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12 U.S.C. § 3019 — Loans
Federal law — U.S. Code and appendices · legal_authorities
**(a) General requirements for loans and commitments for loans; limitations; allocation of assistance for low-income persons; criteria and factors for making loans, etc.; publication** The Bank may make loans and commitments for loans under this subsection to any organization determined by the Bank to be eligible under the provisions of [section 3015 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section3015&num=0&edition=prelim), and may purchase or discount obligations of members of such organizations if the Bank, to the exclusion of all other persons, entities, agencies, or jurisdictions, also determines that the applicant has or will have a sound organizational and financial structure, income in excess of its operating costs and assets in excess of its obligations, and a reasonable expectation of a continuing demand for its production, goods, commodities, or services, or the use of its facilities, so that the loan will be fully repayable in accordance with its terms and conditions. Commencing on October 1, 1985, the Bank shall not make any loan to a cooperative for the purpose of financing the construction, ownership, acquisition, or improvement of any structure used primarily for residential purposes if, after giving effect to such loan, the aggregate amount of all loans outstanding for such purpose would exceed 30 per centum of the gross assets of the Bank. The Board of Directors shall use its best efforts to insure that at the end of each fiscal year of the Bank at least 35 per centum of its outstanding loans are to—
(1) cooperatives at least a majority of the members of which are low-income persons, and
(2) other cooperatives, if the proceeds of such loans are directly applied to finance a facility, activity, or service tha
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Source location: Title 12, Chapter 31, § 3019; chapter-031-national-consumer-cooperative-bank.md
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**(a) General requirements for loans and commitments for loans; limitations; allocation of assistance for low-income persons; criteria and factors for making loans, etc.; publication** The Bank may make loans and commitments for loans under this subsection to any organization determined by the Bank to be eligible under the provisions of [section 3015 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section3015&num=0&edition=prelim), and may purchase or discount obligations of members of such organizations if the Bank, to the exclusion of all other persons, entities, agencies, or jurisdictions, also determines that the applicant has or will have a sound organizational and financial structure, income in excess of its operating costs and assets in excess of its obligations, and a reasonable expectation of a continuing demand for its production, goods, commodities, or services, or the use of its facilities, so that the loan will be fully repayable in accordance with its terms and conditions. Commencing on October 1, 1985, the Bank shall not make any loan to a cooperative for the purpose of financing the construction, ownership, acquisition, or improvement of any structure used primarily for residential purposes if, after giving effect to such loan, the aggregate amount of all loans outstanding for such purpose would exceed 30 per centum of the gross assets of the Bank. The Board of Directors shall use its best efforts to insure that at the end of each fiscal year of the Bank at least 35 per centum of its outstanding loans are to—
(1) cooperatives at least a majority of the members of which are low-income persons, and
(2) other cooperatives, if the proceeds of such loans are directly applied to finance a facility, activity, or service that the Board finds will be used predominantly by low-income persons.
The Board shall adopt and publish in the Federal Register rules defining the term “low-income persons” for purposes of this subsection. The criteria to be applied and the factors to be considered by the Bank in making loans, loan commitments, purchases, discounts, and guarantees shall include an assessment of the impact of the loan on existing small businesses in the eligible organizations’ business territory. The criteria and factors shall be stated in rules of the Bank which shall be published and made available to applicants and, upon request, to any other person or organization.
**(b) Repayment requirements; criteria for terms, rates, and charges; advancement of loan proceeds** Loans under this section shall be repayable in not more than forty years and, except for loans with final due date not longer than five years from the date of the loan, shall be amortized as to principal and interest. In setting the terms, rates, and charges, it shall be the objective of the Bank to provide the type 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 Bank, necessary reserve and expenses of the Bank, and the technical and other assistance attributable to loans under this section made available by the Bank. The loan terms may provide for interest rates to vary from time to time during the repayment period of the loan in accordance with the rates being charged by the Bank for new loans at such times. The proceeds of a loan under this subsection may be advanced by the borrower to its members or stockholders under circumstances described in the bylaws or rules of the Bank.
**(c) Guarantees by Bank; requirements; charges** Subject to [section 3012(13) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section3012/13&num=0&edition=prelim), the Bank may guarantee all or any part of the principal and interest of any loan made by any State or federally chartered lending institution to any borrower if such loan is to an organization that would be an eligible borrower from the Bank for a direct loan and is on terms and conditions (including the rate of interest) which would be permissible terms and conditions for such a direct loan. The Bank may impose a charge for any such guarantee. No loan may be guaranteed by the Bank if the income therefrom to the lender is excluded from such lender’s gross income for purposes of chapter 1 of title 26.
**(d) Assignment of guaranteed loans; contestability of guarantee; criteria for purchase by Bank of guaranteed loan in lieu of requiring service by lender** Any loan guaranteed under subsection (c) shall be assignable to the extent provided in the contract of guarantee as may be determined by the Bank. The guarantee shall be uncontestable, except for fraud or misrepresentation of which the holder had actual knowledge at the time he acquired the loan. The Bank in lieu of requiring such lender to service such guaranteed loan until final maturity or liquidation, may purchase the loan for the balance of the principal and accrued interest thereon without penalty, if it determines that (1) the liquidation of the loan would result in the insolvency of the borrower or deprive the borrower of assets essential to its continued operation, and (2) the loan will be repayable with revision of the loan rates, terms, or payment periods or other conditions not inconsistent with loans made by the Bank under subsection (a) of this section, which revisions the lender or other holder of such guaranteed loan is unwilling to make.
**(e) Aggregate amount of commitments to make or guarantee loans** As long as any of the class A stock of the Bank is held by the Secretary of the Treasury, the aggregate amount of commitments by the Bank to make or guarantee loans shall not exceed such amounts as may be specified in annual appropriation Acts.
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Subscriptions for capital; authorization of appropriations** The capital of the Bank shall consist of capital subscribed by borrowers from the Bank, by cooperatives eligible to become borrowers, by organizations owned and controlled by such borrowers, by foundations, trust or charitable funds, by public bodies, by other public or private investors, and by the United States. There are authorized to be appropriated not to exceed $47,000,000 for fiscal year 1982 for purposes of purchasing class A stock.
**(b) Classes of stock; general requirements respecting rights, powers, privileges, and preferences** The capital stock of the Bank shall include class B and class C stock and such other classes with such rights, powers, privileges, and preferences of the separate classes as may be specified, not inconsistent with law, in the bylaws of the Bank. Class A notes which are held by the United States shall have first preference with respect to assets and interest payments over all classes of stock issued by the Bank. So long as any class A notes are outstanding, the Bank shall not pay any dividend on any class of stock at a rate greater than the statutory interest rate payable on class A notes. Class B and class C stock shall be common stock with voting rights as provided for herein and shall be issued only to eligible borrowers and organizations controlled by such borrowers or organizations eligible to borrow, and shall be transferable only on the books of the Bank and then only to another eligible borrower. No holder of voting stock of the Bank shall be entitled to more than one vote regardless of the number of shares of stock of other classes held, except as provided in subsection (g) of this section.
**(c) Class A notes; interest payments; redemption, etc.** The holde
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Federal law — U.S. Code and appendices · legal_authorities
The economic and financial structure of this country in combination with the Nation’s natural resources and the productivity of the American people has produced one of the highest average standards of living in the world. However, the Nation has been experiencing inflation and unemployment together with an increasing gap between producers’ prices and consumers’ purchasing power. This has resulted in a growing number of our citizens, especially the elderly, the poor, and the inner city resident, being unable to share in the fruits of our Nation’s highly efficient economic system. The Congress finds that user-owned cooperatives are a proven method for broadening ownership and control of the economic organizations, increasing the number of market participants, narrowing price spreads, raising the quality of goods and services available to their membership, and building bridges between producers and consumers, and their members and patrons. The Congress also finds that consumer and other types of self-help cooperatives have been hampered in their formation and growth by lack of access to adequate cooperative credit facilities and lack of technical assistance. Therefore, the Congress finds a need for the establishment of a National Consumer Cooperative Bank which will make available necessary financial and technical assistance to cooperative self-help endeavors as a means of strengthening the Nation’s economy.
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Federal law — U.S. Code and appendices · legal_authorities
Page 1487
TITLE 12—BANKS AND BANKING
§ 3020
(d)
Assignment
of
guaranteed
loans;
contestability of guarantee; criteria for pur-
chase by Bank of guaranteed loan in lieu of
requiring service by lender
Any loan guaranteed under subsection (c)
shall be assignable to the extent provided in the
contract of guarantee as may be determined by
the Bank. The guarantee shall be uncontestable,
except for fraud or misrepresentation of which
the holder had actual knowledge at the time he
acquired the loan. The Bank in lieu of requiring
such lender to service such guaranteed loan
until final maturity or liquidation, may pur-
chase the loan for the balance of the principal
and accrued interest thereon without penalty, if
it determines that (1) the liquidation of the loan
would result in the insolvency of the borrower
or deprive the borrower of assets essential to its
continued operation, and (2) the loan will be re-
payable with revision of the loan rates, terms,
or payment periods or other conditions not in-
consistent with loans made by the Bank under
subsection (a) of this section, which revisions
the lender or other holder of such guaranteed
loan is unwilling to make.
(e) Aggregate amount of commitments to make
or guarantee loans
As long as any of the class A stock of the
Bank is held by the Secretary of the Treasury,
the aggregate amount of commitments by the
Bank to make or guarantee loans shall not ex-
ceed such amounts as may be specified in annual
appropriation Acts.
(Pub. L. 95–351, title I, § 108, Aug. 20, 1978, 92
Stat. 508; Pub. L. 97–35, title III, §§ 394(b), 396(e),
Aug. 13, 1981, 95 Stat. 436, 440; Pub. L. 99–514, § 2,
Oct. 22, 1986, 100 Stat. 2095.)
Editorial Notes
AMENDMENTS
1986—Subsec. (c). Pub. L. 99–514 substituted ‘‘Internal
R
Source: Supplied 2024 U.S. Code historical extraction · 12 U.S.C. § 3019
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