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12 U.S.C. § 2279aa–14 — Supervision, examination, and report of condition

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

12 U.S.C. § 2279aa–14 — Supervision, examination, and report of condition

Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 2279aa–14

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Stable record: federal_law:legal_authorities:record_usc_6a52ed1e26cd2fad45193d3e
Source file: Laws/federal/codes/united-states-code/title-12/section-2279aa14-supervision-examination-and-report-of-condition--33c9972fc5.md
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Source location: Title 12, Chapter 23, § 2279aa–14; chapter-023-farm-credit-system.md

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**(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; and (ii) beginning 6 months after December 13, 1991, [section 2252(a)(9) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2252/a/9&num=0&edition=prelim). (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 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2279aa&num=0&edition=prelim)). **(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.

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

12 U.S.C. § 2279aa — Supervisory actions applicable to level III

**(a) Mandatory supervisory actions** (1) **Capital restoration plan** — If the Corporation is classified as within level III, the Corporation shall, within the time period determined by the Director, submit to the Director a capital restoration plan and, after approval, carry out the plan. (2) **Restrictions on dividends** (A) *Prior approval* — If the Corporation is classified as within level III, the Corporation— (i) may not make any payment of dividends that would result in the Corporation being reclassified as within level IV; and (ii) may make any other payment of dividends only if the Director approves the payment before the payment. (B) *Standard for approval* — If the Corporation is classified as within level III, the Director may approve a payment of dividends by the Corporation only if the Director determines that the payment (i) will enhance the ability of the Corporation to meet the risk-based capital level and the minimum capital level promptly, (ii) will contribute to the long-term safety and soundness of the Corporation, or (iii) is otherwise in the public interest. (3) **Reclassification from level III to level IV** — The Director shall immediately reclassify the Corporation as within level IV if— (A) the Corporation is classified as within level III; and (B) (i) the Corporation does not submit a capital restoration plan that is approved by the Director; or (ii) the Director determines that the Corporation has failed to make, in good faith, reasonable efforts necessary to comply with such a capital restoration plan and fulfill the schedule for the plan approved by the Director. **(b) Discretionary supervisory actions** In addition to any other actions taken by the Director (including actions under subsection (a)), the

Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 2279aa

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