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12 U.S.C. § 2279aa–9 — Guarantee of qualified loans
Federal law — U.S. Code and appendices · legal_authorities
**(a) Guarantee authorized for certified facilities**
(1) **In general** — Subject to the requirements of this section and on such other terms and conditions as the Corporation shall consider appropriate, the Corporation—
(A) shall guarantee the timely payment of principal and interest on the securities issued by a certified facility that represents interests solely in, or obligations fully backed by, any pool consisting solely of qualified loans which meet the applicable standards established under [section 2279aa–8 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2279aa-8&num=0&edition=prelim) and which are held by such facility; and
(B) may issue a security, guaranteed as to the timely payment of principal and interest, that represents an interest solely in, or an obligation fully backed by, a pool consisting of qualified loans that—
(i) meet the applicable standards established under [section 2279aa–8 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2279aa-8&num=0&edition=prelim); and
(ii) have been purchased and held by the Corporation.
(2) **Inability of facility to pay** — If the facility is unable to make any payment of principal or interest on any security for which a guarantee has been provided by the Corporation under paragraph (1), the Corporation shall make such payment as and when due in cash, and on such payment shall be subrogated fully to the rights satisfied by such payment.
(3) **Power of Corporation** — Notwithstanding any other provision of law, the Corporation is empowered, in connection with any guarantee under this subsection, whether before or after any default, to provide by contract with the facility for the extinguishment, on default by the
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Stable record: federal_law:legal_authorities:record_usc_e9dda6cd440e33a7fe391acd
Source file: Laws/federal/codes/united-states-code/title-12/section-2279aa9-guarantee-of-qualified-loans--403d67b966.md
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Source location: Title 12, Chapter 23, § 2279aa–9; chapter-023-farm-credit-system.md
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**(a) Guarantee authorized for certified facilities**
(1) **In general** — Subject to the requirements of this section and on such other terms and conditions as the Corporation shall consider appropriate, the Corporation—
(A) shall guarantee the timely payment of principal and interest on the securities issued by a certified facility that represents interests solely in, or obligations fully backed by, any pool consisting solely of qualified loans which meet the applicable standards established under [section 2279aa–8 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2279aa-8&num=0&edition=prelim) and which are held by such facility; and
(B) may issue a security, guaranteed as to the timely payment of principal and interest, that represents an interest solely in, or an obligation fully backed by, a pool consisting of qualified loans that—
(i) meet the applicable standards established under [section 2279aa–8 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2279aa-8&num=0&edition=prelim); and
(ii) have been purchased and held by the Corporation.
(2) **Inability of facility to pay** — If the facility is unable to make any payment of principal or interest on any security for which a guarantee has been provided by the Corporation under paragraph (1), the Corporation shall make such payment as and when due in cash, and on such payment shall be subrogated fully to the rights satisfied by such payment.
(3) **Power of Corporation** — Notwithstanding any other provision of law, the Corporation is empowered, in connection with any guarantee under this subsection, whether before or after any default, to provide by contract with the facility for the extinguishment, on default by the facility, of any redemption, equitable, legal, or other right, title, or interest of the facility in any mortgage or mortgages constituting the pool against which the guaranteed securities are issued. With respect to any issue of guaranteed securities, in the event of default and pursuant otherwise to the terms of the contract, the mortgages that constitute such pool shall become the absolute property of the Corporation subject only to the unsatisfied rights of the holders of the securities based on and backed by such pool.
**(b) Other responsibilities of and limitations on certified facilities** As a condition for providing any guarantees under this section for securities issued by a certified facility that represent interests in, or obligations backed by, any pool of qualified loans, the Corporation shall require such facility to agree to comply with the following requirements:
(1) **Loan default resolution** — The facility shall act in accordance with the standards of a prudent institutional lender to resolve loan defaults.
(2) **Subrogation of United States and Corporation to interests of facility** — The proceeds of any collateral, judgments, settlements, or guarantees received by the facility with respect to any loan in such pool, shall be applied, after payment of costs of collection—
(A) first, to reduce the amount of any principal outstanding on any obligation of the Corporation that was purchased by the Secretary of the Treasury under [section 2279aa–13 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2279aa-13&num=0&edition=prelim) to the extent the proceeds of such obligation were used to make guarantees in connection with such securities; and
(B) second, to reimburse the Corporation for any such guarantee payments.
(3) **Loan servicing** — The originator of any loan in such pool shall be permitted to retain the right to service the loan.
(4) **Minority participation in public offerings** — The facility shall take such steps as may be necessary to ensure that minority owned or controlled investment banking firms, underwriters, and bond counsels throughout the United States have an opportunity to participate to a significant degree in any public offering of securities.
(5) **No discrimination against States with borrowers rights** — The facility may not refuse to purchase qualified loans originating in States that have established borrowers rights laws either by statute or under the constitution of such States, except that the facility may require discounts or charge fees reasonably related to costs and expenses arising from such statutes or constitutional provisions.
**(c) Additional authority of Board** To ensure the liquidity of securities for which guarantees have been provided under this section, the Board shall adopt appropriate standards regarding—
(1) the characteristics of any pool of qualified loans serving as collateral for such securities; and
(2) transfer requirements.
**(d) Purchase of guaranteed securities**
(1) **Purchase authority** — The Corporation (and affiliates) may purchase, hold, and sell any securities guaranteed under this section by the Corporation that represent interests in, or obligations backed by, pools of qualified loans. Securities issued under this section shall have maturities and bear rates of interest as determined by the Corporation.
(2) **Issuance of debt obligations** — The Corporation (and affiliates) may issue debt obligations solely for the purpose of obtaining amounts for the purchase of any securities under paragraph (1), for the purchase of qualified loans (as defined in [section 2279aa of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2279aa&num=0&edition=prelim)), and for maintaining reasonable amounts for business operations (including adequate liquidity) relating to activities under this subsection.
(3) **Terms and limitations**
(A) *Terms* — The obligations issued under this subsection shall have maturities and bear rates of interest as determined by the Corporation, and may be redeemable at the option of the Corporation before maturity in the manner stipulated in the obligations.
(B) *Requirement* — Each obligation shall clearly indicate that the obligation is not an obligation of, and is not guaranteed as to principal and interest by, the Farm Credit Administration, the United States, or any other agency or instrumentality of the United States (other than the Corporation).
(C) *Authority* — The Corporation may not issue obligations pursuant to paragraph (2) under this subsection while any obligation issued by the Corporation under [section 2279aa–13(a) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2279aa–13/a&num=0&edition=prelim) remains outstanding.
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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
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 2002
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Federal law — U.S. Code and appendices · legal_authorities
**(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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Federal law — U.S. Code and appendices · legal_authorities
**(a) Definitions** In this section:
(1) **Agricultural commodity** — The term “agricultural commodity” has the meaning given the term in [section 5602 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title7-section5602&num=0&edition=prelim).
(2) **Geographically disadvantaged farmer or rancher** — The term “geographically disadvantaged farmer or rancher” has the meaning given the term in section 10906(a) of the Farm Security and Rural Investment Act of 2002 ([7 U.S.C. 2204](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title7-section2204&num=0&edition=prelim) note; Public Law 107–171).
**(b) Authorization** Subject to the availability of funds under subsection (d), the Secretary may provide geographically disadvantaged farmers or ranchers direct reimbursement payments for activities described in subsection (c).
**(c) Transportation**
(1) **In general** — Subject to paragraphs (2) and (3), the Secretary may provide direct reimbursement payments to a geographically disadvantaged farmer or rancher to transport an agricultural commodity, or inputs used to produce an agricultural commodity, during a fiscal year.
(2) **Proof of eligibility** — To be eligible to receive assistance under paragraph (1), a geographically disadvantaged farmer or rancher shall demonstrate to the Secretary that transportation of the agricultural commodity or inputs occurred over a distance of more than 30 miles, as determined by the Secretary.
(3) **Amount**
(A) *In general* — Subject to paragraph (2), the amount of direct reimbursement payments made to a geographically disadvantaged farmer or rancher under this section for a fiscal year shall equal the product obtained by multiplying—
(i) the amount of costs incurred by the geographically di
Source: Supplied U.S. Code snapshot — release unconfirmed · 7 U.S.C. § 8701
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