View all text of Part E [§ 2277a - § 2277a-14]
§ 2277a–4. Premiums
(a) Amount in Fund not exceeding secure base amount
(1) In generalIf 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 (3), the premium due from any insured System bank for the calendar year shall be equal to the sum of—
(A) the average outstanding insured obligations issued by the bank for the calendar year, after deducting from the obligations the percentages of the guaranteed portions of loans and investments described in paragraph (2), multiplied by 0.0020; and
(B) the product obtained by multiplying—
(i) the sum of—(I) the average principal outstanding for the calendar year on loans made by the bank that are in nonaccrual status; and(II) the average amount outstanding for the calendar year of other-than-temporarily impaired investments made by the bank; by
(ii) 0.0010.
(2) Deductions from average outstanding insured obligationsThe average outstanding insured obligations issued by the bank for the calendar year referred to in paragraph (1)(A) shall be reduced by deducting from the obligations the sum of (as determined by the Corporation)—
(A) 90 percent of each of—
(i) the average principal outstanding for the calendar year on the guaranteed portions of Federal government-guaranteed loans made by the bank that are in accrual status; and
(ii) the average amount outstanding for the calendar year of the guaranteed portions of Federal government-guaranteed investments made by the bank that are not permanently impaired; and
(B) 80 percent of each of—
(i) the average principal outstanding for the calendar year on the guaranteed portions of State government-guaranteed loans made by the bank that are in accrual status; and
(ii) the average amount outstanding for the calendar year of the guaranteed portions of State government-guaranteed investments made by the bank that are not permanently impaired.
(3) Reduced premiums
(4) Definition of government-guaranteed loans or investmentsIn this section, the term “government-guaranteed”, when applied to a loan or an investment, means a loan, credit, or investment, or portion of a loan, credit, or investment, that is 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
(c) Secure base amount
(1) In general
(2) AdjustmentThe aggregate outstanding insured obligations of all insured System banks under paragraph (1) shall be adjusted downward to exclude an amount equal to the sum of (as determined by the corporation)—
(A) 90 percent of each of—
(i) the guaranteed portions of principal outstanding on Federal government-guaranteed loans in accrual status made by the banks; and
(ii) the guaranteed portions of the amount of Federal government-guaranteed investments made by the banks that are not permanently impaired; and
(B) 80 percent of each of—
(i) the guaranteed portions of principal outstanding on State government-guaranteed loans in accrual status made by the banks; and
(ii) the guaranteed portions of the amount of State government-guaranteed investments made by the banks that are not permanently impaired.
(d) Determination of loan and investment amountsFor the purpose of subsections (a) and (c), the principal outstanding on all loans made by an insured System bank, and the amount outstanding on all investments made by an insured System bank, shall be determined based on—
(1) all loans or investments made 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 or investments because such association is receiving, or has received, funds provided through the insured System bank;
(2) all loans or investments made 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 or investments because such entity is receiving, or has received, funds provided through the insured System bank; and
(3) all loans or investments made 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 AccountsThere 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
(3) Annual allocations
(4) Allocation formulaFrom 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 1
1 So in original. Probably should be “Allocated Insurance Reserves Account”.
of each insured system 22 So in original. Probably should be “System”.
bank an amount that bears the same ratio to the total amount (less any amount credited under subparagraph (A)) as—(i) the average principal outstanding for the calendar year on insured obligations issued by the bank (after deducting from the principal the percentages of the guaranteed portions of loans and investments described in subsection (a)(2)); bears to
(ii) the average principal outstanding for the calendar year on insured obligations issued by all insured System banks (after deducting from the principal the percentages of the guaranteed portions of loans and investments described in subsection (a)(2)).
(5) Use of funds in Allocated Insurance Reserves AccountsTo 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 generalAs soon as practicable during each calendar year, the Corporation may—
(i) subject to subparagraph (D), pay to each insured System bank, in a manner determined by the Corporation, an amount equal to the balance in the Allocated Insurance Reserves Account of the System bank; and
(ii) subject to subparagraphs (C) and (E), 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 at the time of the termination of the Financial Assistance Corporation, of the balance in the Allocated Insurance Reserves Account established under paragraph (1)(B).
(B) Authority to eliminate or reduce payments
(C) Reimbursement for Financial Assistance Corporation stock
(i) Sufficient funding
(ii) Termination of accountOn disbursement of an amount equal to $56,000,000, the Corporation shall—(I) close the account established under paragraph (1)(B); and(II) 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
(E) Exception for previously reimbursed associations
(Pub. L. 92–181, title V, § 5.55, as added Pub. L. 100–233, title III, § 302, Jan. 6, 1988, 101 Stat. 1612; amended Pub. L. 100–399, title III, § 302(c)–(e), Aug. 17, 1988, 102 Stat. 994; Pub. L. 101–220, § 6(a), Dec. 12, 1989, 103 Stat. 1879; Pub. L. 104–105, title II, § 215(a)(1), (2)(A), (b), (c), Feb. 10, 1996, 110 Stat. 175, 176, 179; Pub. L. 107–171, title V, § 5403(a)(1), May 13, 2002, 116 Stat. 350; Pub. L. 110–234, title V, § 5404, May 22, 2008, 122 Stat. 1154; Pub. L. 110–246, § 4(a), title V, § 5404, June 18, 2008, 122 Stat. 1664, 1916.)