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12 U.S.C. § 2002 — Conservatorship; liquidation; receivership

Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 2002 — Conservatorship; liquidation; receivership

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Stable record: federal_law:legal_authorities:record_usc_644a974fd4b952112cb86f8b
Source file: Laws/federal/codes/united-states-code/title-12/section-2002-conservatorship-liquidation-receivership--a9ba9ae512.md
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Source location: Title 12, Chapter 23, § 2002; chapter-023-farm-credit-system.md

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**(a) Voluntary liquidation** The Corporation may voluntarily liquidate only with the consent of, and in accordance with a plan of liquidation approved by, the Farm Credit Administration Board. **(b) Involuntary liquidation** (1) **In general** — The Farm Credit Administration Board may appoint a conservator or receiver for the Corporation under the circumstances specified in [section 2183(b) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2183/b&num=0&edition=prelim). (2) **Application** — In applying [section 2183(b) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2183/b&num=0&edition=prelim) to the Corporation under paragraph (1)— (A) the Corporation shall also be considered insolvent if the Corporation is unable to pay its debts as they fall due in the ordinary course of business; (B) a conservator may also be appointed for the Corporation if the authority of the Corporation to purchase qualified loans or issue or guarantee loan-backed securities is suspended; and (C) a receiver may also be appointed for the Corporation if— (i) (I) the authority of the Corporation to purchase qualified loans or issue or guarantee loan-backed securities is suspended; or (II) the Corporation is classified under [section 2279bb–4 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2279bb-4&num=0&edition=prelim) as within level III or IV and the alternative actions available under part B are not satisfactory; and (ii) the Farm Credit Administration determines that the appointment of a conservator would not be appropriate. (3) **No effect on supervisory actions** — The grounds for appointment of a conservator for the Corporation under this subsection shall be in addition to those in [section 2279bb–6 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2279bb-6&num=0&edition=prelim). **(c) Appointment of conservator or receiver** (1) **Qualifications** — Notwithstanding [section 2183(b) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2183/b&num=0&edition=prelim), if a conservator or receiver is appointed for the Corporation, the conservator or receiver shall be— (A) the Farm Credit Administration or any other governmental entity or employee, including the Farm Credit System Insurance Corporation; or (B) any person that— (i) has no claim against, or financial interest in, the Corporation or other basis for a conflict of interest as the conservator or receiver; and (ii) has the financial and management expertise necessary to direct the operations and affairs of the Corporation and, if necessary, to liquidate the Corporation. (2) **Compensation** (A) *In general* — A conservator or receiver for the Corporation and professional personnel (other than a Federal employee) employed to represent or assist the conservator or receiver may be compensated for activities conducted as, or for, a conservator or receiver. (B) *Limit on compensation* — Compensation may not be provided in amounts greater than the compensation paid to employees of the Federal Government for similar services, except that the Farm Credit Administration may provide for compensation at higher rates that are not in excess of rates prevailing in the private sector if the Farm Credit Administration determines that compensation at higher rates is necessary in order to recruit and retain competent personnel. (C) *Contractual arrangements* — The conservator or receiver may contract with any governmental entity, including the Farm Credit System Insurance Corporation, to make personnel, services, and facilities of the entity available to the conservator or receiver on such terms and compensation arrangements as shall be mutually agreed, and each entity may provide the same to the conservator or receiver. (3) **Expenses** — A valid claim for expenses of the conservatorship or receivership (including compensation under paragraph (2)) and a valid claim with respect to a loan made under subsection (f) shall— (A) be paid by the conservator or receiver from funds of the Corporation before any other valid claim against the Corporation; and (B) may be secured by a lien, on such property of the Corporation as the conservator or receiver may determine, that shall have priority over any other lien. (4) **Liability** — If the conservator or receiver for the Corporation is not a Federal entity, or an officer or employee of the Federal Government, the conservator or receiver shall not be personally liable for damages in tort or otherwise for an act or omission performed pursuant to and in the course of the conservatorship or receivership, unless the act or omission constitutes gross negligence or any form of intentional tortious conduct or criminal conduct. (5) **Indemnification** — The Farm Credit Administration may allow indemnification of the conservator or receiver from the assets of the conservatorship or receivership on such terms as the Farm Credit Administration considers appropriate. **(d) Judicial review of appointment** (1) **In general** — Notwithstanding subsection (i)(1), not later than 30 days after a conservator or receiver is appointed under subsection (b), the Corporation may bring an action in the United States District Court for the District of Columbia for an order requiring the Farm Credit Administration Board to remove the conservator or receiver. The court shall, on the merits, dismiss the action or direct the Farm Credit Administration Board to remove the conservator or receiver. (2) **Stay of other actions** — On the commencement of an action under paragraph (1), any court having jurisdiction of any other action or enforcement proceeding authorized under this chapter to which the Corporation is a party shall stay the action or proceeding during the pendency of the action for removal of the conservator or receiver. **(e) General powers of conservator or receiver** The conservator or receiver for the Corporation shall have such powers to conduct the conservatorship or receivership as shall be provided pursuant to regulations adopted by the Farm Credit Administration Board. Such powers shall be comparable to the powers available to a conservator or receiver appointed pursuant to [section 2183(b) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2183/b&num=0&edition=prelim). **(f) Borrowings for working capital** (1) **In general** — If the conservator or receiver of the Corporation determines that it is likely that there will be insufficient funds to pay the ongoing administrative expenses of the conservatorship or receivership or that there will be insufficient liquidity to fund maturing obligations of the conservatorship or receivership, the conservator or receiver may borrow funds in such amounts, from such sources, and at such rates of interest as the conservator or receiver considers necessary or appropriate to meet the administrative expenses or liquidity needs of the conservatorship or receivership. (2) **Working capital from Farm Credit banks** — A Farm Credit bank may loan funds to the conservator or receiver for a loan authorized under paragraph (1) or, in the event of receivership, a Farm Credit bank may purchase assets of the Corporation. **(g) Agreements against interests of conservator or receiver** No agreement that tends to diminish or defeat the right, title, or interest of the conservator or receiver for the Corporation in any asset acquired by the conservator or receiver as conservator or receiver for the Corporation shall be valid against the conservator or receiver unless the agreement— (1) is in writing; (2) is executed by the Corporation and any person claiming an adverse interest under the agreement, including the obligor, contemporaneously with the acquisition of the asset by the Corporation; (3) is approved by the Board or an appropriate committee of the Board, which approval shall be reflected in the minutes of the Board or committee; and (4) has been, continuously, from the time of the agreement’s execution, an official record of the Corporation. **(h) Report to Congress** On a determination by the receiver for the Corporation that there are insufficient assets of the receivership to pay all valid claims against the receivership, the receiver shall submit to the Secretary of the Treasury, the Committee on Agriculture of the House of Representatives, and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report on the financial condition of the receivership. **(i) Termination of authorities** (1) **Corporation** — The charter of the Corporation shall be canceled, and the authority provided to the Corporation by this subchapter shall terminate, on such date as the Farm Credit Administration Board determines is appropriate following the placement of the Corporation in receivership, but not later than the conclusion of the receivership and discharge of the receiver. (2) **Oversight** — The Office of Secondary Market Oversight established under [section 2279aa–11 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2279aa-11&num=0&edition=prelim) shall be abolished, and [section 2279aa–11(a) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2279aa–11/a&num=0&edition=prelim) and part B shall have no force or effect, on such date as the Farm Credit Administration Board determines is appropriate following the placement of the Corporation in receivership, but not later than the conclusion of the receivership and discharge of the receiver.

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 2013 — Establishment, charters, titles, branches

**(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: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 2013

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 2014 — Board of directors

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: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 2014

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 2015 — General corporate powers

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

Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 2015

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 2017 — Lending authority

**(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](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2279b/a&num=0&edition=prelim). **(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 associatio

Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 2017

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 2018 — Interest rates and other charges

**(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: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 2018

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 2020 — Security; terms

**(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** L

Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 2020

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 2021 — Purposes for extensions of credit

**(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

Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 2021

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 2022 — Related services

**(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** (1) **In general** — 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](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2279b&num=0&edition=prelim), and other financing institution described in [section 2015(b)(1)(B) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2015/b/1/B&num=0&edition=prelim) in the district in which the bank is located to cover the costs of making premium payments under part E of subchapter V. (2) **Computation** — The assessment on any association or other financing institution described in paragraph (1) for any period shall be computed in an equitable manner, as determined by the Corporation.

Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 2022

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 2072 — Taxation

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](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title31-section3124&num=0&edition=prelim)).

Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 2072

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 2073 — Organization and charters

**(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 Administratio

Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 2073

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