
    1987,'' and ''such obligation'' for ''such principal'', in cl. (i)
    substituted ''institution'' for ''bank'', and in cl. (ii)
    substituted ''institutions'' for ''banks''.
      Subsec. (d)(1)(D). Pub. L. 100-399, Sec. 201(q), substituted
    ''Farm Credit banks'' for ''Federal intermediate credit banks and
    Federal land banks''.
      Pub. L. 100-399, Sec. 201(p), inserted ''and Federal land banks''
    after ''credit banks'' and struck out ''production credit'' before
    ''associations''.
      Subsec. (d)(1)(E). Pub. L. 100-399, Sec. 201(u), substituted
    ''subparagraphs (B) and (C)'' for ''subparagraph (B)''.
      Subsec. (d)(3)(A)(i), (iii). Pub. L. 100-399, Sec. 201(v),
    substituted ''subsection (c) of this section'' for ''this
    subsection''.
      Subsec. (d)(3)(B)(iii). Pub. L. 100-399, Sec. 201(w), inserted
    ''is prohibited from redeeming or'' after ''If such institution''.
      Subsec. (d)(4)(B)(iii). Pub. L. 100-399, Sec. 201(x), substituted
    ''section 2277a-9(c)(2)(B) of this title'' for ''section 2277a-9 of
    this title''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by section 201(q) of Pub. L. 100-399 effective
    immediately after amendment made by section 401 of Pub. L. 100-233,
    which was effective 6 months after Jan. 6, 1988, and amendment by
    section 201(p), (r)-(x) of Pub. L. 100-399 effective as if enacted
    immediately after enactment of Pub. L. 100-233, which was approved
    Jan. 6, 1988, see section 1001 of Pub. L. 100-399, set out as a
    note under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2277a-9, 2278a-9,
    2278a-13, 2278b-1, 2278b-5, 2278b-7, 2278b-8, 2278b-9, 2278b-11 of
    this title.
 
-CITE-
    12 USC Sec. 2278b-7                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
    Part B - Financial Assistance Corporation
 
-HEAD-
    Sec. 2278b-7. Preferred stock
 
-STATUTE-
    (a) Issuance
      (1) In general
        Each System institution that is certified under section 2278a-4
      of this title may issue a special class of preferred stock only
      in an amount, and subject to such terms and conditions, as
      authorized by the Assistance Board.
      (2) Dividends
        (A) In general
          Except as provided in subparagraph (B), dividends shall not
        be payable on stock issued under this section.
        (B) Exception
          Stock issued under this section shall be issued under such
        terms and conditions as to enable the Secretary of the
        Treasury, with respect to any of such stock the Secretary
        purchases under section 2278b-6(d)(3)(B)(iii) of this title,
        and the Farm Credit System Insurance Corporation, with respect
        to any of such stock that the Insurance Corporation purchases
        or otherwise acquires under section 2278b-6(d)(3)(B)(iii) of
        this title or section 2278b-6(d)(4)(B)(ii) of this title, to
        establish for such stock a stated dividend rate equal to the
        current market yield on outstanding, marketable obligations of
        the United States with maturities of 30 years, plus a premium
        to reflect the cost of capital for institutions in financial
        distress.
      (3) Voting rights
        A holder of stock issued under this subsection shall have no
      voting rights with respect to the stock.
    (b) Purchase
      The Financial Assistance Corporation shall purchase shares of
    stock issued by certified System institutions under subsection (a)
    of this section to the extent that the issuance of such stock is
    approved by the Assistance Board.
 
-SOURCE-
    (Pub. L. 92-181, title VI, Sec. 6.27, as added Pub. L. 100-233,
    title II, Sec. 201, Jan. 6, 1988, 101 Stat. 1602; amended Pub. L.
    100-399, title II, Sec. 201(y)-(aa), Aug. 17, 1988, 102 Stat. 992.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Subsec. (a)(1). Pub. L. 100-399, Sec. 201(y), struck out
    ''(a) or (b)'' after ''section 2278a-4''.
      Subsec. (a)(2)(B). Pub. L. 100-399, Sec. 201(z), substituted
    ''Farm Credit System Insurance Corporation'' for ''Reserve Account
    Board'' and ''Insurance Corporation purchases'' for ''Board
    purchases''.
      Subsec. (b). Pub. L. 100-399, Sec. 201(aa), substituted
    ''subsection (a)'' for ''subsections (a) and (b)''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2202c, 2254, 2278a-4,
    2278a-5, 2278b-6 of this title.
 
-CITE-
    12 USC Sec. 2278b-8                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
    Part B - Financial Assistance Corporation
 
-HEAD-
    Sec. 2278b-8. Payments
 
-STATUTE-
    (a) In general
      Beginning in fiscal year 1989, the Secretary of the Treasury
    shall reimburse the Financial Assistance Corporation for any
    amounts such Corporation pays in interest charges under section
    2278b-6(c) of this title during fiscal year 1988, and thereafter
    the Secretary shall pay the Financial Assistance Corporation any
    amounts due from the Secretary to such Corporation under section
    2278b-6(c) of this title.
    (b) Authorization of appropriations
      There is authorized to be appropriated to the Secretary of the
    Treasury such sums on an annual basis as may be necessary to carry
    out this part.
 
-SOURCE-
    (Pub. L. 92-181, title VI, Sec. 6.28, as added Pub. L. 100-233,
    title II, Sec. 201, Jan. 6, 1988, 101 Stat. 1603; amended Pub. L.
    100-399, title II, Sec. 201(bb), Aug. 17, 1988, 102 Stat. 992; Pub.
    L. 102-552, title III, Sec. 304(b), Oct. 28, 1992, 106 Stat. 4114.)
 
-MISC1-
                                 AMENDMENTS
      1992 - Subsecs. (b), (c). Pub. L. 102-552 redesignated subsec.
    (c) as (b) and struck out former subsec. (b) which read as follows:
      ''(b) Repayment of Interest Paid by Secretary of the Treasury. -
        ''(1) In general. - Any amounts paid into the Assistance Fund
      by the Secretary of the Treasury pursuant to subsection (a) of
      this section exceeding $2,000,000,000 shall be repaid by System
      institutions in accordance with a schedule to be established by
      the Farm Credit Administration Board.
        ''(2) Allocation. - Until such repayment is completed, each
      System institution shall pay a proportionate share of the amount
      due under paragraph (1) equal to -
          ''(A) the amount of the performing loan volume of the
        institution, determined in accordance with section
        2278b-6(c)(2)(D) of this title (based on the average loan
        volume for the preceding year); divided by
          ''(B) the total performing loan volume of the System for the
        preceding year.''
      1988 - Subsec. (b)(2). Pub. L. 100-399 in introductory provision
    substituted ''paragraph (1) equal'' for ''this paragraph'' and in
    subpar. (A) substituted ''section 2278b-6(c)(2)(D) of this title''
    for ''subsection (c)(1)(D) of this section''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2278b-5, 2278b-6 of this
    title.
 
-CITE-
    12 USC Sec. 2278b-9                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
    Part B - Financial Assistance Corporation
 
-HEAD-
    Sec. 2278b-9. One-time stock purchase
 
-STATUTE-
    (a) Amount of stock purchase
      (1) In general
        Except as provided in paragraphs (2) and (3), for the purpose
      of obtaining funds for the Trust Fund, each System institution
      shall purchase from the Financial Assistance Corporation stock
      issued in accordance with section 2278b-3 of this title in an
      amount equal to the amount by which the unallocated retained
      earnings of the institution (after taking into account any funds
      received by the institution under section 2278a-9(c) of this
      title) exceeds -
          (A) in the case of a System bank, 5 percent of assets; or
          (B) in the case of a production credit association or a
        Federal land bank association, 13 percent of assets.
      (2) Reallocation
        The district board of a district, subject to the unanimous
      consent of the bank and associations in the district that would
      be affected by the reallocation, may reallocate the amount of
      stock required to be purchased by banks and associations in the
      district under paragraph (1) to equitably reflect the ability of
      the banks and associations to pay, except that -
          (A) the total amount of stock purchased by banks and
        associations in the district under this paragraph shall equal
        the total amount of stock required to be purchased by the banks
        and associations under paragraph (1); and
          (B) the board may not impair the stock of an association in
        carrying out this paragraph; and
          (C) a district board's authority to reallocate stock
        purchases under this paragraph shall be limited to reallocation
        among like associations of the amount of stock required to be
        purchased by such associations; reallocation of the amount of
        stock required to be purchased by production credit
        associations among such associations and the district Federal
        intermediate credit bank; and reallocation of the amount of
        stock required to be purchased by Federal land bank
        associations among such associations and the district Federal
        land bank.  Other reallocations than those enumerated above
        shall not be permitted.
      (3) Periodic purchases
        (A) Notwithstanding any other provision of this section, the
      Financial Assistance Corporation shall establish a program under
      which System institutions shall purchase, as debt obligations are
      issued under section 2278b-6(a) of this title, stock of the
      Corporation in amounts described in this paragraph.
        (B) The program shall provide, with respect to each issuance of
      debt obligations under section 2278b-6(a) of this title, that
      each System institution originally required to purchase stock
      under paragraph (1), or the successor thereto, shall purchase
      Corporation stock in an amount determined by multiplying the
      amount of stock such institution was originally required to
      purchase under that paragraph by a percentage equal to the
      percentage which the amount of the issuance bears to
      $4,000,000,000.
        (C) The Financial Assistance Corporation shall promptly rescind
      purchases of stock of the Corporation made under paragraph (1) or
      (2) by System institutions and refund to such institutions, or
      their successors, the purchase price for the stock, except that,
      with respect to each issuance of debt obligations that occurs
      before October 1, 1988, the Corporation shall deduct from any
      refund due any System institution, and retain, the amount payable
      by such institution.
    (b) Computations
      For purposes of subsection (a) of this section, the unallocated
    retained earnings and assets of a System institution shall be
    computed in accordance with generally accepted accounting
    principles on the basis of the financial statement of the
    institution on December 31, 1986.
    (c) Notice
      (1) Within 15 days after the retirement of the obligations of the
    Capital Corporation under section 2278a-9 of this title -
        (A) the Financial Assistance Corporation shall notify each
      System institution of the amount of stock such institution is
      required to purchase under subsection (a) of this section; or
        (B) in the case of a district in which the district board has
      reallocated the stock purchase requirement in accordance with
      subsection (a)(2) of this section, the district board shall
      notify each System institution in the district of the amount of
      stock such institution is required to purchase under subsection
      (a) of this section.
      (2) Not later than 15 days before each issuance of debt
    obligations under section 2278b-6(a) of this title occurring after
    September 30, 1988, the Financial Assistance Corporation shall
    notify each System institution required to purchase Corporation
    stock under subsection (a)(3) of this section of the amount of the
    stock it is required to purchase.
    (d) Institution requirements after notice
      Within 15 days after a System institution is notified of the
    amounts due under subsection (c) of this section, the institution
    shall purchase from the Financial Assistance Corporation the amount
    of stock required to be purchased by the institution under this
    section.  No further stock purchases, obligations, or assessments
    shall be required beyond that provided in section 2278b-6 of this
    title and this section.
    (e) Jurisdiction over actions
      Notwithstanding any other provision of law, the United States
    district court for the District of Columbia shall have exclusive
    jurisdiction over any action brought under or arising out of this
    section.  No suit or proceeding shall be maintained for the
    recovery of any amount of stock alleged to have been erroneously or
    illegally purchased, and no suit or proceeding shall be maintained
    to enjoin or otherwise prevent or impede the giving of notice or
    the purchase of stock required under this section, unless the
    amount of stock required to be purchased under this section has
    been purchased and paid for in full.
 
-SOURCE-
    (Pub. L. 92-181, title VI, Sec. 6.29, as added Pub. L. 100-233,
    title II, Sec. 201, Jan. 6, 1988, 101 Stat. 1603; amended Pub. L.
    100-460, title VI, Sec. 646, Oct. 1, 1988, 102 Stat. 2266.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Subsec. (a)(1). Pub. L. 100-460, Sec. 646(1), substituted
    ''paragraphs (2) and (3)'' for ''paragraph (2)'' in introductory
    provisions.
      Subsec. (a)(3). Pub. L. 100-460, Sec. 646(2), added par. (3).
      Subsec. (c). Pub. L. 100-460, Sec. 646(3), (4), designated
    existing provisions as par. (1), redesignated former pars. (1) and
    (2) as subpars. (A) and (B), respectively, and added par. (2).
                     EFFECTIVE DATE OF 1988 AMENDMENTS
      Pub. L. 101-220, Sec. 7(a), Dec. 12, 1989, 103 Stat. 1881, and
    Pub. L. 101-239, title I, Sec. 1006(a), Dec. 19, 1989, 103 Stat.
    2109, provided that: ''Notwithstanding any other provision of law,
    the amendments to section 6.29 of the Farm Credit Act of 1971 (12
    U.S.C. 2278b-9) made by section 646 of the Rural Development,
    Agriculture, and Related Agencies Appropriations Act, 1989 (Public
    Law 100-460; 102 Stat. 2266) shall be effective on October 1,
    1992.''
      Section 646 of Pub. L. 100-460 provided that the amendment made
    by that section is effective Oct. 1, 1989.
        PAYMENTS TO FARM CREDIT SYSTEM INSTITUTIONS FOR PURCHASES OF
                   FINANCIAL ASSISTANCE CORPORATION STOCK
      Pub. L. 101-239, title I, Sec. 1006(b), Dec. 19, 1989, 103 Stat.
    2109, directed Financial Assistance Corporation to pay, out of
    Financial Assistance Corporation Trust Fund established under
    section 2278b-5(b) of this title, to each of institutions of Farm
    Credit System that purchased stock in Financial Assistance
    Corporation under section 2278b-9 of this title, four annual
    payments, required the annual payments to be made available as soon
    as practicable after October 1 of each of calendar years 1989
    through 1992, established method of calculating payments, and
    provided that payments be made available to such institutions in an
    amount equal to total amount of annual payments to be made
    available times the ratio of the amount of stock each institution
    purchased divided by $177,000,000.
      Similar provisions were contained in Pub. L. 101-220, Sec. 7(b),
    Dec. 12, 1989, 103 Stat. 1881.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2278b-5 of this title.
 
-CITE-
    12 USC Sec. 2278b-10                                         01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
    Part B - Financial Assistance Corporation
 
-HEAD-
    Sec. 2278b-10. Exemption from taxation
 
-STATUTE-
    (a) Assets
      The Financial Assistance Corporation, and the capital, reserves,
    and surplus thereof, and the income derived therefrom, shall be
    exempt from Federal, State, municipal, and local taxation, except
    taxes on real estate held by the Financial Assistance Corporation
    to the same extent, according to its value, as other similar
    property held by other persons is taxed.
    (b) Obligations
      The notes, bonds, debentures, and other obligations issued by the
    Financial Assistance Corporation shall be accorded the same tax
    treatment as System-wide obligations.
 
-SOURCE-
    (Pub. L. 92-181, title VI, Sec. 6.30, as added Pub. L. 100-233,
    title II, Sec. 201, Jan. 6, 1988, 101 Stat. 1604.)
 
-CITE-
    12 USC Sec. 2278b-11                                         01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VI - ASSISTANCE TO FARM CREDIT SYSTEM
    Part B - Financial Assistance Corporation
 
-HEAD-
    Sec. 2278b-11. Termination
 
-STATUTE-
    (a) Financial Assistance Corporation
      The Financial Assistance Corporation and the authority provided
    to such Corporation by this part shall terminate on the complete
    discharge by the Financial Assistance Corporation of its
    responsibilities under section 2278a-9(e) of this title and
    subsections (c) through (g) of section 2278b-6 of this title with
    regard to repayments by System institutions, but in no event later
    than 2 years following the maturity and full payment of all debt
    obligations issued under section 2278b-6(a) of this title.
    (b) Accounts
      Simultaneously with the termination of the Financial Assistance
    Corporation as provided in subsection (a) of this section, any
    funds in the accounts established under section 2278b-5 of this
    title shall be transferred to the Insurance Fund established under
    section 2277a-9 of this title.
 
-SOURCE-
    (Pub. L. 92-181, title VI, Sec. 6.31, as added Pub. L. 100-233,
    title II, Sec. 201, Jan. 6, 1988, 101 Stat. 1605; amended Pub. L.
    102-552, title III, Sec. 307(b), Oct. 28, 1992, 106 Stat. 4116.)
 
-MISC1-
                                 AMENDMENTS
      1992 - Subsec. (a). Pub. L. 102-552 substituted ''terminate on
    the complete discharge by the Financial Assistance Corporation of
    its responsibilities under section 2278a-9(e) of this title and
    subsections (c) through (g) of section 2278b-6 of this title with
    regard to repayments by System institutions, but in no event later
    than 2 years following'' for ''terminate on''.
 
-CITE-
    12 USC SUBCHAPTER VII - RESTRUCTURING OF SYSTEM
                  INSTITUTIONS                                   01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VII - RESTRUCTURING OF SYSTEM INSTITUTIONS
    .
 
-HEAD-
    SUBCHAPTER VII - RESTRUCTURING OF SYSTEM INSTITUTIONS
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-399, title IV, Sec. 408(a), Aug. 17, 1988, 102
    Stat. 1001, substituted ''RESTRUCTURING OF'' for ''MERGERS OF'' in
    subchapter heading.
 
-SECREF-
                  SUBCHAPTER REFERRED TO IN OTHER SECTIONS
      This subchapter is referred to in section 2252 of this title.
 
-CITE-
    12 USC Part A - Merger of Banks Within a District            01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VII - RESTRUCTURING OF SYSTEM INSTITUTIONS
    Part A - Merger of Banks Within a District
    .
 
-HEAD-
    Part A - Merger of Banks Within a District
 
-CITE-
    12 USC Sec. 2279a                                            01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VII - RESTRUCTURING OF SYSTEM INSTITUTIONS
    Part A - Merger of Banks Within a District
 
-HEAD-
    Sec. 2279a. Power to merge
 
-STATUTE-
      The banks within a district may merge into a single entity
    (hereinafter in this subchapter referred to as a ''merged bank'')
    if the plan of merger is approved by -
        (1) the Farm Credit Administration Board;
        (2) the respective boards of directors of the banks involved;
        (3) a majority of the stockholders of each bank voting, in
      person or by proxy, at a duly authorized stockholders' meeting
      with each association entitled to cast a number of votes equal to
      the number of its voting stockholders; and
        (4) in the case of a bank for cooperatives, a majority of the
      total equity interests in such merging bank for cooperatives
      (including allocated, but not unallocated, surplus and reserves)
      held by those stockholders or subscribers to the guaranty fund of
      the bank voting.
 
-SOURCE-
    (Pub. L. 92-181, title VII, Sec. 7.0, as added Pub. L. 100-233,
    title IV, Sec. 416, Jan. 6, 1988, 101 Stat. 1645; amended Pub. L.
    100-399, title IV, Sec. 408(b), Aug. 17, 1988, 102 Stat. 1001.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-399 substituted ''The banks'' for ''Two or
    more banks'' in introductory provisions, and in par. (3)
    substituted ''with each association entitled to cast a number of
    votes equal to the number of its voting'' for ''in accordance with
    the provisions of section 2223(c) of this title relating to the
    casting of votes by''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2252, 2279b, 2279c-2 of
    this title.
 
-CITE-
    12 USC Sec. 2279a-1                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VII - RESTRUCTURING OF SYSTEM INSTITUTIONS
    Part A - Merger of Banks Within a District
 
-HEAD-
    Sec. 2279a-1. Board of directors
 
-STATUTE-
      Each merged bank shall elect a board of directors of such number,
    for such term, in such manner, and with such qualifications, as may
    be required in its bylaws, except that at least one member shall be
    elected by the other directors, which member shall not be a
    director, officer, employee, or stockholder of a System
    institution.
 
-SOURCE-
    (Pub. L. 92-181, title VII, Sec. 7.1, as added Pub. L. 100-233,
    title IV, Sec. 416, Jan. 6, 1988, 101 Stat. 1645; amended Pub. L.
    100-399, title IV, Sec. 408(c), Aug. 17, 1988, 102 Stat. 1001.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-399 struck out ''for the district'' in section
    catchline and amended text generally, revising and restating as a
    single unlettered paragraph provisions of former subsecs. (a) and
    (b).
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-CITE-
    12 USC Sec. 2279a-2                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VII - RESTRUCTURING OF SYSTEM INSTITUTIONS
    Part A - Merger of Banks Within a District
 
-HEAD-
    Sec. 2279a-2. Powers of merged banks
 
-STATUTE-
    (a) In general
      Except as otherwise provided in this subchapter, a merged bank
    shall have all of the powers granted to, and shall be subject to
    all of the obligations imposed on, any of the constituent entities
    of the merged bank.
    (b) Regulations
      The Farm Credit Administration shall issue regulations that
    establish the manner in which the powers and obligations of the
    banks that form the merged bank are consolidated, and to the extent
    necessary, reconciled in the merged bank.
 
-SOURCE-
    (Pub. L. 92-181, title VII, Sec. 7.2, as added Pub. L. 100-233,
    title IV, Sec. 416, Jan. 6, 1988, 101 Stat. 1645.)
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2279f of this title.
 
-CITE-
    12 USC Sec. 2279a-3                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VII - RESTRUCTURING OF SYSTEM INSTITUTIONS
    Part A - Merger of Banks Within a District
 
-HEAD-
    Sec. 2279a-3. Capitalization
 
-STATUTE-
      In accordance with section 2154a of this title, each merged bank
    shall provide, through bylaws and subject to Farm Credit
    Administration regulations, for the capitalization of the bank and
    the manner in which bank stock shall be issued, held, transferred,
    and retired and bank earnings distributed.
 
-SOURCE-
    (Pub. L. 92-181, title VII, Sec. 7.3, as added Pub. L. 100-399,
    title IV, Sec. 408(d), Aug. 17, 1988, 102 Stat. 1001.)
 
-MISC1-
                              PRIOR PROVISIONS
      A prior section 2279a-3, Pub. L. 92-181, title VII, Sec. 7.3, as
    added Pub. L. 100-233, title IV, Sec. 416, Jan. 6, 1988, 101 Stat.
    1645, related to issuance of shares of capital stock, prior to
    repeal by Pub. L. 100-399, title IV, Sec. 408(d), Aug. 17, 1988,
    102 Stat. 1001.
                               EFFECTIVE DATE
      Section effective as if enacted immediately after enactment of
    Pub. L. 100-233, which was approved Jan. 6, 1988, see section
    1001(a) of Pub. L. 100-399, set out as an Effective Date of 1988
    Amendment note under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2279f of this title.
 
-CITE-
    12 USC Sec. 2279a-4                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VII - RESTRUCTURING OF SYSTEM INSTITUTIONS
    Part A - Merger of Banks Within a District
 
-HEAD-
    Sec. 2279a-4. Repealed. Pub. L. 100-399, title IV, Sec. 408(d),
        Aug. 17, 1988, 102 Stat. 1001
 
-MISC1-
      Section, Pub. L. 92-181, title VII, Sec. 7.4, as added Pub. L.
    100-233, title IV, Sec. 416, Jan. 6, 1988, 101 Stat. 1646, related
    to earnings, reserves, and distributions with regard to merged
    banks.  See section 2279a-3 of this title.
                          EFFECTIVE DATE OF REPEAL
      Repeal effective as if repealing provisions had been enacted
    immediately after enactment of Pub. L. 100-233, which was approved
    Jan. 6, 1988, see section 1001(a) of Pub. L. 100-399, set out as an
    Effective Date of 1988 Amendment note under section 2002 of this
    title.
 
-CITE-
    12 USC Sec. 2279a-5                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VII - RESTRUCTURING OF SYSTEM INSTITUTIONS
    Part A - Merger of Banks Within a District
 
-HEAD-
    Sec. 2279a-5. Transferred
 
-COD-
                                CODIFICATION
      Section, Pub. L. 92-181, title VII, Sec. 7.5, as added Pub. L.
    100-233, title IV, Sec. 416, Jan. 6, 1988, 101 Stat. 1646, which
    required reports by merged banks for cooperatives, was renumbered
    section 3.29 of title III of Pub. L. 92-181 by Pub. L. 100-399,
    title IV, Sec. 408(e), Aug. 17, 1988, 102 Stat. 1001, and is
    classified to section 2149a of this title.
 
-CITE-
    12 USC Part B - Mergers, Transfers of Assets, and Powers
                  of Associations Within a District              01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VII - RESTRUCTURING OF SYSTEM INSTITUTIONS
    Part B - Mergers, Transfers of Assets, and Powers of Associations
         Within a District
    .
 
-HEAD-
    Part B - Mergers, Transfers of Assets, and Powers of Associations
    Within a District
 
-CITE-
    12 USC subpart 1 - transfers by federal land banks to
                  federal land bank associations                 01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VII - RESTRUCTURING OF SYSTEM INSTITUTIONS
    Part B - Mergers, Transfers of Assets, and Powers of Associations
         Within a District
    subpart 1 - transfers by federal land banks to federal land bank
         associations
    .
 
-HEAD-
    subpart 1 - transfers by federal land banks to federal land bank
    associations
 
-CITE-
    12 USC Sec. 2279b                                            01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VII - RESTRUCTURING OF SYSTEM INSTITUTIONS
    Part B - Mergers, Transfers of Assets, and Powers of Associations
         Within a District
    subpart 1 - transfers by federal land banks to federal land bank
         associations
 
-HEAD-
    Sec. 2279b. Transfer of lending authority
 
-STATUTE-
    (a) Voluntary transfers
      A Federal land bank or a merged bank having a Federal land bank
    as one of its constituents, may transfer to a Federal land bank
    association, and the association may assume, the authority of the
    transferring bank in the territorial area served by the
    association, to make and participate in long-term real estate
    mortgage loans under this chapter if the transfer is approved by -
        (1) the Farm Credit Administration Board;
        (2) the Board of Directors of both institutions; and
        (3) a majority of the stockholders of the bank and of the
      association, in accordance with the voting provisions of sections
      2279a and 2279c-1 of this title, respectively.
    (b) Direct loans and financial assistance
      After a transfer described in subsection (a) or (d) of this
    section -
        (1) the Federal land bank association shall possess all of the
      direct long-term real estate mortgage loan authority, formerly
      possessed by the transferring bank, in the territory served by
      the association; and
        (2) the bank may provide and extend financial assistance to,
      and discount for, or purchase from, the transferee Federal land
      bank association any note, draft, or other obligation with the
      endorsement or guarantee of the association, the proceeds of
      which have been advanced to persons eligible and for purposes of
      financing by the association under subsection (a) of this
      section.
    (c) Regulations
      The Farm Credit Administration shall issue regulations that
    establish the manner in which the powers and obligations of the
    banks that make transfers are consolidated and, to the extent
    necessary, reconciled in the association referred to in subsection
    (a) of this section.
    (d) Mandatory transfer
      On the merger of one or more production credit associations with
    one or more Federal land bank associations, the bank supervising
    the Federal land bank association shall transfer all of the direct
    lending authority of the bank in the territory served by such
    Federal land bank association to such merged association.
 
-SOURCE-
    (Pub. L. 92-181, title VII, Sec. 7.6, formerly Sec. 7.6, 7.7, as
    added Pub. L. 100-233, title IV, Sec. 416, Jan. 6, 1988, 101 Stat.
    1647; amended Pub. L. 100-399, title IV, Sec. 408(f)-(j), Aug. 17,
    1988, 102 Stat. 1001, 1002.)
 
-COD-
                                CODIFICATION
      Pub. L. 100-399, Sec. 408(j), transferred section 7.7 of Pub. L.
    92-181, which was classified to section 2279c of this title, to
    subsec. (d) of this section.
 
-MISC3-
                                 AMENDMENTS
      1988 - Subsec. (a). Pub. L. 100-399, Sec. 408(f), substituted
    ''Voluntary transfers'' for ''Assignments'' as subsection heading,
    and in text substituted ''may transfer'' for ''may assign'', ''this
    chapter'' for ''sections 2014 through 2017 of this title'', and
    ''transfer is approved'' for ''assignment is approved'' in
    introductory provisions, and ''sections 2279a and 2279c-1 of this
    title, respectively'' for ''sections 2279a and 2279b of this
    title'' in par. (3).
      Subsec. (b). Pub. L. 100-399, Sec. 408(g), substituted ''a
    transfer described in subsection (a) or (d)'' for ''an assignment
    described in subsection (a)'' in introductory provisions and ''the
    bank may provide'' for ''the Federal land bank may provide'' in
    par. (2).
      Subsec. (c). Pub. L. 100-399, Sec. 408(h), struck out
    ''assignments or'' before ''transfers are consolidated'' and struck
    out second sentence, which provided that, following a transfer or
    assignment under subsection (a) of this section, the provisions of
    section 2154a of this title were to be applicable to the
    association.
      Subsec. (d). Pub. L. 100-399, Sec. 408(i), (j), transferred
    section 2279c of this title to subsec. (d) of this section,
    substituted heading for former section heading, and amended text
    generally.  Prior to amendment, text read as follows: ''On the
    merger of one or more production credit associations with one or
    more Federal land bank associations, the bank supervising the
    Federal land bank association shall transfer all of its direct
    lending authority of the bank to such association under section
    2279c-1 of this title.''
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2015, 2020, 2277a-4,
    2277a-8, 2277a-10, 2277a-10a, 2279c-2 of this title.
 
-CITE-
    12 USC subpart 2 - merger of like and unlike associations    01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VII - RESTRUCTURING OF SYSTEM INSTITUTIONS
    Part B - Mergers, Transfers of Assets, and Powers of Associations
         Within a District
    subpart 2 - merger of like and unlike associations
    .
 
-HEAD-
    subpart 2 - merger of like and unlike associations
 
-CITE-
    12 USC Sec. 2279c                                            01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VII - RESTRUCTURING OF SYSTEM INSTITUTIONS
    Part B - Mergers, Transfers of Assets, and Powers of Associations
         Within a District
    subpart 2 - merger of like and unlike associations
 
-HEAD-
    Sec. 2279c. Transferred
 
-COD-
                                CODIFICATION
      Section, Pub. L. 92-181, title VII, Sec. 7.7, as added Pub. L.
    100-233, title IV, Sec. 416, Jan. 6, 1988, 101 Stat. 1647; amended
    Pub. L. 100-399, title IV, Sec. 408(i), (j), Aug. 17, 1988, 102
    Stat. 1002, which related to mergers of unlike associations, was
    transferred to section 7.6(d) of Pub. L. 92-181 by section 408(j)
    of Pub. L. 100-399 and is classified to section 2279b(d) of this
    title.
 
-CITE-
    12 USC Sec. 2279c-1                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VII - RESTRUCTURING OF SYSTEM INSTITUTIONS
    Part B - Mergers, Transfers of Assets, and Powers of Associations
         Within a District
    subpart 2 - merger of like and unlike associations
 
-HEAD-
    Sec. 2279c-1. Merger of associations
 
-STATUTE-
    (a) In general
      Two or more associations within the same district, whether or not
    organized under the same subchapter of this chapter, may merge into
    a single entity (hereinafter in this subchapter referred to as a
    ''merged association'') if the plan of merger is approved by -
        (1) the Farm Credit Administration Board;
        (2) the boards of directors of the associations;
        (3) a majority of the shareholders of each association voting,
      in person or by proxy, at a duly authorized stockholders'
      meeting; and
        (4) the Farm Credit Bank.
    (b) Powers, obligations, and consolidation
      (1) Powers and obligations
        Except as otherwise provided by this subchapter, a merged
      association shall -
          (A) possess all powers granted under this chapter to the
        associations forming the merged association; and
          (B) be subject to all of the obligations imposed under this
        chapter on the associations forming the merged association.
      (2) Consolidation
        The Farm Credit Administration shall issue regulations that
      establish the manner in which the powers and obligations of the
      associations that form the merged association are consolidated
      and, to the extent necessary, reconciled in the merged
      association.
    (c) Stock issuance
      (1) Plan of merger
        Subject to section 2154a of this title, the number of shares of
      capital stock issued by a merged association to the stockholders
      of any association forming such merged association, and the
      rights and privileges of such shares (including voting power,
      preferences on liquidation, and the right to dividends), shall be
      determined by the plan of merger adopted by the merged
      associations.
      (2) Capitalization
        In accordance with section 2154a of this title, each merged
      association shall provide, through bylaws and subject to Farm
      Credit Administration regulations, for the capitalization of the
      association and the manner in which association stock shall be
      issued, held, transferred, and retired, and association earnings
      shall be distributed.
 
-SOURCE-
    (Pub. L. 92-181, title VII, Sec. 7.8, as added Pub. L. 100-233,
    title IV, Sec. 416, Jan. 6, 1988, 101 Stat. 1647; amended Pub. L.
    100-399, title IV, Sec. 408(k), (l), Aug. 17, 1988, 102 Stat.
    1002.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Subsec. (b)(2). Pub. L. 100-399, Sec. 408(k), struck out
    second sentence, which directed that, following a merger under
    subsection (a) of this section, the provisions of section 2154a of
    this title were to be applicable to the merged association.
      Subsec. (c)(2). Pub. L. 100-399, Sec. 408(l), substituted
    ''Capitalization'' for ''Plan of capitalization'' as par. (2)
    heading and amended text generally.  Prior to amendment, text read
    as follows: ''The number of shares of capital stock, and the rights
    and privileges thereof, issued by a merged association after a
    merger shall be determined by the Board of Directors of the merged
    association, with the approval of the supervising bank, and shall
    be consistent with section 2154a of this title and the regulations
    issued by the Farm Credit Administration.''
      Subsec. (c)(3). Pub. L. 100-399, Sec. 408(l), struck out par. (3)
    which read as follows: ''Voting stock of a merged association shall
    be issued to and held by farmers, ranchers, or producers or
    harvesters of aquatic products who are or were, immediately prior
    to the merger, direct borrowers from one of the associations
    forming the merged association or the supervising bank of such
    merged association.''
      Subsec. (d). Pub. L. 100-399, Sec. 408(l), struck out subsec. (d)
    which read as follows: ''The plan of merger shall provide for the
    issuance, transfer, and retirement of stock and the distribution of
    earnings in accordance with the provisions of section 2154a of this
    title.''
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2279b, 2279c-2, 2279f-1
    of this title.
 
-CITE-
    12 USC subpart 3 - reconsideration                           01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VII - RESTRUCTURING OF SYSTEM INSTITUTIONS
    Part B - Mergers, Transfers of Assets, and Powers of Associations
         Within a District
    subpart 3 - reconsideration
    .
 
-HEAD-
    subpart 3 - reconsideration
 
-CITE-
    12 USC Sec. 2279c-2                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VII - RESTRUCTURING OF SYSTEM INSTITUTIONS
    Part B - Mergers, Transfers of Assets, and Powers of Associations
         Within a District
    subpart 3 - reconsideration
 
-HEAD-
    Sec. 2279c-2. Reconsideration
 
-STATUTE-
    (a) Period
      A stockholder vote in favor of -
        (1) the merger of districts under this chapter;
        (2) the merger of banks within a district under section 2279a
      of this title;
        (3) the transfer of the lending authority of a Federal land
      bank or a merged bank having a Federal land bank as one of its
      constituents, under section 2279b of this title;
        (4) the merger of two or more associations under section
      2279c-1 or 2279f-1 of this title;
        (5) the termination of the status of an institution as a System
      institution under section 2279d of this title; or
        (6) the merger of similar banks under section 2279f of this
      title;
    shall not take effect except in accordance with subsection (b) of
    this section.
    (b) Reconsideration
      (1) Notice
        Not later than 30 days after a stockholder vote in favor of any
      of the actions described in subsection (a) of this section, the
      officer or employee that records such vote shall ensure that all
      stockholders of the voting entity receive notice of the final
      results of the vote.
      (2) Effective date
        A voluntary merger, transfer, or termination that is approved
      by a vote of the stockholders of two or more banks or
      associations shall not take effect until the expiration of 30
      days after the date on which the stockholders of such banks or
      associations are notified of the final result of the vote in
      accordance with paragraph (1).
      (3) Petition filed
        If a petition for reconsideration of a merger, transfer, or
      termination vote, signed by at least 15 percent of the
      stockholders of one or more of the affected banks or
      associations, is presented to the Farm Credit Administration
      within 30 days after the date of the notification required under
      paragraph (1) -
          (A) a voluntary merger, transfer, or termination shall not
        take effect until the expiration of 60 days after the date on
        which the stockholders were notified of the final result of the
        vote; and
          (B) a special meeting of the stockholders of the affected
        banks or associations shall be held during the period referred
        to in subparagraph (A) to reconsider the vote.
      (4) Vote on reconsideration
        If a majority of stockholders of any one of the affected banks
      or associations voting, in person or by written proxy, at a duly
      authorized stockholders' meeting, vote against the proposed
      merger, transfer, or termination, such action shall not take
      place.
      (5) Failure to file petition
        If a petition for reconsideration of such vote is either not
      filed prior to the 60th day after the vote or, if timely filed,
      is not signed by at least 15 percent of the stockholders, the
      merger, transfer, or termination shall become effective in
      accordance with the plan of merger, transfer, or termination.
    (c) Special reconsideration
      (1) Issuance of regulations
        Notwithstanding any other provision of this chapter, the Farm
      Credit Administration shall issue regulations under which the
      stockholders of any association that voluntarily merged with one
      or more associations after December 23, 1985, and before January
      6, 1988, may petition for the opportunity to organize as a
      separate association.
      (2) Requirements
        The regulations issued by the Farm Credit Administration shall
      require that -
          (A) the petition be filed within 1 year after the date of the
        implementation of such regulations;
          (B) the petition be signed by at least 15 percent of the
        stockholders of any one of the associations that merged during
        the period;
          (C) the petition describe the territory in which the proposed
        separate association will operate;
          (D) if the petition is approved -
            (i) the loans of the members of the new association will be
          transferred from the current association to such new
          association;
            (ii) the stock, participation certificates, and other
          similar equities of the current association held by members
          of the new association will be retired at book value and the
          proceeds of such will be transferred to the new association,
          and an equivalent amount of stock, participation
          certificates, and other similar equities will be issued to
          the members by the new association; and
            (iii) the other assets of the current association will be
          distributed equitably among the current association and any
          resulting new association.
      (3) Notification
        (A) In general
          Not later than 30 days after the filing of the petition for
        organization, the current association shall notify its
        stockholders that a petition to establish the separate
        association has been filed.
        (B) Contents
          The notification required under this paragraph shall contain
        -
            (i) the date of a special stockholders' meeting to consider
          the petition for organization; and
            (ii) an enumerated statement of the anticipated benefits
          and the potential disadvantages to such stockholders if the
          new association is established.
        (C) FCA approval
          (i) In general
            All notifications under this paragraph shall be submitted
          to the Farm Credit Administration Board for approval prior to
          being distributed to the stockholders.
          (ii) Amending notification
            The Farm Credit Administration Board shall require that,
          prior to the distribution of the notification to the
          stockholders, the notification be amended as determined
          necessary by the Board to provide accurate information to the
          stockholders that will enable such stockholders to make an
          informed decision as to the advisability of establishing a
          new association.
        (D) Special stockholders' meeting
          (i) Timing of meeting
            The special stockholders' meeting to consider the petition
          shall be held within 60 days after the filing of the
          petition.
          (ii) Approval
            If, at the special stockholders' meeting, a majority of the
          stockholders of the current association who would be served
          by the new association approve, by voting in person or by
          proxy, the establishment of the separate association, the
          Farm Credit Administration shall, within 30 days of such
          vote, issue a charter to the new association and amend the
          charter of the current association to reflect the territory
          to be served by the new association.
 
-SOURCE-
    (Pub. L. 92-181, title VII, Sec. 7.9, as added Pub. L. 100-233,
    title IV, Sec. 416, Jan. 6, 1988, 101 Stat. 1648; amended Pub. L.
    100-399, title IV, Sec. 408(n), (o), Aug. 17, 1988, 102 Stat.
    1002.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Subsec. (a)(1). Pub. L. 100-399, Sec. 408(n)(1),
    substituted ''this chapter'' for ''section 2252(a)(2) of this
    title''.
      Subsec. (a)(4). Pub. L. 100-399, Sec. 408(n)(5), redesignated
    par. (5) as (4).
      Pub. L. 100-399, Sec. 408(n)(2), inserted reference to section
    2279f-1 of this title.
      Subsec. (a)(5). Pub. L. 100-399, Sec. 408(n)(5), redesignated
    par. (6) as (5). Former par. (5) redesignated (4).
      Pub. L. 100-399, Sec. 408(n)(3), substituted ''or'' for ''and''.
      Subsec. (a)(6). Pub. L. 100-399, Sec. 408(n)(5), redesignated
    par. (7) as (6). Former par. (6) redesignated (5).
      Pub. L. 100-399, Sec. 408(n)(4), substituted ''section 2279f''
    for ''section 2279f-1''.
      Subsec. (a)(7). Pub. L. 100-399, Sec. 408(n)(5), redesignated
    par. (7) as (6).
      Subsec. (b)(2). Pub. L. 100-399, Sec. 408(o), struck out comma
    before ''shall not take effect'' and substituted ''such banks or''
    for ''such''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-CITE-
    12 USC subpart 4 - termination and dissolution of
                  institutions                                   01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VII - RESTRUCTURING OF SYSTEM INSTITUTIONS
    Part B - Mergers, Transfers of Assets, and Powers of Associations
         Within a District
    subpart 4 - termination and dissolution of institutions
    .
 
-HEAD-
    subpart 4 - termination and dissolution of institutions
 
-MISC1-
                                 AMENDMENTS
      1988 - Pub. L. 100-399, title IV, Sec. 408(m), Aug. 17, 1988, 102
    Stat. 1002, redesignated subpart 3 as 4.
 
-CITE-
    12 USC Sec. 2279d                                            01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VII - RESTRUCTURING OF SYSTEM INSTITUTIONS
    Part B - Mergers, Transfers of Assets, and Powers of Associations
         Within a District
    subpart 4 - termination and dissolution of institutions
 
-HEAD-
    Sec. 2279d. Termination of System institution status
 
-STATUTE-
    (a) Conditions
      A System institution may terminate the status of the institution
    as a System institution if -
        (1) the institution provides written notice to the Farm Credit
      Administration Board not later than 90 days prior to the proposed
      termination date;
        (2) the termination is approved by the Farm Credit
      Administration Board;
        (3) the appropriate Federal or State authority grants approval
      to charter the institution as a bank, savings and loan
      association, or other financial institution;
        (4) the institution pays to the Farm Credit Assistance Fund, as
      created under section 2278b-5 of this title, if the termination
      is prior to January 1, 1992, or pays to the Farm Credit Insurance
      Fund, if the termination is after such date, the amount by which
      the total capital of the institution exceeds, 6 percent of the
      assets;
        (5) the institution pays or makes adequate provision for
      payment of all outstanding debt obligations of the institution;
        (6) the termination is approved by a majority of the
      stockholders of the institution voting, in person or by written
      proxy, at a duly authorized stockholders' meeting, held prior to
      giving notice to the Farm Credit Administration Board; and
        (7) the institution meets such other conditions as the Farm
      Credit Administration Board by regulation considers appropriate.
    (b) Effect
      On termination of its status as a System institution -
        (1) the Farm Credit Administration Board shall revoke the
      charter of the institution; and
        (2) the institution shall no longer be an instrumentality of
      the United States under this chapter.
 
-SOURCE-
    (Pub. L. 92-181, title VII, Sec. 7.10, as added Pub. L. 100-233,
    title IV, Sec. 416, Jan. 6, 1988, 101 Stat. 1650.)
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2278a-9, 2278b-6, 2279c-2
    of this title.
 
-CITE-
    12 USC Part C - Approval of Disclosure Information and
                  Issuance of Charters by the Farm Credit
                  Administration Board                           01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VII - RESTRUCTURING OF SYSTEM INSTITUTIONS
    Part C - Approval of Disclosure Information and Issuance of
         Charters by the Farm Credit Administration Board
    .
 
-HEAD-
    Part C - Approval of Disclosure Information and Issuance of
    Charters by the Farm Credit Administration Board
 
-CITE-
    12 USC Sec. 2279e                                            01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VII - RESTRUCTURING OF SYSTEM INSTITUTIONS
    Part C - Approval of Disclosure Information and Issuance of
         Charters by the Farm Credit Administration Board
 
-HEAD-
    Sec. 2279e. Approval of disclosure information and issuance of
        charters
 
-STATUTE-
    (a) Disclosure of information
      (1) Approval of plan
        With respect to any plan of merger, transfer of lending
      authority, dissolution, or termination, prior to submission to
      the voters (voting stockholders and, where required, contributors
      to guaranty funds) of the institutions involved, such plan shall
      be submitted to the Farm Credit Administration Board, together
      with all information that is to be distributed to the voters with
      respect to the contemplated action, including an enumerated
      statement of the anticipated benefits and potential disadvantages
      of such action.
      (2) Notice of approval
        On notification that the Farm Credit Administration Board has
      approved such plan for submission to the stockholders, or after
      60 days of no action on the plan by the Board, the submitting
      institutions may submit the plan, together with the disclosure
      information, to the voters for the prescribed vote.
    (b) Notice of reasons for disapproval
      If the Farm Credit Administration Board disapproves the plan for
    submission to the stockholders, notification to the submitting
    institutions shall specify the reasons for the determination by the
    Board. If such plan is determined to be inadequate, it shall not be
    submitted to the voters for a vote.
    (c) Federal charter
      Each plan of merger or transfer of lending authority may include
    a proposed new or revised Federal charter for the merged or
    transferee entity.  The Farm Credit Administration Board shall
    issue such charter on the approval of the plan, as prescribed in
    this subchapter, unless the Board determines that the charter
    submitted is not consistent with this chapter.
 
-SOURCE-
    (Pub. L. 92-181, title VII, Sec. 7.11, as added Pub. L. 100-233,
    title IV, Sec. 416, Jan. 6, 1988, 101 Stat. 1651; amended Pub. L.
    100-399, title IV, Sec. 408(p), Aug. 17, 1988, 102 Stat. 1002; Pub.
    L. 102-237, title V, Sec. 502(n), Dec. 13, 1991, 105 Stat. 1870.)
 
-MISC1-
                                 AMENDMENTS
      1991 - Subsec. (a)(2). Pub. L. 102-237 substituted ''60 days''
    for ''30 days''.
      1988 - Subsec. (a)(1). Pub. L. 100-399 substituted ''transfer of
    lending authority'' for ''transfer or assignment of lending
    authority'' and ''the institutions involved'' for ''such
    institutions''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-CITE-
    12 USC Part D - Mergers of Like Entities                     01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VII - RESTRUCTURING OF SYSTEM INSTITUTIONS
    Part D - Mergers of Like Entities
    .
 
-HEAD-
    Part D - Mergers of Like Entities
 
-CITE-
    12 USC Sec. 2279f                                            01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VII - RESTRUCTURING OF SYSTEM INSTITUTIONS
    Part D - Mergers of Like Entities
 
-HEAD-
    Sec. 2279f. Merger of similar banks
 
-STATUTE-
    (a) In general
      Banks organized or operating under this chapter may merge with
    banks in other districts operating under the same subchapter if the
    plan of merger is approved by -
        (1) the Farm Credit Administration Board;
        (2) the respective Boards of Directors of the banks involved;
        (3) a majority vote of the stockholders of each bank voting, in
      person or by proxy, at a duly authorized stockholders' meeting,
      with each association having a number of votes equal to the
      number of such association's voting stockholders; and
        (4) in the case of a bank for cooperatives, a majority of the
      total equity interests in such merging bank for cooperatives
      (including allocated, but not unallocated, surplus and reserves)
      held by those stockholders or subscribers to the guaranty fund of
      the bank voting.
    (b) Powers and capitalization
      Sections 2279a-2 and 2279a-3 of this title shall apply to banks
    merged under this section.
    (c) Board of directors
      (1) In general
        After a merger under subsection (a) of this section, a board of
      directors shall be created for the resulting bank.
      (2) Composition
        The board shall be composed of -
          (A) two directors elected by each of the bank boards, with at
        least one such director from each bank being elected by the
        eligible stockholders of, or subscribers to, the guaranty fund
        of the merging banks; and
          (B) one outside director elected by the directors elected
        under subparagraph (A).
      (3) Outside director
        (A) Qualifications
          The outside director elected under paragraph (2)(B) shall be
        experienced in financial services and credit, and within the
        2-year period prior to such election, shall not have been a
        borrower from, shareholder in, or director, officer, employee,
        or agent of any institution of the Farm Credit System.
        (B) Failure to elect
          If the other members of the board fail to elect an outside
        director, the Farm Credit Administration Board shall appoint a
        qualified person to serve on the board of directors until such
        member is so elected.
      (4) Bylaws
        Notwithstanding paragraph (2), the bylaws of the merged bank
      may, with the approval of the Farm Credit Administration, provide
      for a different number of directors to be selected in a different
      manner, except that the bylaws shall provide for at least one
      outside director.
 
-SOURCE-
    (Pub. L. 92-181, title VII, Sec. 7.12, as added Pub. L. 100-233,
    title IV, Sec. 416, Jan. 6, 1988, 101 Stat. 1652; amended Pub. L.
    100-399, title IV, Sec. 408(q), (r), Aug. 17, 1988, 102 Stat. 1002,
    1003.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Subsec. (b). Pub. L. 100-399, Sec. 408(q), substituted
    ''Powers and capitalization'' for ''Procedures'' in heading and, in
    amending text generally, substituted ''Sections 2279a-2 and 2279a-3
    of this title'' for ''The provisions of sections 2279a-2 through
    2279a-4 of this title''.
      Subsec. (c)(2)(B). Pub. L. 100-399, Sec. 408(r), substituted
    ''directors'' for ''members''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2279c-2 of this title.
 
-CITE-
    12 USC Sec. 2279f-1                                          01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VII - RESTRUCTURING OF SYSTEM INSTITUTIONS
    Part D - Mergers of Like Entities
 
-HEAD-
    Sec. 2279f-1. Merger of similar associations
 
-STATUTE-
    (a) In general
      Associations may voluntarily merge with other like associations
    if the plan of merger is approved by -
        (1) the Farm Credit Administration Board;
        (2) the respective Boards of Directors of the associations
      involved;
        (3) a majority vote of the stockholders of each association
      voting, in person or by proxy, at a duly authorized stockholders'
      meeting; and
        (4) the Farm Credit Banks involved.
    (b) Procedures
      The provisions of subsections (b) and (c) of section 2279c-1 of
    this title shall apply to associations merged under this section.
 
-SOURCE-
    (Pub. L. 92-181, title VII, Sec. 7.13, as added Pub. L. 100-233,
    title IV, Sec. 416, Jan. 6, 1988, 101 Stat. 1653; amended Pub. L.
    100-399, title IV, Sec. 408(s), (t), Aug. 17, 1988, 102 Stat.
    1003.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Subsec. (a)(4). Pub. L. 100-399, Sec. 408(s), substituted
    ''the Farm Credit Banks involved'' for ''the Farm Credit Bank''.
      Subsec. (b). Pub. L. 100-399, Sec. 408(t), substituted
    ''subsections (b) and (c)'' for ''subsections (b), (c), and (d)''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2279c-2 of this title.
 
-CITE-
    12 USC Part E - Taxation of Merger Transactions              01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VII - RESTRUCTURING OF SYSTEM INSTITUTIONS
    Part E - Taxation of Merger Transactions
    .
 
-HEAD-
    Part E - Taxation of Merger Transactions
 
-CITE-
    12 USC Sec. 2279g                                            01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VII - RESTRUCTURING OF SYSTEM INSTITUTIONS
    Part E - Taxation of Merger Transactions
 
-HEAD-
    Sec. 2279g. Transactions to accomplish mergers exempt from certain
        State taxes
 
-STATUTE-
      No State or political subdivision thereof may treat the merger or
    consolidation of two or more institutions of the Farm Credit System
    under this subchapter or title IV of the Agricultural Credit Act of
    1987 as resulting in a change of ownership of any property owned by
    any of such merging or consolidating institutions, for purposes of
    any law of such State or political subdivision providing for
    reassessment of property on the occurrence of a change of ownership
    or imposing a tax on the ownership or transfer of property.
 
-SOURCE-
    (Pub. L. 92-181, title VII, Sec. 7.14, as added Pub. L. 100-399,
    title IV, Sec. 408(u), Aug. 17, 1988, 102 Stat. 1003.)
 
-REFTEXT-
                             REFERENCES IN TEXT
      The Agricultural Credit Act of 1987, referred to in text, is Pub.
    L. 100-233, Jan. 6, 1988, 101 Stat. 1568, as amended.  Title IV of
    that Act amended this chapter.  For complete classification of this
    Act to the Code see Short Title of 1988 Amendment note set out
    under section 2001 of this title and Tables.
 
-MISC2-
                               EFFECTIVE DATE
      Section effective as if enacted immediately after enactment of
    Pub. L. 100-233, which was approved Jan. 6, 1988, see section
    1001(a) of Pub. L. 100-399, set out as an Effective Date of 1988
    Amendment note under section 2002 of this title.
 
-CITE-
    12 USC SUBCHAPTER VIII - AGRICULTURAL MORTGAGE SECONDARY
                  MARKET                                         01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VIII - AGRICULTURAL MORTGAGE SECONDARY MARKET
    .
 
-HEAD-
    SUBCHAPTER VIII - AGRICULTURAL MORTGAGE SECONDARY MARKET
 
-SECREF-
                  SUBCHAPTER REFERRED TO IN OTHER SECTIONS
      This subchapter is referred to in sections 2013, 2073, 2093,
    2154a, 2250 of this title.
 
-CITE-
    12 USC Sec. 2279aa                                           01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VIII - AGRICULTURAL MORTGAGE SECONDARY MARKET
 
-HEAD-
    Sec. 2279aa. Definitions
 
-STATUTE-
      For purposes of this subchapter:
      (1) Agricultural real estate
        The term ''agricultural real estate'' means -
          (A) a parcel or parcels of land, or a building or structure
        affixed to the parcel or parcels, that -
            (i) is used for the production of one or more agricultural
          commodities or products; and
            (ii) consists of a minimum acreage or is used in producing
          minimum annual receipts, as determined by the Corporation; or
          (B) a principal residence that is a single family,
        moderate-priced residential dwelling located in a rural area,
        excluding -
            (i) any community having a population in excess of 2,500
          inhabitants; and
            (ii) any dwelling, excluding the land to which the dwelling
          is affixed, with a value exceeding $100,000 (as adjusted for
          inflation).
      (2) Board
        The term ''Board'' means -
          (A) the interim board of directors established in section
        2279aa-2(a) of this title; and
          (B) the permanent board of directors established in section
        2279aa-2(b) of this title;
      as the case may be.
      (3) Certified facility
        The term ''certified facility'' means -
          (A) an agricultural mortgage marketing facility that is
        certified under section 2279aa-5 of this title; or
          (B) the Corporation and any affiliate thereof.
      (4) Corporation
        The term ''Corporation'' means the Federal Agricultural
      Mortgage Corporation established in section 2279aa-1 of this
      title.
      (5) Guarantee
        The term ''guarantee'' means the guarantee of timely payment of
      the principal and interest on securities representing interests
      in, or obligations backed by, pools of qualified loans, in
      accordance with this subchapter.
      (6) Interim board
        The term ''interim board'' means the interim board of directors
      established in section 2279aa-2(a) of this title.
      (7) Originator
        The term ''originator'' means any Farm Credit System
      institution, bank, insurance company, business and industrial
      development company, savings and loan association, association of
      agricultural producers, agricultural cooperative, commercial
      finance company, trust company, credit union, or other entity
      that originates and services agricultural mortgage loans.
      (8) Permanent board
        The term ''permanent board'' means the permanent board of
      directors established in section 2279aa-2(b) of this title.
      (9) Qualified loan
        The term ''qualified loan'' means an obligation -
          (A)(i) that is secured by a fee-simple or leasehold mortgage
        with status as a first lien, on agricultural real estate
        located in the United States that is not subject to any legal
        or equitable claims deriving from a preceding fee-simple or
        leasehold mortgage;
          (ii) of -
            (I) a citizen or national of the United States or an alien
          lawfully admitted for permanent residence in the United
          States; or
            (II) a private corporation or partnership whose members,
          stockholders, or partners holding a majority interest in the
          corporation or partnership are individuals described in
          subclause (I); and
          (iii) of a person, corporation, or partnership that has
        training or farming experience that, under criteria established
        by the Corporation, is sufficient to ensure a reasonable
        likelihood that the loan will be repaid according to its terms;
        or
          (B) that is the portion of a loan guaranteed by the Secretary
        of Agriculture pursuant to the Consolidated Farm and Rural
        Development Act (7 U.S.C. 1921 et seq.), except that -
            (i) subsections (b) through (d) of section 2279aa-6 of this
          title, and sections 2279aa-8 and 2279aa-9 of this title,
          shall not apply to the portion of a loan guaranteed by the
          Secretary or to an obligation, pool, or security representing
          an interest in or obligation backed by a pool of obligations
          relating to the portion of a loan guaranteed by the
          Secretary; and
            (ii) the portion of a loan guaranteed by the Secretary
          shall be considered to meet all standards for qualified loans
          for all purposes under this chapter.
      (10) State
        The term ''State'' has the meaning given such term in section
      2277a of this title.
 
-SOURCE-
    (Pub. L. 92-181, title VIII, Sec. 8.0, as added Pub. L. 100-233,
    title VII, Sec. 702, Jan. 6, 1988, 101 Stat. 1686; amended Pub. L.
    100-399, title VI, Sec. 601(a), Aug. 17, 1988, 102 Stat. 1005; Pub.
    L. 101-624, title XVIII, Sec. 1839, Nov. 28, 1990, 104 Stat. 3834;
    Pub. L. 104-105, title I, Sec. 101, 102, 108(c)(1), 109(b)(1), Feb.
    10, 1996, 110 Stat. 163-165.)
 
-REFTEXT-
                             REFERENCES IN TEXT
      The Consolidated Farm and Rural Development Act, referred to in
    par. (9)(B), is title III of Pub. L. 87-128, Aug. 8, 1961, 75 Stat.
    307, as amended, which is classified principally to chapter 50
    (Sec. 1921 et seq.) of Title 7, Agriculture. For complete
    classification of this Act to the Code, see Short Title note set
    out under section 1921 of Title 7 and Tables.
 
-MISC2-
                                 AMENDMENTS
      1996 - Par. (1)(B)(ii). Pub. L. 104-105, Sec. 101, substituted
    '', excluding the land to which the dwelling is affixed, with a
    value'' for ''with a purchase price''.
      Par. (3)(A). Pub. L. 104-105, Sec. 102(1), substituted ''an
    agricultural mortgage marketing'' for ''a secondary marketing
    agricultural loan''.
      Par. (3)(B). Pub. L. 104-105, Sec. 102(2), struck out '', but
    only with respect to qualified loans described in paragraph
    (9)(B)'' after ''thereof''.
      Par. (9)(B)(i). Pub. L. 104-105, Sec. 108(c)(1), 109(b)(1),
    substituted ''(d)'' for ''(f)'' and ''2279aa-8'' for ''2279aa-7,
    2279aa-8,''.
      1990 - Par. (3). Pub. L. 101-624, Sec. 1839(a), amended par. (3)
    generally.  Prior to amendment, par. (3) read as follows: ''The
    term 'certified facility' means a secondary marketing agricultural
    loan facility that is certified under section 2279aa-5 of this
    title.''
      Par. (9). Pub. L. 101-624, Sec. 1839(b), amended par. (9)
    generally.  Prior to amendment, par. (9) read as follows: ''The
    term 'qualified loan' means an obligation that -
        ''(A) is secured by a fee-simple or leasehold mortgage with
      status as a first lien on agricultural real estate located in the
      United States that is not subject to any legal or equitable
      claims deriving from a preceding fee-simple or leasehold
      mortgage;
        ''(B) is an obligation of -
          ''(i) a citizen or national of the United States or an alien
        lawfully admitted for permanent residence in the United States;
        or
          ''(ii) a private corporation or partnership whose members,
        stockholders, or partners holding a majority interest in the
        corporation or partnership are individuals described in clause
        (i); and
        ''(C) is an obligation of a person, corporation, or partnership
      that has training or farming experience that, under criteria
      established by the Corporation, is sufficient to ensure a
      reasonable likelihood that the loan will be repaid according to
      its terms.''
      1988 - Par. (9)(B)(ii). Pub. L. 100-399 substituted ''holding''
    for ''hold'' and struck out ''and'' before ''are''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
                            STATEMENT OF PURPOSE
      Section 701 of subtitle A (Sec. 701-705) of title VII of Pub. L.
    100-233 provided that: ''It is the purpose of this subtitle
    (enacting this subchapter, amending sections 2012, 2033, 2072, and
    2093 of this title and section 9105 of Title 31, Money and Finance,
    and enacting provisions set out as a note below) -
        ''(1) to establish a corporation chartered by the Federal
      Government;
        ''(2) to authorize the certification of agricultural mortgage
      marketing facilities by the corporation;
        ''(3) to provide for a secondary marketing arrangement for
      agricultural real estate mortgages that meet the underwriting
      standards of the corporation -
          ''(A) to increase the availability of long-term credit to
        farmers and ranchers at stable interest rates;
          ''(B) to provide greater liquidity and lending capacity in
        extending credit to farmers and ranchers; and
          ''(C) to provide an arrangement for new lending to facilitate
        capital market investments in providing long-term agricultural
        funding, including funds at fixed rates of interest; and
        ''(4) to enhance the ability of individuals in small rural
      communities to obtain financing for moderate-priced homes.''
                                GAO STUDIES
      Section 704 of subtitle A (Sec. 701-705) of title VII of Pub. L.
    100-233, as amended by Pub. L. 100-399, title VI, Sec. 603, Aug.
    17, 1988, 102 Stat. 1006, directed Comptroller General of United
    States to conduct studies of (1) implementation of amendments made
    by subtitle A of title VII of Pub. L. 100-233 (which enacted this
    subchapter and amended sections 2012, 2033, 2072, and 2093 of this
    title and section 9105 of Title 31, Money and Finance) by Federal
    Agricultural Mortgage Corporation and effect of operations of
    Corporation on producers, Farm Credit System, and other lenders,
    and capital markets, (2) feasibility and appropriateness of
    promoting establishment of a secondary market for securities
    representing interests in, or obligations backed by, pools of
    agricultural real estate loans for which a guarantee had not been
    provided by Federal Agricultural Mortgage Corporation, and (3)
    feasibility of expanding authority granted under amendments made by
    such subtitle A to authorize sale of securities based on or backed
    by a trust or pool consisting of loans made to farm-related and
    rural small businesses, and required, not later than Jan. 6, 1990,
    Comptroller General to transmit to Congress a report on the
    studies, including therein such recommendations for administrative
    action and legislation as might be appropriate.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2219d, 2279aa-6,
    2279aa-11 of this title.
 
-CITE-
    12 USC Part A - Establishment and Activities of Federal
                  Agricultural Mortgage Corporation              01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VIII - AGRICULTURAL MORTGAGE SECONDARY MARKET
    Part A - Establishment and Activities of Federal Agricultural
         Mortgage Corporation
    .
 
-HEAD-
    Part A - Establishment and Activities of Federal Agricultural
    Mortgage Corporation
 
-CITE-
    12 USC Sec. 2279aa-1                                         01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VIII - AGRICULTURAL MORTGAGE SECONDARY MARKET
    Part A - Establishment and Activities of Federal Agricultural
         Mortgage Corporation
 
-HEAD-
    Sec. 2279aa-1. Federal Agricultural Mortgage Corporation
 
-STATUTE-
    (a) Establishment
      (1) In general
        There is hereby established a corporation to be known as the
      Federal Agricultural Mortgage Corporation, which shall be a
      federally chartered instrumentality of the United States.
      (2) Institution within Farm Credit System
        The Corporation shall be an institution of the Farm Credit
      System.
      (3) Liability
        (A) Corporation
          The Corporation shall not be liable for any debt or
        obligation of any other institution of the Farm Credit System.
        (B) System institutions
          The Farm Credit System and System institutions (other than
        the Corporation) shall not be liable for any debt or obligation
        of the Corporation.
    (b) Duties
      The Corporation shall -
        (1) in consultation with originators, develop uniform
      underwriting, security appraisal, and repayment standards for
      qualified loans;
        (2) determine the eligibility of agricultural mortgage
      marketing facilities to contract with the Corporation for the
      provision of guarantees for specific mortgage pools;
        (3) provide guarantees for the timely repayment of principal
      and interest on securities representing interests in, or
      obligations backed by, pools of qualified loans; and
        (4) purchase qualified loans and issue securities representing
      interests in, or obligations backed by, the qualified loans,
      guaranteed for the timely repayment of principal and interest.
 
-SOURCE-
    (Pub. L. 92-181, title VIII, Sec. 8.1, as added Pub. L. 100-233,
    title VII, Sec. 702, Jan. 6, 1988, 101 Stat. 1687; amended Pub. L.
    104-105, title I, Sec. 103, Feb. 10, 1996, 110 Stat. 163.)
 
-MISC1-
                                 AMENDMENTS
      1996 - Subsec. (b)(4). Pub. L. 104-105 added par. (4).
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2279aa of this title.
 
-CITE-
    12 USC Sec. 2279aa-2                                         01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VIII - AGRICULTURAL MORTGAGE SECONDARY MARKET
    Part A - Establishment and Activities of Federal Agricultural
         Mortgage Corporation
 
-HEAD-
    Sec. 2279aa-2. Board of directors
 
-STATUTE-
    (a) Interim board
      (1) Number and appointment
        Until the permanent board of directors established in
      subsection (b) of this section first meets with a quorum of its
      members present, the Corporation shall be under the management of
      an interim board of directors composed of 9 members appointed by
      the President within 90 days after January 6, 1988, as follows:
          (A) 3 members appointed from among persons who are
        representatives of banks, other financial institutions or
        entities, and insurance companies.
          (B) 3 members appointed from among persons who are
        representatives of the Farm Credit System institutions.
          (C) 2 members appointed from among persons who are farmers or
        ranchers who are not serving, and have not served, as directors
        or officers of any financial institution or entity, of which
        not more than 1 may be a stockholder of any Farm Credit System
        institution.
          (D) 1 member appointed from among persons who represent the
        interests of the general public and are not serving, and have
        not served, as directors or officers of any financial
        institution or entity.
      (2) Political affiliation
        Not more than 5 members of the interim board shall be of the
      same political party.
      (3) Vacancy
        A vacancy in the interim board shall be filled in the manner in
      which the original appointment was made.
      (4) Continuation of membership
        If -
          (A) any member of the interim board who was appointed to such
        board from among persons who are representatives of banks,
        other financial institutions or entities, insurance companies,
        or Farm Credit System institutions ceases to be such a
        representative; or
          (B) any member who was appointed from among persons who are
        not or have not been directors or officers of any financial
        institution or entity becomes a director or an officer of any
        financial institution or entity;
      such member may continue as a member for not longer than the
      45-day period beginning on the date such member ceases to be such
      a representative or becomes such a director or officer, as the
      case may be.
      (5) Terms
        The members of the interim board shall be appointed for the
      life of such board.
      (6) Quorum
        5 members of the interim board shall constitute a quorum.
      (7) Chairperson
        The President shall designate 1 of the members of the interim
      board as the chairperson of the interim board.
      (8) Meetings
        The interim board shall meet at the call of the chairperson or
      a majority of its members.
      (9) Voting common stock
        (A) Initial offering
          Upon the appointment of sufficient members of the interim
        board to convene a meeting with a quorum present, the interim
        board shall arrange for an initial offering of common stock and
        shall take whatever other actions are necessary to proceed with
        the operations of the Corporation.
        (B) Purchasers
          Subject to subparagraph (C), the voting common stock shall be
        offered to banks, other financial entities, insurance
        companies, and System institutions under such terms and
        conditions as the interim board may adopt.
        (C) Distribution
          The voting stock shall be fairly and broadly offered to
        ensure that no institution or institutions acquire a
        disproportionate amount of the total amount of voting common
        stock outstanding of a class and that capital contributions and
        issuances of voting common stock for the contributions are
        fairly distributed between entities eligible to hold class A
        and class B stock, as provided under section 2279aa-4 of this
        title.
      (10) Termination
        The interim board shall terminate when the permanent board of
      directors established in subsection (b) of this section first
      meets with a quorum present.
    (b) Permanent board
      (1) Establishment
        Immediately after the date that banks, other financial
      institutions or entities, insurance companies, and System
      institutions have subscribed and fully paid for at least
      $20,000,000 of common stock of the Corporation, the Corporation
      shall arrange for the election and appointment of a permanent
      board of directors.  After the termination of the interim board,
      the Corporation shall be under the management of the permanent
      board.
      (2) Composition
        The permanent board shall consist of 15 members, of which -
          (A) 5 members shall be elected by holders of common stock
        that are insurance companies, banks, or other financial
        institutions or entities;
          (B) 5 members shall be elected by holders of common stock
        that are Farm Credit System institutions; and
          (C) 5 members shall be appointed by the President, by and
        with the advice and consent of the Senate -
            (i) which members shall not be, or have been, officers or
          directors of any financial institutions or entities;
            (ii) which members shall be representatives of the general
          public;
            (iii) of which members not more than 3 shall be members of
          the same political party; and
            (iv) of which members at least 2 shall be experienced in
          farming or ranching.
      (3) Presidential appointees
        The President shall appoint the members of the permanent board
      referred to in paragraph (2)(C) not later than the later of -
          (A) the date referred to in paragraph (1); or
          (B) the expiration of the 270-day period beginning on January
        6, 1988.
      (4) Vacancy
        (A) Elected members
          Subject to paragraph (6), a vacancy among the members elected
        to the permanent board in the manner described in subparagraph
        (A) or (B) of paragraph (2) shall be filled by the permanent
        board from among persons eligible for election to the position
        for which the vacancy exists.
        (B) Appointed members
          A vacancy among the members appointed to the permanent board
        under paragraph (2)(C) shall be filled in the manner in which
        the original appointment was made.
      (5) Continuation of membership
        If -
          (A) any member of the permanent board who was appointed or
        elected to the permanent board from among persons who are
        representatives of banks, other financial institutions or
        entities, insurance companies, or Farm Credit System
        institutions ceases to be such a representative; or
          (B) any member who was appointed from persons who are not or
        have not been directors or officers of any financial
        institution or entity becomes a director or an officer of any
        financial institution or entity;
      such member may continue as a member for not longer than the
      45-day period beginning on the date such member ceases to be such
      a representative, officer, or employee or becomes such a director
      or officer, as the case may be.
      (6) Terms
        (A) Appointed members
          The members appointed by the President shall serve at the
        pleasure of the President.
        (B) Elected members
          The members elected under subparagraphs (A) and (B) of
        subsection (b)(2) of this section shall each be elected
        annually for a term ending on the date of the next annual
        meeting of the common stockholders of the Corporation and shall
        serve until their successors are elected and qualified.  Any
        seat on the permanent board that becomes vacant after the
        annual election of the directors shall be filled by the members
        of the permanent board from the same category of directors, but
        only for the unexpired portion of the term.
        (C) Vacancy appointment
          Any member appointed to fill a vacancy occurring before the
        expiration of the term for which the predecessor of the member
        was appointed shall be appointed only for the remainder of such
        term.
        (D) Service after expiration of term
          A member may serve after the expiration of the term of the
        member until the successor of the member has taken office.
      (7) Quorum
        8 members of the permanent board shall constitute a quorum.
      (8) No additional pay for Federal officers or employees
        Members of the permanent board who are fulltime officers or
      employees of the United States shall receive no additional pay by
      reason of service on the permanent board.
      (9) Chairperson
        The President shall designate 1 of the members of the permanent
      board who are appointed by the President as the chairperson of
      the permanent board.
      (10) Meetings
        The permanent board shall meet at the call of the chairperson
      or a majority of its members.
    (c) Officers and staff
      The Board may appoint, employ, fix the pay of, and provide other
    allowances and benefits for such officers and employees of the
    Corporation as the Board determines to be appropriate.
 
-SOURCE-
    (Pub. L. 92-181, title VIII, Sec. 8.2, as added Pub. L. 100-233,
    title VII, Sec. 702, Jan. 6, 1988, 101 Stat. 1688; amended Pub. L.
    100-399, title VI, Sec. 601(b), Aug. 17, 1988, 102 Stat. 1005.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Subsecs. (a)(1), (b)(3)(B). Pub. L. 100-399 substituted
    ''date of the enactment'' for ''effective date'', both of which for
    purposes of codification were translated as ''January 6, 1988,''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2279aa, 2279aa-4 of this
    title.
 
-CITE-
    12 USC Sec. 2279aa-3                                         01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VIII - AGRICULTURAL MORTGAGE SECONDARY MARKET
    Part A - Establishment and Activities of Federal Agricultural
         Mortgage Corporation
 
-HEAD-
    Sec. 2279aa-3. Powers and duties of Corporation and Board
 
-STATUTE-
    (a) Guarantees
      After the Board has been duly constituted, subject to the other
    provisions of this subchapter and other commitments and
    requirements established pursuant to law, the Corporation may
    provide guarantees on terms and conditions determined by the
    Corporation of securities issued on the security of, or in
    participation in, pooled interests in qualified loans.
    (b) Duties of Board
      (1) In general
        The Board shall -
          (A) determine the general policies that shall govern the
        operations of the Corporation;
          (B) select, appoint, and determine the compensation of
        qualified persons to fill such offices as may be provided for
        in the bylaws of the Corporation; and
          (C) assign to such persons such executive functions, powers,
        and duties as may be prescribed by the bylaws of the
        Corporation or by the Board.
      (2) Executive officers and functions
        The persons elected or appointed under paragraph (1)(B) shall
      be the executive officers of the Corporation and shall discharge
      the executive functions, powers, and duties of the Corporation.
    (c) Powers of Corporation
      The Corporation shall be a body corporate and shall have the
    following powers:
        (1) To operate under the direction of its Board.
        (2) To issue stock in the manner provided in section 2279aa-4
      of this title.
        (3) To adopt, alter, and use a corporate seal, which shall be
      judicially noted.
        (4) To provide for a president, 1 or more vice presidents,
      secretary, treasurer, and such other officers, employees, and
      agents, as may be necessary, define their duties and compensation
      levels, all without regard to title 5, and require surety bonds
      or make other provisions against losses occasioned by acts of
      such persons.
        (5) To provide guarantees in the manner provided under section
      2279aa-6 of this title.
        (6) To have succession until dissolved by a law enacted by the
      Congress.
        (7) To prescribe bylaws, through the Board, not inconsistent
      with law, that shall provide for -
          (A) the classes of the stock of the Corporation; and
          (B) the manner in which -
            (i) the stock shall be issued, transferred, and retired;
            (ii) the officers, employees, and agents of the Corporation
          are selected;
            (iii) the property of the Corporation is acquired, held,
          and transferred;
            (iv) the commitments and other financial assistance of the
          Corporation are made;
            (v) the general business of the Corporation is conducted;
          and
            (vi) the privileges granted by law to the Corporation are
          exercised and enjoyed;
        (8) To prescribe such standards as may be necessary to carry
      out this subchapter.
        (9) To enter into contracts and make payments with respect to
      the contracts.
        (10) To sue and be sued in its corporate capacity and to
      complain and defend in any action brought by or against the
      Corporation in any State or Federal court of competent
      jurisdiction.
        (11) To make and perform contracts, agreements, and commitments
      with persons and entities both inside and outside of the Farm
      Credit System.
        (12) To acquire, hold, lease, mortgage or dispose of, at public
      or private sale, real and personal property, purchase or sell any
      securities or obligations, and otherwise exercise all the usual
      incidents of ownership of property necessary and convenient to
      the business of the Corporation.
        (13) To purchase, hold, sell, or assign a qualified loan, to
      issue a guaranteed security, representing an interest in, or an
      obligation backed by, the qualified loan, and to perform all the
      functions and responsibilities of an agricultural mortgage
      marketing facility operating as a certified facility under this
      subchapter.
        (14) To establish, acquire, and maintain affiliates (as such
      term is defined in section 2279aa-11(e) of this title) under
      applicable State laws to carry out any activities that otherwise
      would be performed directly by the Corporation under this
      subchapter.
        (15) To exercise such other incidental powers as are necessary
      to carry out the powers, duties, and functions of the Corporation
      in accordance with this subchapter.
    (d) Federal Reserve banks as depositaries and fiscal agents
      The Federal Reserve banks shall act as depositories for, and as
    fiscal agents or custodians of, the Corporation.
    (e) Access to book-entry system
      The Corporation shall have access to the book-entry system of the
    Federal Reserve System.
 
-SOURCE-
    (Pub. L. 92-181, title VIII, Sec. 8.3, as added Pub. L. 100-233,
    title VII, Sec. 702, Jan. 6, 1988, 101 Stat. 1691; amended Pub. L.
    100-399, title VI, Sec. 601(c), Aug. 17, 1988, 102 Stat. 1005; Pub.
    L. 102-237, title V, Sec. 503(c), Dec. 13, 1991, 105 Stat. 1877;
    Pub. L. 102-552, title III, Sec. 308(b)(1), Oct. 28, 1992, 106
    Stat. 4116; Pub. L. 104-105, title I, Sec. 104, 105, Feb. 10, 1996,
    110 Stat. 163.)
 
-MISC1-
                                 AMENDMENTS
      1996 - Subsec. (c)(13) to (15). Pub. L. 104-105, Sec. 104, added
    par. (13) and redesignated former pars. (13) and (14) as (14) and
    (15), respectively.
      Subsec. (d). Pub. L. 104-105, Sec. 105(1), which directed the
    amendment of subsec. (d) by substituting ''shall act as
    depositories for, and'' for ''may act as depositories for, or'',
    was executed by making the substitution for ''may act as
    depositaries for, or'' to reflect the probable intent of Congress.
      Subsec. (e). Pub. L. 104-105, Sec. 105(2), substituted
    ''Corporation shall have access to'' for ''Secretary of the
    Treasury may authorize the Corporation to use''.
      1992 - Subsec. (c)(13). Pub. L. 102-552 substituted
    ''2279aa-11(e)'' for ''2279aa-11(g)''.
      1991 - Subsec. (c)(13), (14). Pub. L. 102-237 added par. (13) and
    redesignated former par. (13) as (14).
      1988 - Subsec. (c)(4). Pub. L. 100-399 substituted ''such
    persons'' for ''the persons''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2279bb-2, 2279bb-7 of
    this title.
 
-CITE-
    12 USC Sec. 2279aa-4                                         01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VIII - AGRICULTURAL MORTGAGE SECONDARY MARKET
    Part A - Establishment and Activities of Federal Agricultural
         Mortgage Corporation
 
-HEAD-
    Sec. 2279aa-4. Stock issuance
 
-STATUTE-
    (a) Voting common stock
      (1) Issue
        The Corporation shall issue voting common stock having such par
      value as may be fixed by the Board from time to time.  Each share
      of voting common stock shall be entitled to one vote with rights
      of cumulative voting at all elections of directors.  Voting shall
      be by classes as described in section 2279aa-2(a)(9) of this
      title.  The stock shall be divided into two classes with the same
      par value per share.  Class A stock may be held only by entities
      that are not Farm Credit System institutions and that are
      entitled to vote for directors specified in section
      2279aa-2(b)(2)(A) of this title, including national banking
      associations (which shall be allowed to purchase and hold such
      stock).  Class B stock may be held only by Farm Credit System
      institutions that are entitled to vote for directors specified in
      section 2279aa-2(b)(2)(B) of this title.
      (2) Limitation on issue
        After the date the permanent board first meets with a quorum of
      its members present, voting common stock of the Corporation may
      be issued only to originators and certified facilities.
      (3) Authority of Board to establish terms and procedures
        The Board shall adopt such terms, conditions, and procedures
      with regard to the issue of stock under this section as may be
      necessary, including the establishment of a maximum amount
      limitation on the number of shares of voting common stock that
      may be outstanding at any time.
      (4) Transferability
        Subject to such limitations as the Board may impose, any share
      of any class of voting common stock issued under this section
      shall be transferable among the institutions or entities to which
      shares of such class of common stock may be offered under
      paragraph (1), except that, as to the Corporation, such shares
      shall be transferable only on the books of the Corporation.
      (5) Maximum number of shares
        No stockholder, other than a holder of class B stock, may own,
      directly or indirectly, more than 33 percent of the outstanding
      shares of such class of the voting common stock of the
      Corporation.
    (b) Required capital contributions
      (1) In general
        The Corporation may require each originator and each certified
      facility to make, or commit to make, such nonrefundable capital
      contributions to the Corporation as are reasonable and necessary
      to meet the administrative expenses of the Corporation.
      (2) Stock issued as consideration for contribution
        The Corporation, from time to time, shall issue to each
      originator or certified facility voting common stock evidencing
      any capital contributions made pursuant to this subsection.
    (c) Dividends
      (1) In general
        Such dividends as may be declared by the Board, in the
      discretion of the Board, shall be paid by the Corporation to the
      holders of the voting common stock of the Corporation pro rata
      based on the total number of shares of both classes of stock
      outstanding.
      (2) Reserves requirement
        No dividend may be declared or paid by the Board under this
      section unless the Board determines that adequate provision has
      been made for the reserve required under section 2279aa-10(c)(1)
      of this title.
      (3) Dividends prohibited while obligations are outstanding
        No dividend may be declared or paid by the Board under this
      section while any obligation issued by the Corporation to the
      Secretary of the Treasury under section 2279aa-13 of this title
      remains outstanding.
    (d) Nonvoting common stock
      The Corporation is authorized to issue nonvoting common stock
    having such par value as may be fixed by the Board from time to
    time.  Such nonvoting common stock shall be freely transferable,
    except that, as to the Corporation, such stock shall be
    transferable only on the books of the Corporation. Such dividends
    as may be declared by the Board, in the discretion of the Board,
    may be paid by the Corporation to the holders of the nonvoting
    common stock of the Corporation, subject to paragraphs (2) and (3)
    of subsection (c) of this section.
    (e) Preferred stock
      (1) Authority of Board
        The Corporation is authorized to issue nonvoting preferred
      stock having such par value as may be fixed by the Board from
      time to time.  Such preferred stock issued shall be freely
      transferable, except that, as to the Corporation, such stock
      shall be transferred only on the books of the Corporation.
      (2) Rights of preferred stock
        Subject to paragraphs (2) and (3) of subsection (c) of this
      section, the holders of the preferred stock shall be entitled to
      such rate of cumulative dividends, and such holders shall be
      subject to such redemption or other conversion provisions, as may
      be provided for at the time of issuance.  No dividends shall be
      payable on any share of common stock at any time when any
      dividend is due on any share of preferred stock and has not been
      paid.
      (3) Preference on termination of business
        In the event of any liquidation, dissolution, or winding up of
      the business of the Corporation, the holders of the preferred
      shares of stock shall be paid in full at the par value thereof,
      plus all accrued dividends, before the holders of the common
      shares receive any payment.
 
-SOURCE-
    (Pub. L. 92-181, title VIII, Sec. 8.4, as added Pub. L. 100-233,
    title VII, Sec. 702, Jan. 6, 1988, 101 Stat. 1692; amended Pub. L.
    100-399, title VI, Sec. 601(d), (e), Aug. 17, 1988, 102 Stat.
    1005.)
 
-MISC1-
                                 AMENDMENTS
      1988 - Subsec. (a)(1). Pub. L. 100-399, Sec. 601(d), in
    penultimate sentence, inserted ''and'' after ''institutions'' and
    inserted '', including national banking associations (which shall
    be allowed to purchase and hold such stock)'' before period at end.
      Subsec. (e)(1). Pub. L. 100-399, Sec. 601(e), substituted ''books
    of the Corporation'' for ''books of the Association''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2279aa-2, 2279aa-3,
    2279bb-7 of this title.
 
-CITE-
    12 USC Sec. 2279aa-5                                         01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VIII - AGRICULTURAL MORTGAGE SECONDARY MARKET
    Part A - Establishment and Activities of Federal Agricultural
         Mortgage Corporation
 
-HEAD-
    Sec. 2279aa-5. Certification of agricultural mortgage marketing
        facilities
 
-STATUTE-
    (a) Eligibility standards
      (1) Establishment required
        Within 120 days after the date on which the permanent board
      first meets with a quorum present, the Corporation shall issue
      standards for the certification of agricultural mortgage
      marketing facilities (other than the Corporation), including
      eligibility standards in accordance with paragraph (2).
      (2) Minimum requirements
        To be eligible to be certified under the standards referred to
      in paragraph (1), an agricultural mortgage marketing facility
      (other than the Corporation) shall -
          (A) be an institution of the Farm Credit System or a
        corporation, association, or trust organized under the laws of
        the United States or of any State;
          (B) meet or exceed capital standards established by the
        Board;
          (C) have as one of the purposes of the facility, the sale or
        resale of securities representing interests in, or obligations
        backed by, pools of qualified loans that have been provided
        guarantees by the Corporation;
          (D) demonstrate managerial ability with respect to
        agricultural mortgage loan underwriting, servicing, and
        marketing that is acceptable to the Corporation;
          (E) adopt appropriate agricultural mortgage loan
        underwriting, appraisal, and servicing standards and procedures
        that meet or exceed the standards established by the Board;
          (F) for purposes of enabling the Corporation to examine the
        facility, agree to allow officers or employees of the
        Corporation to have access to all books, accounts, financial
        records, reports, files, and all other papers, things, or
        property, of any type whatsoever, belonging to or used by the
        Corporation that are necessary to facilitate an examination of
        the operations of the facility in connection with securities,
        and the pools of qualified loans that back securities, for
        which the Corporation has provided guarantees; and
          (G) adopt appropriate minimum standards and procedures
        relating to loan administration and disclosure to borrowers
        concerning the terms and rights applicable to loans for which
        guarantee is provided, in conformity with uniform standards
        established by the Corporation.
      (3) Nondiscrimination requirement
        The standards established under this subsection shall not
      discriminate between or against Farm Credit System and non-Farm
      Credit System applicants.
    (b) Certification by Corporation
      Within 60 days after receiving an application for certification
    under this section, the Corporation shall certify the facility if
    the facility meets the standards established by the Corporation
    under subsection (a)(1) of this section.
    (c) Maximum time period for certification
      Any certification by the Corporation of an agricultural mortgage
    marketing facility shall be effective for a period determined by
    the Corporation of not to exceed 5 years.
    (d) Revocation
      (1) In general
        After notice and an opportunity for a hearing, the Corporation
      may revoke the certification of an agricultural mortgage
      marketing facility if the Corporation determines that the
      facility no longer meets the standards referred to in subsection
      (a) of this section.
      (2) Effect of revocation
        Revocation of a certification shall not affect any pool
      guarantee that has been issued by the Corporation.
    (e) Affiliation of FCS institutions with facility
      (1) Establishment of affiliate authorized
        Notwithstanding any other provision of this chapter, any Farm
      Credit System institution, acting for such institution alone or
      in conjunction with one or more other such institutions, may
      establish and operate, as an affiliate, an agricultural mortgage
      marketing facility if, within a reasonable time after such
      establishment, such facility obtains and thereafter retains
      certification under subsection (b) of this section as a certified
      facility.
      (2) Exclusive agency agreement authorized
        Any number of Farm Credit System institutions (other than the
      Corporation) may enter into an agreement with any certified
      facility (including an affiliate established under paragraph (1))
      to sell the qualified loans of such institutions exclusively to
      or through the facility.
 
-SOURCE-
    (Pub. L. 92-181, title VIII, Sec. 8.5, as added Pub. L. 100-233,
    title VII, Sec. 702, Jan. 6, 1988, 101 Stat. 1694; amended Pub. L.
    104-105, title I, Sec. 106, Feb. 10, 1996, 110 Stat. 164.)
 
-MISC1-
                                 AMENDMENTS
      1996 - Subsec. (a)(1). Pub. L. 104-105, Sec. 106(1)(A), inserted
    ''(other than the Corporation)'' after ''facilities''.
      Subsec. (a)(2). Pub. L. 104-105, Sec. 106(1)(B), inserted
    ''(other than the Corporation)'' after ''facility'' in introductory
    provisions.
      Subsec. (e)(1). Pub. L. 104-105, Sec. 106(2), struck out ''(other
    than the Corporation)'' after ''System institution''.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2279aa of this title.
 
-CITE-
    12 USC Sec. 2279aa-6                                         01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VIII - AGRICULTURAL MORTGAGE SECONDARY MARKET
    Part A - Establishment and Activities of Federal Agricultural
         Mortgage Corporation
 
-HEAD-
    Sec. 2279aa-6. Guarantee of qualified loans
 
-STATUTE-
    (a) Guarantee authorized for certified facilities
      (1) In general
        Subject to the requirements of this section and on such other
      terms and conditions as the Corporation shall consider
      appropriate, the Corporation -
          (A) shall guarantee the timely payment of principal and
        interest on the securities issued by a certified facility that
        represents interests solely in, or obligations fully backed by,
        any pool consisting solely of qualified loans which meet the
        standards established under section 2279aa-8 of this title and
        which are held by such facility; and
          (B) may issue a security, guaranteed as to the timely payment
        of principal and interest, that represents an interest solely
        in, or an obligation fully backed by, a pool consisting of
        qualified loans that -
            (i) meet the standards established under section 2279aa-8
          of this title; and
            (ii) have been purchased and held by the Corporation.
      (2) Inability of facility to pay
        If the facility is unable to make any payment of principal or
      interest on any security for which a guarantee has been provided
      by the Corporation under paragraph (1), the Corporation shall
      make such payment as and when due in cash, and on such payment
      shall be subrogated fully to the rights satisfied by such
      payment.
      (3) Power of Corporation
        Notwithstanding any other provision of law, the Corporation is
      empowered, in connection with any guarantee under this
      subsection, whether before or after any default, to provide by
      contract with the facility for the extinguishment, on default by
      the facility, of any redemption, equitable, legal, or other
      right, title, or interest of the facility in any mortgage or
      mortgages constituting the pool against which the guaranteed
      securities are issued.  With respect to any issue of guaranteed
      securities, in the event of default and pursuant otherwise to the
      terms of the contract, the mortgages that constitute such pool
      shall become the absolute property of the Corporation subject
      only to the unsatisfied rights of the holders of the securities
      based on and backed by such pool.
    (b) Other responsibilities of and limitations on certified
        facilities
      As a condition for providing any guarantees under this section
    for securities issued by a certified facility that represent
    interests in, or obligations backed by, any pool of qualified
    loans, the Corporation shall require such facility to agree to
    comply with the following requirements:
      (1) Loan default resolution
        The facility shall act in accordance with the standards of a
      prudent institutional lender to resolve loan defaults.
      (2) Subrogation of United States and Corporation to interests of
          facility
        The proceeds of any collateral, judgments, settlements, or
      guarantees received by the facility with respect to any loan in
      such pool, shall be applied, after payment of costs of collection
      -
          (A) first, to reduce the amount of any principal outstanding
        on any obligation of the Corporation that was purchased by the
        Secretary of the Treasury under section 2279aa-13 of this title
        to the extent the proceeds of such obligation were used to make
        guarantees in connection with such securities; and
          (B) second, to reimburse the Corporation for any such
        guarantee payments.
      (3) Loan servicing
        The originator of any loan in such pool shall be permitted to
      retain the right to service the loan.
      (4) Minority participation in public offerings
        The facility shall take such steps as may be necessary to
      ensure that minority owned or controlled investment banking
      firms, underwriters, and bond counsels throughout the United
      States have an opportunity to participate to a significant degree
      in any public offering of securities.
      (5) No discrimination against States with borrowers rights
        The facility may not refuse to purchase qualified loans
      originating in States that have established borrowers rights laws
      either by statute or under the constitution of such States,
      except that the facility may require discounts or charge fees
      reasonably related to costs and expenses arising from such
      statutes or constitutional provisions.
    (c) Additional authority of Board
      To ensure the liquidity of securities for which guarantees have
    been provided under this section, the Board shall adopt appropriate
    standards regarding -
        (1) the characteristics of any pool of qualified loans serving
      as collateral for such securities; and
        (2) transfer requirements.
    (d) Aggregate principal amounts of qualified loans
      (1) Initial year
        During the first year after January 6, 1988, the Corporation
      may not provide guarantees for securities representing interests
      in, or obligations backed by, qualified loans (other than loans
      which back securities issued by Farm Credit System institutions
      for which the Corporation provides a guarantee) in an aggregate
      principal amount in excess of 2 percent of the total agricultural
      real estate debt outstanding at the close of the prior calendar
      year (as published by the Board of Governors of the Federal
      Reserve System), less all Farmers Home Administration
      agricultural real estate debt.
      (2) Second year
        During the year following the year referred to in paragraph
      (1), the Corporation may not provide guarantees for securities
      representing interests in, or obligations backed by, qualified
      loans (other than loans which back securities issued by Farm
      Credit System institutions for which the Corporation provides a
      guarantee) in an additional principal amount in excess of 4
      percent of the total agricultural real estate debt outstanding at
      the close of the prior calendar year, less all Farmers Home
      Administration agricultural real estate debt.
      (3) Third year
        During the year following the year referred to in paragraph
      (2), the Corporation may not provide guarantees for securities
      representing interests in, or obligations backed by, qualified
      loans (other than loans which back securities issued by Farm
      Credit System institutions for which the Corporation provides a
      guarantee) in an additional principal amount in excess of 8
      percent of the total agricultural real estate debt outstanding at
      the close of the prior calendar year, less all Farmers Home
      Administration agricultural real estate debt.
      (4) Subsequent years
        In years subsequent to the year referred to in paragraph (3),
      the Corporation may provide guarantees without regard to the
      principal amount of the qualified loans guaranteed.
    (e) Purchase of guaranteed securities
      (1) Purchase authority
        The Corporation (and affiliates) may purchase, hold, and sell
      any securities guaranteed under this section by the Corporation
      that represent interests in, or obligations backed by, pools of
      qualified loans.  Securities issued under this section shall have
      maturities and bear rates of interest as determined by the
      Corporation.
      (2) Issuance of debt obligations
        The Corporation (and affiliates) may issue debt obligations
      solely for the purpose of obtaining amounts for the purchase of
      any securities under paragraph (1), for the purchase of qualified
      loans (as defined in section 2279aa(9) of this title), and for
      maintaining reasonable amounts for business operations (including
      adequate liquidity) relating to activities under this subsection.
      (3) Terms and limitations
        (A) Terms
          The obligations issued under this subsection shall have
        maturities and bear rates of interest as determined by the
        Corporation, and may be redeemable at the option of the
        Corporation before maturity in the manner stipulated in the
        obligations.
        (B) Requirement
          Each obligation shall clearly indicate that the obligation is
        not an obligation of, and is not guaranteed as to principal and
        interest by, the Farm Credit Administration, the United States,
        or any other agency or instrumentality of the United States
        (other than the Corporation).
        (C) Authority
          The Corporation may not issue obligations pursuant to
        paragraph (2) under this subsection while any obligation issued
        by the Corporation under section 2279aa-13(a) of this title
        remains outstanding.
 
-SOURCE-
    (Pub. L. 92-181, title VIII, Sec. 8.6, as added Pub. L. 100-233,
    title VII, Sec. 702, Jan. 6, 1988, 101 Stat. 1695; amended Pub. L.
    100-399, title VI, Sec. 601(f)-(h), Aug. 17, 1988, 102 Stat. 1005;
    Pub. L. 102-237, title V, Sec. 503(d), Dec. 13, 1991, 105 Stat.
    1877; Pub. L. 104-105, title I, Sec. 107, 108(a), (c)(2), 109(a),
    (b)(4), Feb. 10, 1996, 110 Stat. 164, 165.)
 
-MISC1-
                                 AMENDMENTS
      1996 - Subsec. (a)(1). Pub. L. 104-105, Sec. 107(1), designated
    part of existing text as subpar. (A) and added subpar. (B).
      Subsec. (a)(2). Pub. L. 104-105, Sec. 108(c)(2), struck out
    ''subject to the provisions of subsection (b) of this section''
    after ''paragraph (1),''.
      Subsec. (b). Pub. L. 104-105, Sec. 108(a), 109(a)(2),
    redesignated subsec. (d) as (b) and struck out heading and text of
    former subsec.(b).  Text read as follows: ''In the case of any pool
    referred to in subsection (a) of this section, the Corporation
    shall -
        ''(1) provide a guarantee only with respect to an individual
      pool of qualified loans on application of a certified facility;
        ''(2) provide a guarantee only if a reserve, or retained
      subordinated participating interests, in an amount equal to at
      least 10 percent of the outstanding principal amount of the loans
      constituting the pool has been established in accordance with
      this subchapter;
        ''(3) require that full recourse be taken against reserves and
      retained subordinated participating interests before any demand
      be made by the certified facility with respect to the guarantee
      of the Corporation; and
        ''(4) ensure the timely receipt of principal and interest due
      to security or obligation holders only after full recourse has
      been taken against such reserves and retained subordinated
      participating interests.''
      Subsec. (b)(4) to (6). Pub. L. 104-105, Sec. 109(b)(4),
    redesignated pars. (5) and (6) as (4) and (5), respectively, and
    struck out heading and text of former par. (4). Text read as
    follows: ''The facility shall comply with the standards adopted by
    the Board under subsection (c) of this section in establishing and
    maintaining the pool.''
      Subsec. (c). Pub. L. 104-105, Sec. 109(a), redesignated subsec.
    (e) as (c) and struck out heading and text of former subsec. (c)
    which related to standards requiring diversified pools, including
    establishment of minimum criteria for pools of qualified loans,
    provisions to encourage loans to small farms and family farmers,
    and requirements for congressional review of standards.
      Subsec. (d). Pub. L. 104-105, Sec. 109(a)(2), redesignated
    subsec. (f) as (d). Former subsec. (d) redesignated (b).
      Subsec. (d)(4) to (7). Pub. L. 104-105, Sec. 107(2), redesignated
    pars. (5) to (7) as (4) to (6), respectively, and struck out
    heading and text of former par. (4). Text read as follows: ''Each
    loan in the pool shall have been sold to the certified facility
    without recourse to the originator of such loan (other than
    recourse to any interest of such originator in a reserve
    established in connection with such loan or any subordinated
    participation interest of such originator in such loan).''
      Subsecs. (e), (f). Pub. L. 104-105, Sec. 109(a)(2), redesignated
    subsecs. (f) and (g) as (d) and (e), respectively.  Former subsec.
    (e) redesignated (c).
      Subsec. (g). Pub. L. 104-105, Sec. 109(a)(2), redesignated
    subsec. (g) as (e).
      Subsec. (g)(2). Pub. L. 104-105, Sec. 107(3), substituted
    ''2279aa(9) of this title'' for ''2279aa(9)(B) of this title''.
      1991 - Subsec. (g). Pub. L. 102-237 added subsec. (g).
      1988 - Subsec. (a)(1). Pub. L. 100-399, Sec. 601(f), substituted
    ''represents interests solely in, or obligations fully backed by,
    any pool consisting solely of qualified loans which meet the
    standards established under section 2279aa-8 of this title and
    which are'' for ''represents interests in, or obligations backed
    by, any pool of qualified loans''.
      Subsec. (e). Pub. L. 100-399, Sec. 601(g), redesignated par. (3)
    as (2) and struck out former par. (2) which read as follows:
    ''registration requirements (if any) with respect to such
    securities; and''.
      Subsec. (f)(1). Pub. L. 100-399, Sec. 601(h), substituted ''date
    of the enactment'' for ''effective date'', both of which for
    purposes of codification were translated as ''January 6, 1988,''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2279aa, 2279aa-3,
    2279aa-8, 2279bb-1, 2279bb-2 of this title.
 
-CITE-
    12 USC Sec. 2279aa-7                                         01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VIII - AGRICULTURAL MORTGAGE SECONDARY MARKET
    Part A - Establishment and Activities of Federal Agricultural
         Mortgage Corporation
 
-HEAD-
    Sec. 2279aa-7. Repealed. Pub. L. 104-105, title I, Sec. 108(b),
        Feb. 10, 1996, 110 Stat. 164
 
-MISC1-
      Section, Pub. L. 92-181, title VIII, Sec. 8.7, as added Pub. L.
    100-233, title VII, Sec. 702, Jan. 6, 1988, 101 Stat. 1698, related
    to reserves and subordinated participation interests of certified
    facilities, including provisions relating to cash contributions,
    retention of subordinated participation interests, additional
    requirements relating to reserves under section 2279aa-6(b)(2) of
    this title, and authority of Board of Directors of Federal
    Agricultural Mortgage Corporation to establish other policies and
    procedures.
 
-CITE-
    12 USC Sec. 2279aa-8                                         01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VIII - AGRICULTURAL MORTGAGE SECONDARY MARKET
    Part A - Establishment and Activities of Federal Agricultural
         Mortgage Corporation
 
-HEAD-
    Sec. 2279aa-8. Standards for qualified loans
 
-STATUTE-
    (a) Standards
      Not later than 120 days after the appointment and election of the
    permanent Board, the Corporation, in consultation with originators,
    shall establish uniform underwriting, security appraisal, and
    repayment standards for qualified loans.  In establishing standards
    for qualified loans, the Corporation shall confine corporate
    operations, so far as practicable, to mortgage loans that are
    deemed by the Board to be of such quality so as to meet,
    substantially and generally, the purchase standards imposed by
    private institutional mortgage investors.
    (b) Minimum criteria
      To further the purpose of this subchapter to provide a new source
    of long-term fixed rate financing to assist farmers and ranchers to
    purchase agricultural real estate, the standards established by the
    Board pursuant to subsection (a) of this section shall, at a
    minimum -
        (1) provide that no agricultural mortgage loan with a
      loan-to-value ratio in excess of 80 percent may be treated as a
      qualified loan;
        (2) require each borrower to demonstrate sufficient cash-flow
      to adequately service the agricultural mortgage loan;
        (3) contain sufficient documentation standards;
        (4) contain adequate standards to protect the integrity of the
      appraisal process with respect to any agricultural mortgage
      loans;
        (5) contain adequate standards to ensure that the borrower is
      or will be actively engaged in agricultural production, and
      require the borrower to certify to the originator that the
      borrower intends to continue agricultural production on the site
      involved;
        (6) minimize speculation in agricultural real estate for
      nonagricultural purposes; and
        (7) in establishing the value of agricultural real estate,
      consider the purpose for which the real estate is taxed.
    (c) Loan amount limitation
      (1) In general
        A loan may not be treated as a qualified loan if the principal
      amount of such loan exceeds $2,500,000, adjusted for inflation,
      except as provided in paragraph (2).
      (2) Acreage exception
        Paragraph (1) shall not apply with respect to any agricultural
      mortgage loan described in such paragraph if such loan is secured
      by agricultural real estate that, in the aggregate, comprises not
      more than 1,000 acres.
    (d) Congressional review
      No standard prescribed under subsection (a) of this section shall
    take effect before the later of -
        (1) the end of a period consisting of 30 legislative days and
      beginning on the date such standards are submitted to the
      Congress; or
        (2) the end of a period consisting of 90 calendar days and
      beginning on such date.
    (e) Nondiscrimination requirement
      The standards established under subsection (a) of this section
    shall not discriminate against small originators or small
    agricultural mortgage loans that are at least $50,000. The Board
    shall promote and encourage the inclusion of qualified loans for
    small farms and family farmers in the agricultural mortgage
    secondary market.
 
-SOURCE-
    (Pub. L. 92-181, title VIII, Sec. 8.8, as added Pub. L. 100-233,
    title VII, Sec. 702, Jan. 6, 1988, 101 Stat. 1700; amended Pub. L.
    100-399, title VI, Sec. 601(i), Aug. 17, 1988, 102 Stat. 1005; Pub.
    L. 104-105, title I, Sec. 110, Feb. 10, 1996, 110 Stat. 165.)
 
-MISC1-
                                 AMENDMENTS
      1996 - Subsec. (e). Pub. L. 104-105 inserted at end ''The Board
    shall promote and encourage the inclusion of qualified loans for
    small farms and family farmers in the agricultural mortgage
    secondary market.''
      1988 - Subsec. (a). Pub. L. 100-399 inserted ''permanent'' after
    ''appointment and election of the''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2279aa, 2279aa-6 of this
    title.
 
-CITE-
    12 USC Sec. 2279aa-9                                         01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VIII - AGRICULTURAL MORTGAGE SECONDARY MARKET
    Part A - Establishment and Activities of Federal Agricultural
         Mortgage Corporation
 
-HEAD-
    Sec. 2279aa-9. Exemption from restructuring and borrowers rights
        provisions for pooled loans
 
-STATUTE-
    (a) Restructuring
      Notwithstanding any other provision of law, sections 2202, 2202a,
    2202b, 2202c, 2202d, and 2219a of this title shall not apply to any
    loan included in a pool of qualified loans backing securities or
    obligations for which the Corporation provides guarantee.  The loan
    servicing standards established by the Corporation shall be
    patterned after similar standards adopted by other federally
    sponsored secondary market facilities.
    (b) Borrowers rights
      At the time of application for a loan (as defined in section
    2202a(a)(5) of this title), originators that are Farm Credit System
    institutions shall give written notice to each applicant of the
    terms and conditions of the loan, setting forth separately terms
    and conditions for pooled loans and loans that are not pooled.
    This notice shall include a statement, if applicable, that the loan
    may be pooled and that, if pooled, sections 2202, 2202a, 2202b,
    2202c, 2202d, and 2219a of this title shall not apply.  This notice
    also shall inform the applicant that he or she has the right not to
    have the loan pooled.  Within 3 days from the time of commitment,
    an applicant has the right to refuse to allow the loan to be
    pooled, thereby retaining rights under sections 2202, 2202a, 2202b,
    2202c, 2202d, and 2219a of this title, if applicable.
 
-SOURCE-
    (Pub. L. 92-181, title VIII, Sec. 8.9, as added Pub. L. 100-233,
    title VII, Sec. 702, Jan. 6, 1988, 101 Stat. 1701; amended Pub. L.
    100-399, title VI, Sec. 601(j), Aug. 17, 1988, 102 Stat. 1005; Pub.
    L. 104-105, title II, Sec. 208(b), Feb. 10, 1996, 110 Stat. 174.)
 
-MISC1-
                                 AMENDMENTS
      1996 - Subsec. (b). Pub. L. 104-105 inserted ''(as defined in
    section 2202a(a)(5) of this title)'' after ''application for a
    loan''.
      1988 - Subsecs. (a), (b). Pub. L. 100-399 substituted ''2202d,
    and 2219a'' for ''and 2219b'' wherever appearing.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in section 2279aa of this title.
 
-CITE-
    12 USC Sec. 2279aa-10                                        01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VIII - AGRICULTURAL MORTGAGE SECONDARY MARKET
    Part A - Establishment and Activities of Federal Agricultural
         Mortgage Corporation
 
-HEAD-
    Sec. 2279aa-10. Funding for guarantee; reserves of Corporation
 
-STATUTE-
    (a) Guarantee
      The Corporation shall provide guarantees for securities
    representing interests in, or obligations backed by, pools of
    qualified loans through commitments issued by the Corporation
    providing for guarantees.
    (b) Guarantee fees
      (1) Initial fee
        At the time a guarantee is issued by the Corporation, the
      Corporation shall assess the certified facility a fee of not more
      than 1/2 of 1 percent of the initial principal amount of each
      pool of qualified loans.
      (2) Annual fees
        Beginning in the second year after the date the guarantee is
      issued under paragraph (1), the Corporation may, at the end of
      each year, assess the certified facility an annual fee of not
      more than 1/2 of 1 percent of the principal amount of the loans
      then constituting the pool.
      (3) Determination of amount
        The Corporation shall establish such fees on the amount of risk
      incurred by the Corporation in providing the guarantees with
      respect to which such fee is assessed, as determined by the
      Corporation. Fees assessed under paragraphs (1) and (2) shall be
      established on an actuarially sound basis.
      (4) Review by GAO
        The Comptroller General of the United States may review, and
      submit to the Congress a report regarding, the actuarial
      soundness and reasonableness of the fees established by the
      Corporation under this subsection.
    (c) Corporation reserve against guarantees losses required
      (1) In general
        So much of the fees assessed under this section as the Board
      determines to be necessary shall be set aside by the Corporation
      in a segregated account as a reserve against losses arising out
      of the guarantee activities of the Corporation.
      (2) Exhaustion of reserve required
        The Corporation may not issue obligations to the Secretary of
      the Treasury under section 2279aa-13 of this title in order to
      meet the obligations of the Corporation with respect to any
      guarantees provided under this subchapter until the reserve
      established under paragraph (1) has been exhausted.
    (d) Fees to cover administrative costs authorized
      The Corporation may impose charges or fees in reasonable amounts
    in connection with the administration of its activities under this
    subchapter to recover its costs for performing such administration.
 
-SOURCE-
    (Pub. L. 92-181, title VIII, Sec. 8.10, as added Pub. L. 100-233,
    title VII, Sec. 702, Jan. 6, 1988, 101 Stat. 1701; amended Pub. L.
    104-316, title I, Sec. 106(f), Oct. 19, 1996, 110 Stat. 3831.)
 
-MISC1-
                                 AMENDMENTS
      1996 - Subsec. (b)(4). Pub. L. 104-316 substituted ''Review'' for
    ''Annual review'' in heading and ''may review'' for ''shall
    annually review'' in text.
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2279aa-4, 2279aa-13 of
    this title.
 
-CITE-
    12 USC Sec. 2279aa-11                                        01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VIII - AGRICULTURAL MORTGAGE SECONDARY MARKET
    Part A - Establishment and Activities of Federal Agricultural
         Mortgage Corporation
 
-HEAD-
    Sec. 2279aa-11. Supervision, examination, and report of condition
 
-STATUTE-
    (a) Regulation
      (1) Authority
        Notwithstanding any other provision of this chapter, the Farm
      Credit Administration shall have the authority to provide, acting
      through the Office of Secondary Market Oversight -
          (A) for the examination of the Corporation and its
        affiliates; and
          (B) for the general supervision of the safe and sound
        performance of the powers, functions, and duties vested in the
        Corporation and its affiliates by this subchapter, including
        through the use of the authorities granted to the Farm Credit
        Administration under -
            (i) part C of subchapter V of this chapter; and
            (ii) beginning 6 months after December 13, 1991, section
          2252(a)(9) of this title.
      (2) Considerations
        In exercising its authority pursuant to this section, the Farm
      Credit Administration shall consider -
          (A) the purposes for which the Corporation was created;
          (B) the practices appropriate to the conduct of secondary
        markets in agricultural loans; and
          (C) the reduced levels of risk associated with appropriately
        structured secondary market transactions.
      (3) Office of Secondary Market Oversight
        (A) Not later than 180 days after December 13, 1991, the Farm
      Credit Administration Board shall establish within the Farm
      Credit Administration the Office of Secondary Market Oversight.
        (B) The Farm Credit Administration Board shall carry out the
      authority set forth in this section through the Office of
      Secondary Market Oversight.
        (C) The Office of Secondary Market Oversight shall be managed
      by a full-time Director who shall be selected by and report to
      the Farm Credit Administration Board.
    (b) Examinations and audits
      (1) In general
        The financial transactions of the Corporation shall be examined
      by examiners of the Farm Credit Administration in accordance with
      the principles and procedures applicable to commercial corporate
      transactions under such rules and regulations as may be
      prescribed by the Administration.
      (2) Frequency
        The examinations shall occur at such times as the Farm Credit
      Administration Board may determine, but in no event less than
      once each year.
      (3) Access
        The examiners shall -
          (A) have access to all books, accounts, financial records,
        reports, files, and all other papers, things, or property
        belonging to or in use by the Corporation and necessary to
        facilitate the audit; and
          (B) be afforded full access for verifying transactions with
        certified facilities and other entities with whom the
        Corporation conducts transactions.
    (c) Annual report of condition
      The Corporation shall make and publish an annual report of
    condition as prescribed by the Farm Credit Administration. Each
    report shall contain financial statements prepared in accordance
    with generally accepted accounting principles and contain such
    additional information as the Farm Credit Administration may by
    regulation prescribe.  The financial statements of the Corporation
    shall be audited by an independent public accountant.
    (d) FCA assessments to cover costs
      The Farm Credit Administration shall assess the Corporation for
    the cost to the Administration of any regulatory activities
    conducted under this section, including the cost of any
    examination.
    (e) ''Affiliate'' defined
      As used in this subchapter, the term ''affiliate'' shall mean an
    entity effectively controlled or owned by the Corporation, except
    that such term shall not include an originator (as defined in
    section 2279aa(7) of this title).
    (f) Employees and personnel
      The Farm Credit Administration Board shall ensure that -
        (1) the Office of Secondary Market Oversight has access to a
      sufficient number of qualified and trained employees to
      adequately supervise the secondary market activities of the
      Corporation; and
        (2) the supervision of the powers, functions, and duties of the
      Corporation is performed, to the extent practicable, by personnel
      who are not responsible for the supervision of the banks and
      associations of the Farm Credit System.
 
-SOURCE-
    (Pub. L. 92-181, title VIII, Sec. 8.11, as added Pub. L. 100-233,
    title VII, Sec. 702, Jan. 6, 1988, 101 Stat. 1702; amended Pub. L.
    101-624, title XVIII, Sec. 1840, Nov. 28, 1990, 104 Stat. 3835;
    Pub. L. 102-237, title V, Sec. 503(a), Dec. 13, 1991, 105 Stat.
    1870; Pub. L. 102-552, title III, Sec. 308(b)(2), Oct. 28, 1992,
    106 Stat. 4116; Pub. L. 104-105, title I, Sec. 111, Feb. 10, 1996,
    110 Stat. 165.)
 
-MISC1-
                                 AMENDMENTS
      1996 - Subsec. (e). Pub. L. 104-105 substituted ''section
    2279aa(7) of this title'' for ''paragraphs (3) and (7),
    respectively, of section 2279aa of this title'' and struck out ''a
    certified facility or'' before ''an originator''.
      1992 - Subsec. (a)(1)(B)(ii). Pub. L. 102-552 substituted
    ''December 13, 1991'' for ''the date of enactment of this
    section''.
      1991 - Subsec. (a)(1). Pub. L. 102-237, Sec. 503(a)(1), amended
    par. (1) generally.  Prior to amendment, par. (1) read as follows:
    ''Notwithstanding any other provision of this chapter, the Farm
    Credit Administration shall have the authority to -
        ''(A) provide for the examination of the condition of the
      Corporation and its affiliates; and
        ''(B) provide for the general supervision of the safe and sound
      performance of the powers, functions, and duties vested in the
      Corporation and its affiliates by this subchapter, including
      through the use of the enforcement powers of the Farm Credit
      Administration under part C of subchapter V of this chapter.''
      Subsec. (a)(3). Pub. L. 102-237, Sec. 503(a)(2), added par. (3).
      Subsec. (f). Pub. L. 102-237, Sec. 503(a)(3), added subsec. (f).
      1990 - Subsec. (a)(1). Pub. L. 101-624, Sec. 1840(1), amended
    par. (1) generally.  Prior to amendment, par. (1) read as follows:
    ''Notwithstanding any other provision of this chapter, the
    regulatory authority of the Farm Credit Administration with respect
    to the Corporation shall be confined to -
        ''(A) providing for the examination of the condition of the
      Corporation; and
        ''(B) providing for the general supervision of the safe and
      sound performance of the powers, functions, and duties vested in
      the Corporation by this subchapter, including through the use of
      the enforcement powers of the Farm Credit Administration under
      part C of subchapter V of this chapter.''
      Subsec. (e). Pub. L. 101-624, Sec. 1840(2), added subsec. (e).
 
-SECREF-
                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2279aa-3, 2279bb, 2279cc
    of this title.
 
-CITE-
    12 USC Sec. 2279aa-12                                        01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VIII - AGRICULTURAL MORTGAGE SECONDARY MARKET
    Part A - Establishment and Activities of Federal Agricultural
         Mortgage Corporation
 
-HEAD-
    Sec. 2279aa-12. Securities in credit enhanced pools
 
-STATUTE-
    (a) Federal laws
      (1) Applicability of certain Federal securities laws
        For purposes of section 77c(a)(2) of title 15, no security
      representing an interest in, or obligations backed by, a pool of
      qualified loans for which guarantees have been provided by the
      Corporation shall be deemed to be a security issued or guaranteed
      by a person controlled or supervised by, or acting as an
      instrumentality of, the Government of the United States. No such
      security shall be deemed to be a ''government security'' for
      purposes of the Securities Exchange Act of 1934 (15 U.S.C. 78a et
      seq.) or for purposes of the Investment Company Act of 1940 (15
      U.S.C. 80a-1 et seq.).
      (2) No full faith and credit of the United States
        Each security for which credit enhancement has been provided by
      the Corporation shall clearly indicate that the security is not
      an obligation of, and is not guaranteed as to principal or
      interest by, the Farm Credit Administration, the United States,
      or any other agency or instrumentality of the United States
      (other than the Corporation).
    (b) State securities laws
      (1) General exemption
        Any security or obligation that has been provided a guarantee
      by the Corporation shall be exempt from any law of any State with
      respect to or requiring registration or qualification of
      securities or real estate to the same extent as any obligation
      issued by, or guaranteed as to principal and interest by, the
      United States or any agency or instrumentality of the United
      States.
      (2) State override
        The provisions of paragraph (1) shall not be applicable to any
      State that, during the 8-year period beginning on January 6,
      1988, enacts a law that -
          (A) specifically refers to this subsection; and
          (B) expressly provides that paragraph (1) shall not apply to
        the State.
    (c) Authorized investments
      (1) In general
        Securities representing an interest in, or obligations backed
      by, pools of qualified loans with respect to which the
      Corporation has provided a guarantee shall be authorized
      investments of any person, trust, corporation, partnership,
      association, business trust, or business entity created pursuant
      to or existing under the laws of the United States or any State
      to the same extent that the person, trust, corporation,
      partnership, association, business trust, or business entity is
      authorized under any applicable law to purchase, hold, or invest
      in obligations issued by or guaranteed as to principal and
      interest by the United States or any agency or instrumentality of
      the United States. Such securities or obligations may be accepted
      as security for all fiduciary, trust, and public funds, the
      investment or deposits of which shall be under the authority and
      control of the United States or any State or any officers of
      either.
      (2) State limitations on purchase, holding, or investment
        If State law limits the purchase, holding, or investment in
      obligations issued by the United States by the person, trust,
      corporation, partnership, association, business trust, or
      business entity, securities or obligations of a certified
      facility issued on which the Corporation has provided a guarantee
      shall be considered to be obligations issued by the United States
      for purposes of the limitation.
      (3) Nonapplicability of provisions
        (A) Subsequent State law
          Paragraphs (1) and (2) shall not apply with respect to a
        particular person, trust, corporation, partnership,
        association, business trust, or business entity, or class
        thereof, in any State that, prior to the expiration of the
        8-year period beginning on January 6, 1988, enacts a law that
        specifically refers to this section and either prohibits or
        provides for a more limited authority to purchase, hold, or
        invest in the securities by any person, trust, corporation,
        partnership, association, business trust, or business entity,
        or class thereof, than is provided in paragraphs (1) and (2).
        (B) Effect of subsequent State law
          The enactment by any State of a law of the type described in
        subparagraph (A) shall not affect the validity of any
        contractual commitment to purchase, hold, or invest that was
        made prior to the effective date of the law and shall not
        require the sale or other disposition of any securities
        acquired prior to the effective date of the law.
    (d) State usury laws superseded
      A provision of the Constitution or law of any State shall not
    apply to an agricultural loan made by an originator or a certified
    facility in accordance with this subchapter for sale to the
    Corporation or to a certified facility for inclusion in a pool for
    which the Corporation has provided, or has committed to provide, a
    guarantee, if the loan, not later than 180 days after the date the
    loan was made, is sold to the Corporation or included in a pool for
    which the Corporation has provided a guarantee, if the provision -
        (1) limits the rate or amount of interest, discount points,
      finance charges, or other charges that may be charged, taken,
      received, or reserved by an agricultural lender or a certified
      facility; or
        (2) limits or prohibits a prepayment penalty (either fixed or
      declining), yield maintenance, or make-whole payment that may be
      charged, taken, or received by an agricultural lender or a
      certified facility in connection with the full or partial payment
      of the principal amount due on a loan by a borrower in advance of
      the scheduled date for the payment under the terms of the loan,
      otherwise known as a prepayment of the loan principal.
 
-SOURCE-
    (Pub. L. 92-181, title VIII, Sec. 8.12, as added Pub. L. 100-233,
    title VII, Sec. 702, Jan. 6, 1988, 101 Stat. 1703; amended Pub. L.
    100-399, title VI, Sec. 601(k), (l), Aug. 17, 1988, 102 Stat. 1006;
    Pub. L. 104-105, title I, Sec. 112, Feb. 10, 1996, 110 Stat. 165.)
 
-MISC1-
                                 AMENDMENTS
      1996 - Subsec. (d). Pub. L. 104-105 added subsec. (d) and struck
    out heading and text of former subsec. (d). Text read as follows:
    ''Any provision of the constitution or law of any State which
    expressly limits the rate or amount of interest, discount points,
    finance charges, or other charges that may be charged, taken,
    received, or reserved by agricultural lenders or certified
    facilities shall not apply to any agricultural loan made by an
    originator or a certified facility in accordance with this
    subchapter that is included in a pool for which the Corporation has
    provided a guarantee.''
      1988 - Subsec. (a)(1). Pub. L. 100-399, Sec. 601(k), inserted '',
    or obligations backed by,'' before ''a pool''.
      Subsec. (b)(2). Pub. L. 100-399, Sec. 601(l), substituted ''date
    of the enactment'' for ''effective date'' both of which for
    purposes of codification was translated as ''January 6, 1988,''.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-399 effective as if enacted immediately
    after enactment of Pub. L. 100-233, which was approved Jan. 6,
    1988, see section 1001(a) of Pub. L. 100-399, set out as a note
    under section 2002 of this title.
 
-REFTEXT-
                             REFERENCES IN TEXT
      The Securities Exchange Act of 1934, referred to in subsec.
    (a)(1), is act June 6, 1934, ch. 404, 48 Stat. 881, as amended,
    which is classified principally to chapter 2B (Sec. 78a et seq.) of
    Title 15, Commerce and Trade. For complete classification of this
    Act to the Code, see section 78a of Title 15 and Tables.
      The Investment Company Act of 1940, referred to in subsec.
    (a)(1), is title I of act Aug. 22, 1940, ch. 686, 54 Stat. 789, as
    amended, which is classified generally to subchapter I (Sec. 80a-1
    et seq.) of chapter 2D of Title 15. For complete classification of
    this Act to the Code, see section 80a-51 of Title 15 and Tables.
 
-CITE-
    12 USC Sec. 2279aa-13                                        01/23/00
 
-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 23 - FARM CREDIT SYSTEM
    SUBCHAPTER VIII - AGRICULTURAL MORTGAGE SECONDARY MARKET
    Part A - Establishment and Activities of Federal Agricultural
         Mortgage Corporation
 
-HEAD-
    Sec. 2279aa-13. Authority to issue obligations to cover guarantee
        losses of Corporation
 
-STATUTE-
    (a) Sale of obligations to Treasury
      (1) In general
        Subject to the limitations contained in section 2279aa-10(c) of
      this title and the requirement of paragraph (2), the Corporation
      may issue obligations to the Secretary of the Treasury the
      proceeds of which may be used by the Corporation solely for the
      purpose of fulfilling the obligations of the Corporation under
      any guarantee provided by the Corporation under this subchapter.
      (2) Certification
        The Secretary of the Treasury may purchase obligations of the
      Corporation under paragraph (1) only if the Corporation certifies
      to the Secretary that -
          (A) the requirements of section 2279aa-10(c) of this title
        have been fulfilled; and
          (B) the proceeds of the sale of such obligations are needed
        to fulfill the obligations of the Corporation under any
        guarantee provided by the Corporation under this subchapter.
    (b) Expeditious transaction required
      Not later than 10 business days after receipt by the Secretary of
    the Treasury of any certification by the Corporation under
    subsection (a)(2) of this section, the Secretary of the Treasury
    shall purchase obligations issued by the Corporation in an amount