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12 U.S.C. § 2020 — Security; terms
Federal law — U.S. Code and appendices · legal_authorities
**(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
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Source location: Title 12, Chapter 23, § 2020; chapter-023-farm-credit-system.md
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**(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** Loans, other than real estate loans, and discounts made under the provisions of this subchapter shall be repayable in not more than 7 years (15 years if made to producers or harvesters of aquatic products) from the time that such are made or discounted by the Farm Credit Bank, except that the Board of Directors, under regulations of the Farm Credit Administration, may approve policies permitting loans, advances, or discounts (other than those made to producers or harvesters of aquatic products) to be repayable in not more than 10 years from the time that such are made or discounted by such bank.
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Federal law — U.S. Code and appendices · legal_authorities
**(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
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Conduct of corporate affairs**
(1) **Fair administration** — The Board of Directors shall administer the affairs of the Corporation fairly and impartially and without discrimination.
(2) **Obligations and expenses** — The Board of Directors shall determine and prescribe the manner in which the obligations of the Corporation may be incurred and the expenses of the Corporation may be allowed and paid.
(3) **Use of mails** — The Corporation may use the United States mails in the same manner and under the same conditions as the executive departments of the Federal Government.
(4) **Use of information** — The Corporation, with the consent of any board, commission, independent establishment, or executive department of the Federal Government, including any field service thereof, may avail itself of the use of information, services, and facilities thereof in carrying out this part.
(5) **Use of Farm Credit Administration personnel** — To the extent practicable, the Corporation shall use the personnel and resources of the Farm Credit Administration to minimize duplication of effort and to reduce costs.
**(b) Examination of System institutions**
(1) **Examination authority**
(A) *In general* — If the Board of Directors considers it necessary to examine an insured System bank, a production credit association, an 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), or any System institution in receivership, the Board may, using Farm Credit Administration examiners, conduct the examination using reports and other information on the System institution prepared or held by the Farm Credit Administration. Notwithstanding any
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Authority to provide assistance**
(1) **Stand-alone assistance** — The Corporation, in its sole discretion and on such terms and conditions as the Board of Directors may prescribe, may make loans to, purchase the assets or securities of, assume the liabilities of, or make contributions to, any insured System bank if such action is taken—
(A) to prevent the placing of the bank in receivership;
(B) to restore the bank to normal operation; or
(C) to reduce the risk to the Corporation posed by the bank when severe financial conditions threaten the stability of a significant number of insured System banks or of insured System banks possessing significant financial resources.
(2) **Facilitation of mergers or consolidation**
(A) *In general* — To facilitate a merger or consolidation of a qualifying insured System bank, the sale of assets of such insured System bank to another insured System bank, the assumption of such insured System bank’s liabilities by such other insured System bank, or the acquisition of the stock of such insured System bank by such other insured System bank, the Corporation, in its sole discretion and on such terms and conditions as the Board of Directors may prescribe, may—
(i) purchase any such assets or assume any such liabilities;
(ii) make loans or contributions to, or purchase debt securities of, such other insured System bank;
(iii) guarantee such other insured System bank against loss by reason of such other insured System bank’s merging or consolidating with, or assuming the liabilities and purchasing the assets of, such insured System bank; or
(iv) take any combination of the actions referred to in the preceding clauses.
(B) *Qualifying insured System bank* — For purposes of subparagraph (A), the term “
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Amount in Fund not exceeding secure base amount**
(1) **In general** — If 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 obligations** — The 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 i
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Filing certified statement** On a date to be determined in the sole discretion of the Board of Directors of the Corporation, each insured System bank that became insured before the beginning of the period for which premiums are being assessed (referred to in this section as the “period”) shall file with the Corporation a certified statement showing—
(1) the average outstanding insured obligations for the period issued by the bank;
(2)
(A) the average principal outstanding for the period on the guaranteed portion of Federal government-guaranteed loans that are in accrual status; and
(B) the average amount outstanding for the period of Federal government-guaranteed investments that are not permanently impaired (as defined in [section 2277a–4(a)(4) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2277a–4/a/4&num=0&edition=prelim));
(3)
(A) the average principal outstanding for the period on State government-guaranteed loans that are in accrual status; and
(B) the average amount outstanding for the period of State government-guaranteed investments that are not permanently impaired (as defined in [section 2277a–4(a)(4) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2277a–4/a/4&num=0&edition=prelim));
(4)
(A) the average principal outstanding for the period on loans that are in nonaccrual status; and
(B) the average amount outstanding for the period of other-than-temporarily impaired investments; and
(5) the amount of the premium due the Corporation from the bank for the period.
**(b) Contents and form of statement** The certified statement required to be filed with the Corporation under subsection (a) shall be in such form and set forth such supporting informat
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Federal law — U.S. Code and appendices · legal_authorities
### Statutory Notes
Section 711, acts July 17, 1916, ch. 245, title I, § 7, 39 Stat. 365; Aug. 18, 1959, Pub. L. 86–168, title I, § 104(h), 73 Stat. 387, provided for organization of land bank associations. See [section 2031 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2031&num=0&edition=prelim).
Section 712, acts July 17, 1916, ch. 245, title I, § 7, 39 Stat. 365; Aug. 19, 1937, ch. 704, § 21, 59 Stat. 266; Aug. 18, 1959, Pub. L. 86–168, title I, § 104(h), (i), 73 Stat. 387, provided for directors, officers, and loan committee of land bank associations. See section 2031 et seq. of this title.
Section 713, acts July 17, 1916, ch. 245, title I, § 7, 39 Stat. 365; Ex. Ord. No. 6084, Mar. 27, 1933; Aug. 18, 1959, Pub. L. 86–168, title I, § 104(i), 73 Stat. 387, provided for compensation and qualifications of directors. See [section 2032 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2032&num=0&edition=prelim).
Section 714, acts July 17, 1916, ch. 245, title I, § 7, 39 Stat. 365; Mar. 4, 1923, ch. 252, title III, § 305, 42 Stat. 1476; Ex. Ord. No. 6084, Mar. 27, 1933; Aug. 11, 1955, ch. 785, title III, § 301(b), 69 Stat. 664; Aug. 18, 1959, Pub. L. 86–168, title I, § 104(h), (i), 73 Stat. 387, set out duties of manager of each land bank association. See [section 2031 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2031&num=0&edition=prelim).
Section 715, acts July 17, 1916, ch. 245, title I, § 7, 39 Stat. 365; Aug. 18, 1959, Pub. L. 86–168, title I, § 104(h), (i), 73 Stat. 387, provided for expenses of personnel of land bank associations. See [section 2033 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12
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Federal law — U.S. Code and appendices · legal_authorities
### Statutory Notes
Section 801, acts July 17, 1916, ch. 245, title I, § 15, 39 Stat. 373; Ex. Ord. No. 6084, Mar. 27, 1933; Aug. 18, 1959, Pub. L. 86–168, title I, § 104(h), 73 Stat. 387, authorized loans by Federal land banks through agents. See [section 2020 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2020&num=0&edition=prelim).
Section 802, acts July 17, 1916, ch. 245, title I, § 15, 39 Stat. 373; Aug. 18, 1959, Pub. L. 86–168, title I, § 104(h), 73 Stat. 387, covered manner of making loan through agents. See [section 2020 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2020&num=0&edition=prelim).
Section 803, act July 17, 1916, ch. 245, title I, § 15, 39 Stat. 373, placed limits on who could be employed as agent. See [section 2020 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2020&num=0&edition=prelim).
Section 804, act July 17, 1916, ch. 245, title I, § 15, 39 Stat. 373, covered expenses of and commissions to agents. See [section 2020 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2020&num=0&edition=prelim).
Section 805, act July 17, 1916, ch. 245, title I, § 15, 39 Stat. 373, provided for addition of expenses of agents to loans. See [section 2020 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2020&num=0&edition=prelim).
Section 806, act July 17, 1916, ch. 245, title I, § 15, 39 Stat. 373, covered collection of loan payments. See [section 2020 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2020&num=0&edition=prelim).
Section 807, act July 17, 1916, ch. 245, title I, § 15, 39 Stat. 373, covered i
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Federal law — U.S. Code and appendices · legal_authorities
Page 1298
TITLE 12—BANKS AND BANKING
§ 2020
(Pub. L. 92–181, title I, § 1.11, as added Pub. L.
100–233, title IV, § 401, Jan. 6, 1988, 101 Stat. 1627;
amended Pub. L. 100–399, title IV, § 401(j), Aug.
17, 1988, 102 Stat. 996; Pub. L. 101–624, title XVIII,
§ 1832(a), Nov. 28, 1990, 104 Stat. 3832; Pub. L.
102–237, title V, § 502(a), Dec. 13, 1991, 105 Stat.
1868.)
Editorial Notes
PRIOR PROVISIONS
A prior section 2019, Pub. L. 92–181, title I, § 1.11, Dec.
10, 1971, 85 Stat. 586; Pub. L. 96–592, title I, § 108, Dec. 24,
1980, 94 Stat. 3438, related to services related to bor-
rower’s operations, prior to the general amendment of
this subchapter by Pub. L. 100–233, § 401.
AMENDMENTS
1991—Subsec. (a). Pub. L. 102–237 made technical
amendments to headings of subsec. (a) and pars. (1) and
(2).
1990—Subsec. (a). Pub. L. 101–624 designated existing
provisions as par. (1), inserted heading, substituted
‘‘some portion’’ for ‘‘at least 20 percent, or such larger
percent as may be required by the board of directors of
the bank under regulations of the Farm Credit Admin-
istration,’’, and added par. (2).
1988—Subsec. (c)(2). Pub. L. 100–399 substituted ‘‘this
subchapter or subchapter II, equipment or facilities’’
for ‘‘this subchapter, facilities’’.
Statutory Notes and Related Subsidiaries
EFFECTIVE DATE OF 1991 AMENDMENT
Amendment by Pub. L. 102–237 effective as if included
in the provision of the Food, Agriculture, Conservation,
and Trade Act of 1990, Pub. L. 101–624, to which the
amendment relates, see section 1101(b)(4) of Pub. L.
102–237, set out as a note under section 1421 of Title 7,
Agriculture.
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by Pub. L. 100–399 effective immediately
after amendment made by section 401 of Pub. L. 100–233,
which w
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