Collapse to view only § 2072. Board of directors
- § 2071. Organization and charters
- § 2072. Board of directors
- § 2073. General corporate powers
- § 2074. Production credit association capitalization
- § 2075. Short- and intermediate-term loans; participation; other financial assistance; terms; conditions; interest; security
- § 2076. Other services
- § 2076a. Liens on stock
- § 2077. Taxation
§ 2071. Organization and charters
(a) Charter
(b) Organization
(1) In general
(2) Articles of association
(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
(5) Copy to FCA
(6) Denial of charter
(7) Approval of articles
(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.
(Pub. L. 92–181, title II, § 2.0, as added Pub. L. 100–233, title IV, § 401, Jan. 6, 1988, 101 Stat. 1629; amended Pub. L. 100–399, title IV, § 401(m), Aug. 17, 1988, 102 Stat. 997; Pub. L. 102–237, title V, § 502(b), Dec. 13, 1991, 105 Stat. 1868.)
§ 2072. Board of directors
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.
(Pub. L. 92–181, title II, § 2.1, as added Pub. L. 100–233, title IV, § 401, Jan. 6, 1988, 101 Stat. 1630; amended Pub. L. 100–399, title IV, § 401(n), Aug. 17, 1988, 102 Stat. 997; Pub. L. 102–237, title V, § 502(c), Dec. 13, 1991, 105 Stat. 1868.)
§ 2073. General corporate powersEach 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.
(Pub. L. 92–181, title II, § 2.2, as added Pub. L. 100–233, title IV, § 401, Jan. 6, 1988, 101 Stat. 1630; amended Pub. L. 100–399, title IV, § 401(o), Aug. 17, 1988, 102 Stat. 997.)
§ 2074. Production credit association capitalization
(a) In general
(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
(Pub. L. 92–181, title II, § 2.3, as added Pub. L. 100–233, title IV, § 401, Jan. 6, 1988, 101 Stat. 1632; amended Pub. L. 102–552, title V, § 501, Oct. 28, 1992, 106 Stat. 4129.)
§ 2075. Short- and intermediate-term loans; participation; other financial assistance; terms; conditions; interest; security
(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
(2) Limitation
(3) Rural areas
(4) Equipment
(c) Interest rates and charges
(1) In general
(2) Setting of rates
(3) Varying rates
(4) Prior approval
(Pub. L. 92–181, title II, § 2.4, as added Pub. L. 100–233, title IV, § 401, Jan. 6, 1988, 101 Stat. 1632; amended Pub. L. 100–399, title IV, § 401(p), (q), Aug. 17, 1988, 102 Stat. 997; Pub. L. 101–624, title XVIII, § 1832(b), Nov. 28, 1990, 104 Stat. 3832; Pub. L. 115–334, title V, § 5411(3), Dec. 20, 2018, 132 Stat. 4679.)
§ 2076. Other services
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.
(Pub. L. 92–181, title II, § 2.5, as added Pub. L. 100–233, title IV, § 401, Jan. 6, 1988, 101 Stat. 1633.)
§ 2076a. Liens on stock
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.
(Pub. L. 92–181, title II, § 2.6, as added Pub. L. 101–624, title XVIII, § 1833(2), Nov. 28, 1990, 104 Stat. 3832.)
§ 2077. Taxation
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.
(Pub. L. 92–181, title II, § 2.7, formerly § 2.6, as added Pub. L. 100–233, title IV, § 401, Jan. 6, 1988, 101 Stat. 1633; amended Pub. L. 100–399, title IV, § 401(r), Aug. 17, 1988, 102 Stat. 998; renumbered § 2.7, Pub. L. 101–624, title XVIII, § 1833(1), Nov. 28, 1990, 104 Stat. 3832.)