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12 U.S.C. § 2132 — Ownership of stock by borrowers

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

12 U.S.C. § 2132 — Ownership of stock by borrowers

**(a)** Each borrower entitled to hold voting stock shall, at the time a loan is made by a bank for cooperatives, own at least one share of voting stock and shall be required by the bank to invest in additional voting stock or nonvoting investment stock at that time, or from time to time, as the lending bank may determine, but the requirement for investment in stock at the time the loan is closed shall not exceed an amount equal to 10 per centum of the face amount of the loan. Such additional ownership requirements may be based on the face amount of the loan, the outstanding loan balance or on a percentage of the interest payable by the borrower during any year or during any quarter thereof, or upon such other basis as the bank determines will provide adequate capital for the operation of the bank and equitable ownership thereof among borrowers. **(b)** Notwithstanding the provisions of subsection (a) of this section, the purchase of stock need not be required with respect to that part of any loan made by a bank for cooperatives which it sells to or makes in participation with financial institutions other than any of the banks for cooperatives. In such cases the distribution of earnings of the bank for cooperatives shall be on the basis of the interest in the loan retained by such bank.

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Source file: Laws/federal/codes/united-states-code/title-12/section-2132-ownership-of-stock-by-borrowers--4ccb670f1e.md
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Source location: Title 12, Chapter 23, § 2132; chapter-023-farm-credit-system.md

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

12 U.S.C. § 636 to 636h — Repealed. Pub. L. 92–181, title V, § 5.26(a), Dec. 10, 1971, 85 Stat. 624

### Statutory Notes Section 1134f, act June 16, 1933, ch. 98, title III, § 30, 48 Stat. 261, authorized the creation of a central bank for cooperatives. See [section 2121 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2121&num=0&edition=prelim). Section 1134g, acts June 16, 1933, ch. 98, title III, § 31, 48 Stat. 262; Aug. 11, 1955, ch. 785, title I, § 104, 69 Stat. 659; June 11, 1960, Pub. L. 86–503, § 1 (part), 74 Stat. 197, provided for a board of directors for central bank for cooperatives. See [section 2123 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2123&num=0&edition=prelim). Section 1134h, acts June 16, 1933, ch. 98, title III, § 32, 48 Stat. 262; Aug. 11, 1955, ch. 785, title I, § 105, 69 Stat. 661, set out powers of board of directors for central bank for cooperative. See [section 2123 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2123&num=0&edition=prelim). Section 1134i, acts June 16, 1933, ch. 98, title III, § 33, 48 Stat. 262; Aug. 11, 1955, ch. 785, title I, § 108(a), 69 Stat. 662, provided for capital stock of central bank for cooperatives. See [section 2124 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2124&num=0&edition=prelim). Section 1134j, acts June 16, 1933, ch. 98, title III, §§ 34, 38, 48 Stat. 262, 264; June 3, 1935, ch. 164, § 13, 49 Stat. 317; Aug. 19, 1937, ch. 704, § 35, 50 Stat. 716; Oct. 31, 1949, ch. 792, title IV, § 417(b), 63 Stat. 1059; Aug. 11, 1955, ch. 785, title I, §§ 106, 108(b), 69 Stat. 661, 662; July 26, 1956, ch. 741, title I, § 105(j), 70 Stat. 665; Aug. 2, 1966, Pub. L. 89–525, § 4(a), 80 Stat. 334; Dec. 15, 1967, Pub. L. 90–204, § 3(b), 81

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

12 U.S.C. § 2132 — Earnings and reserves; application of sav-

Page 1319 TITLE 12—BANKS AND BANKING § 2132 Editorial Notes AMENDMENTS 2018—Subsec. (a). Pub. L. 115–334 struck out at end ‘‘In the case of a direct loan by the Central Bank, the borrower shall be required to own or invest in the nec- essary stock in a district bank or banks and such dis- trict bank shall be required to own a corresponding amount of stock in the Central Bank, but voting stock shall be in the one district bank, designated by the Farm Credit Administration.’’ 1988—Subsec. (a). Pub. L. 100–233 substituted ‘‘by the bank to invest’’ for ‘‘by the bank with the approval of the Farm Credit Administration to invest’’, ‘‘or upon such other basis as the bank determines’’ for ‘‘or upon such other basis as the bank, with the approval of the Farm Credit Administration, determines’’, and ‘‘in a district bank or banks and such district bank shall be required’’ for ‘‘in a district bank or banks as may be approved by the Farm Credit Administration and such district bank shall be required’’. 1980—Subsec. (a). Pub. L. 96–592 inserted provisions respecting entitlement to hold voting stock. § 2131. Loans (a) Interest rates and charges Loans made by a bank for cooperatives shall bear interest at a rate or rates determined by the board of directors of the bank from time to time. In setting rates and charges, it shall be the objective to provide the types of credit need- ed by eligible borrowers at the lowest reasonable cost on a sound business basis, taking into ac- count the net cost of money to the bank, nec- essary reserves and expenses of the bank, and services provided. The loan documents may pro- vide for the interest rate or rates to vary from time to time during the repayment period of the loan, in accordance with the rate or rates cur- ren

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