12 U.S.C. § 2126 — Retirement of stock

Page 1314 TITLE 12—BANKS AND BANKING § 2125 cept that if such holder has not been a borrower from the bank in which it holds such stock with- in a period of two years next preceding the date fixed by the Farm Credit Administration prior to the commencement of voting, it shall not be entitled to vote. (e) Nonvoting investment stock Nonvoting investment stock may be issued in such series and in such amounts as may be de- termined by the board and may be exchanged for voting stock or sold or transferred to any person subject to the approval of the issuing bank. (f) Participation certificates Participation certificates may be issued to parties to whom voting stock may not be issued. (Pub. L. 92–181, title III, § 3.3, Dec. 10, 1971, 85 Stat. 603; Pub. L. 96–592, title III, § 302, Dec. 24, 1980, 94 Stat. 3443; Pub. L. 99–205, title II, § 205(e)(3), (4), Dec. 23, 1985, 99 Stat. 1705; Pub. L. 100–233, title VIII, §§ 802(o), 805(k), Jan. 6, 1988, 101 Stat. 1712, 1715; Pub. L. 110–234, title V, §§ 5402, 5403(a), May 22, 2008, 122 Stat. 1154; Pub. L. 110–246, § 4(a), title V, §§ 5402, 5403(a), June 18, 2008, 122 Stat. 1664, 1915.) Editorial Notes CODIFICATION Pub. L. 110–234 and Pub. L. 110–246 made identical amendments to this section. The amendments by Pub. L. 110–234 were repealed by section 4(a) of Pub. L. 110–246. AMENDMENTS 2008—Subsec. (b). Pub. L. 110–246, § 5402, which di- rected substitution of ‘‘par’’ for ‘‘per’’, could not be ex- ecuted because ‘‘per’’ did not appear. Subsec. (c)(ii), (iii). Pub. L. 110–246, § 5403(a), added cl. (ii) and redesignated former cl. (ii) as (iii). 1988—Subsec. (a). Pub. L. 100–233, § 802(o)(1), struck out ‘‘, with the approval of Farm Credit Administra- tion,’’ after ‘‘board determines’’. Subsec. (b). Pub. L. 100–233, § 802(o)(2), struck out ‘‘with the approval of the Farm Credit Administration’’ after ‘‘board may determine’’. Subsec. (d). Pub. L. 100–233, § 805(k), substituted ‘‘by’’ for ‘‘by by’’ after ‘‘regulations issued’’. Subsec. (e). Pub. L. 100–233, § 802(o)(3), struck out ‘‘and approved by the Farm Credit Administration’’ after ‘‘Board’’. 1985—Subsec. (d). Pub. L. 99–205, § 205(e)(3), inserted ‘‘under regulations issued by’’ after ‘‘authorized’’. Subsec. (e). Pub. L. 99–205, § 205(e)(4), struck out ‘‘, except for stock held by the Governor,’’ before ‘‘may be exchanged’’. 1980—Subsec. (f). Pub. L. 96–592 added subsec. (f). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2008 AMENDMENT Amendment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, see section 4 of Pub. L. 110–246, set out as an Effective Date note under section 8701 of Title 7, Agriculture. EFFECTIVE DATE OF 1985 AMENDMENT Amendment by Pub. L. 99–205 effective thirty days after Dec. 23, 1985, see section 401 of Pub. L. 99–205, set out as a note under section 2001 of this title. § 2125. Dividends Dividends may be payable only on nonvoting investment stock, if declared by the board of di- rectors of the bank, subject to the general direc- tion of the Farm Credit Administration. (Pub. L. 92–181, title III, § 3.4, Dec. 10, 1971, 85 Stat. 604; Pub. L. 99–205, title II, § 205(e)(5), title VI, § 606, Dec. 23, 1985, 99 Stat. 1705, 1711; Pub. L. 100–233, title VIII, § 805(l), Jan. 6, 1988, 101 Stat. 1715.) Editorial Notes AMENDMENTS 1988—Pub. L. 100–233 struck out ‘‘other than stock held by the Farm Credit Administration,’’ after ‘‘in- vestment stock,’’. 1985—Pub. L. 99–205 struck out ‘‘the Governor of’’ be- fore ‘‘the Farm Credit Administration’’ and inserted ‘‘, subject to the general direction of the Farm Credit Administration’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1985 AMENDMENT Amendment by Pub. L. 99–205 effective thirty days after Dec. 23, 1985, see section 401 of Pub. L. 99–205, set out as a note under section 2001 of this title. § 2126. Retirement of stock Nonvoting investment stock and participation certificates may be called for retirement at par. With the approval of the issuing bank, the hold- er may elect not to have the called stock or par- ticipation certificates retired in response to a call, reserving the right to have such stock or participation certificates included in the next call for retirement. Voting stock may also be re- tired at par, on call or on such revolving basis as the board may determine with due regard for its total capital needs: Provided, however, That all equities in the banks issued or allocated with re- spect to 1971 and prior years shall be retired on a revolving basis according to the year of issue with the oldest outstanding equities being first retired. Equities issued for subsequent years shall not be called or retired until equities de- scribed in the preceding sentence of this proviso have been retired. (Pub. L. 92–181, title III, § 3.5, Dec. 10, 1971, 85 Stat. 604; Pub. L. 96–592, title III, § 303, Dec. 24, 1980, 94 Stat. 3444; Pub. L. 99–205, title II, § 205(e)(6), Dec. 23, 1985, 99 Stat. 1705; Pub. L. 100–233, title VIII, § 802(p), Jan. 6, 1988, 101 Stat. 1712; Pub. L. 115–334, title V, § 5411(6), Dec. 20, 2018, 132 Stat. 4679.) Editorial Notes AMENDMENTS 2018—Pub. L. 115–334 struck out ‘‘district’’ before ‘‘banks issued or allocated’’. 1988—Pub. L. 100–233 struck out ‘‘with approval of the Farm Credit Administration’’ after ‘‘board may deter- mine’’. 1985—Pub. L. 99–205 substituted ‘‘Nonvoting invest- ment stock’’ for ‘‘Any nonvoting stock held by the Governor of the Farm Credit Administration shall be retired to the extent required by section 2151(b) of this title before any other outstanding voting or nonvoting stock or participation certificates shall be retired ex- cept as may be otherwise authorized by the Farm Cred- it Administration. When those requirements have been satisfied, nonvoting investment stock’’, and sub- stituted ‘‘Voting’’ for ‘‘When the requirements of sec- tion 2151(b) of this title have been met, voting’’. Page 1315 TITLE 12—BANKS AND BANKING § 2128 1980—Pub. L. 96–592 inserted provisions respecting ap- plicability to participation certificates and struck out provisions relating to maximum amount of fair book value at retirement. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1985 AMENDMENT Amendment by Pub. L. 99–205 effective thirty days after Dec. 23, 1985, see section 401 of Pub. L. 99–205, set out as a note under section 2001 of this title. § 2127. Guaranty fund subscriptions in lieu of stock If any cooperative association is not author- ized under the laws of the State in which it is organized to take and hold stock in a bank for cooperatives, the bank shall, in lieu of any re- quirement for stock purchase, require the asso- ciation to pay into or have on deposit in a guar- anty fund, or the bank may retain out of the amount of the loan and credit to the guaranty fund account of the borrower, a sum equal to the amount of stock which the association would otherwise be required to own. Each reference to stock of the banks for cooperatives in this chap- ter shall include such guaranty fund equiva- lents. The holder of the guaranty fund equiva- lent and the bank shall each be entitled to the same rights and obligations with respect thereto as the rights and obligations associated with the class or classes of stock involved. (Pub. L. 92–181, title III, § 3.6, Dec. 10, 1971, 85 Stat. 604.) § 2128. Loans, commitments, and technical and fi- nancial assistance (a) Authorities The banks for cooperatives are authorized to make loans and commitments to eligible cooper- ative associations and to extend to them other technical and financial assistance at any time (whether or not they have a loan from the bank outstanding), including but not limited to dis- counting notes and other obligations, guaran- tees, currency exchange necessary to service in- dividual transactions that may be financed under subsection (b) of this section, collateral custody, or participation with other banks for cooperatives and commercial banks or other fi- nancial institutions in loans to eligible coopera- tives, under such terms and conditions as may be determined to be feasible by the board of di- rectors of each bank for cooperatives under reg- ulations of the Farm Credit Administration. Each bank may own and lease, or lease with op- tion to purchase, to stockholders eligible to bor- row from the bank equipment needed in the op- erations of the stockholder and may make or participate in loans or commitments and extend other technical and financial assistance to other domestic parties for the acquisition of equip- ment and facilities to be leased to such stock- holders for use in their operations in the United States. (b) Additional authorities (1) A bank for cooperatives is authorized to make or participate in loans and commitments to, and to extend other technical and financial assistance to a domestic or foreign party with respect to its transactions with an association that is a voting stockholder of the bank for the import of agricultural commodities or products thereof, agricultural supplies, or aquatic prod- ucts through purchases, sales or exchanges, if the bank for cooperatives determines, under reg- ulations of the Farm Credit Administration, that the voting stockholder will benefit substan- tially as a result of such loan, commitment, or assistance. (2)(A) A bank for cooperatives may make or participate in loans and commitments to, and extend other technical and financial assistance to— (i) any domestic or foreign party for the ex- port, including (where applicable) the cost of freight, of agricultural commodities or prod- ucts thereof, agricultural supplies, or aquatic products from the United States under policies and procedures established by the bank to en- sure that the commodities, products, or sup- plies are originally sourced, where reasonably available, from one or more eligible coopera- tive associations described in section 2129(a) of this title on a priority basis, except that if the total amount of the balances outstanding on loans made by a bank under this clause that— (I) are made to finance the export of com- modities, products, or supplies that are not originally sourced from a cooperative, and (II) are not guaranteed or insured, in an amount equal to at least 95 percent of the amount loaned, by a department, agency, bureau, board, commission, or establishment of the United States or a corporation whol- ly-owned directly or indirectly by the United States, exceeds an amount that is equal to 50 percent of the bank’s capital, then a sufficient interest in the loans shall be sold by the bank for co- operatives to commercial banks and other non-System lenders to reduce the total amount of such outstanding balances to an amount not greater than an amount equal to 50 percent of the bank’s capital; and (ii) except as provided in subparagraph (B), any domestic or foreign party in which an eli- gible cooperative association described in sec- tion 2129(a) of this title (including, for the pur- pose of facilitating its domestic business oper- ations only, a cooperative or other entity de- scribed in section 2129(b)(1)(A) of this title) has an ownership interest, for the purpose of fa- cilitating the domestic or foreign business op- erations of the association, except that if the ownership interest by an eligible cooperative association, or associations, is less than 50 percent, the financing shall be limited to the percentage held in the party by the associa- tion or associations. (B) A bank for cooperatives shall not use the authority provided in subparagraph (A)(ii) to provide financial assistance to a party for the purpose of financing the relocation of a plant or facility from the United States to another coun- try. (3) A bank for cooperatives is authorized to provide such services as may be customary and normal in maintaining relationships with do- mestic or foreign entities to facilitate the ac-