12 U.S.C. § 3015 — Eligibility of cooperatives

Page 1484 TITLE 12—BANKS AND BANKING § 3015 Editorial Notes AMENDMENTS 1989—Subsec. (c). Pub. L. 101–206 substituted ‘‘The holder of class A notes shall be entitled to interest at a rate or rates determined by the Secretary of the Treasury, taking into consideration the current aver- age yield on outstanding marketable obligations of the United States of comparable terms and conditions as of the last day of the month preceding each issuance of such class A notes to the Secretary of the Treasury, ex- cept that, until October 1, 1990, interest payments shall not exceed 25 percent of gross revenues for the year, less necessary operating expenses including a reserve for possible losses. From time to time, the Bank may, with the approval of the Secretary of the Treasury and consistent with the terms of this chapter, issue replace- ment class A notes upon terms and conditions to be agreed upon by the Bank and the Secretary, bearing in- terest as provided in this subsection, in substitution for those class A notes previously issued.’’ for ‘‘The holder of class A notes shall be entitled to interest payments at a rate determined by the Secretary of the Treasury taking into consideration the average market yield, during the month preceding the close of each fiscal year, on outstanding marketable obligations of the United States of comparable maturity, except that until October 1, 1990, such interest payments shall not exceed 25 per centum of gross revenues for the year less necessary operating expenses, including a reserve for possible losses. Such interest payments shall be pay- able annually into miscellaneous receipts of the Treas- ury and shall be cumulative.’’ and inserted at end ‘‘All class A notes shall be redeemed by the Bank no later than October 31, 2020.’’ 1981—Subsec. (a). Pub. L. 97–35, §§ 394(c)(1), 395(b)(2), inserted ‘‘by other public or private investors,’’ after ‘‘public bodies,’’ and substituted provisions authorizing appropriations for fiscal year 1982, for provisions au- thorizing appropriations beginning with the fiscal year ending Sept. 30, 1979, and authorizing use of amounts authorized but not appropriated. Subsec. (b). Pub. L. 97–35, § 396(c)(1), substituted ‘‘class B’’ for ‘‘class A, class B,’’, and substituted provi- sions relating to class A notes, for provisions relating to class A preferred stock. Subsec. (c). Pub. L. 97–35, § 396(c)(2), substituted provi- sions relating to interest payments, redemption, etc., of class A notes, for provisions relating to issuance, dividends, etc., of class A stock. Subsec. (e). Pub. L. 97–35, § 396(c)(3), substituted provi- sions relating to class A notes, for provisions relating to class A stock. Subsec. (f). Pub. L. 97–35, § 396(c)(4), substituted provi- sions relating to class A notes, for provisions relating to class A stock. Subsec. (g)(2)(B). Pub. L. 97–35, § 396(c)(5), substituted ‘‘3013(d)(2)(A)’’ for ‘‘3013(c)’’. Subsec. (h). Pub. L. 97–35, § 396(c)(6), struck out provi- sion respecting treatment of the Bank as a govern- mental unit within section 170(b)(1)(A)(v) of title 26. Subsec. (i). Pub. L. 97–35, § 396(c)(7), substituted provi- sions relating to class A notes, for provisions relating to class A stock. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1981 AMENDMENT Pub. L. 97–35, title III, § 394(c)(2), Aug. 13, 1981, 95 Stat. 436, provided that: ‘‘The amendment made by para- graph (1) [amending this section] shall take effect on the day after the Final Government Equity Redemp- tion Date [Dec. 31, 1981].’’ For definition of ‘‘Final Gov- ernment Equity Redemption Date’’, see section 396(a) of Pub. L. 97–35, set out as a note under section 3012 of this title. Pub. L. 97–35, title III, § 395(b)(3), Aug. 13, 1981, 95 Stat. 439, provided that: ‘‘The amendments made by paragraphs (1) [amending section 3042 of this title] and (2) [amending this section] shall take effect on October 1, 1981.’’ Amendment by section 396(c) of Pub. L. 97–35 effective on the day after the Final Government Equity Redemp- tion Date (Dec. 31, 1981), see section 396(i) of Pub. L. 97–35, set out as an Effective Date of 1981 Amendment note under section 3011 of this title. § 3015. Eligibility of cooperatives (a) General requirements For the purpose of all subchapters of this chapter, subject to the limitations of subsection (d) of this section, an eligible cooperative is an organization chartered or operated on a coopera- tive, not-for-profit basis for producing or fur- nishing goods, services or facilities, primarily for the benefit of its members or voting stock- holders who are ultimate consumers of such goods, services, or facilities, or a legally char- tered entity primarily owned and controlled by any such organization or organizations, if it— (1) makes such goods, services or facilities directly or indirectly available to its members or voting stockholders on a not-for-profit basis; (2) does not pay dividends on voting stock or membership capital in excess of such percent- age per annum as may be approved under the bylaws of the Bank; (3) provides that its net savings shall be allo- cated or distributed to all members or pa- trons, in proportion to their patronage, or shall be retained for the actual or potential expansion of its services or the reduction of its charges to the patrons, or for such other pur- poses as may be authorized by its membership not inconsistent with its purposes; (4) makes membership available on a vol- untary basis, without any social, political, ra- cial, or religious discrimination and without any discrimination on the basis of age, sex, or marital status, to all persons who can make use of its services and are willing to accept the responsibilities of membership, subject only to limitations under applicable Federal or State laws or regulations; (5) in the case of primary cooperative orga- nizations restricts its voting control to mem- bers or voting stockholders on a one vote per person basis (except that this requirement shall not apply to any housing cooperative in existence on March 21, 1980, which did not meet such requirement on such date) and takes positive steps to insure economic de- mocracy and maximum participation by mem- bers of the cooperative including the holding of annual meetings and, in the case of organi- zations owned by groups of cooperatives, pro- vides positive protections to insure economic democracy; and (6) is not a credit union, mutual savings bank, or mutual savings and loan association. (b) Primary producers No organization shall be ineligible because it produces, markets, or furnishes goods, services, or facilities on behalf of its members as primary producers, unless the dollar volume of loans made by the Bank to such organizations exceeds 10 per centum of the gross assets of the Bank. (c) ‘‘Net savings’’ defined As used in this section, the term ‘‘net savings’’ means, for any period, the borrower’s gross re- Page 1485 TITLE 12—BANKS AND BANKING § 3017 ceipts, less the operating and other expenses de- ductible therefrom in accordance with generally accepted accounting principles, including, with- out limitation, contributions to allowable re- serves, and after deducting the amounts of any dividends on its capital stock or other member- ship capital payable during, or within forty-five days after, the close of such period. (d) Cooperatives eligible for other Federal credit assistance An eligible cooperative which also has been determined to be eligible for credit assistance from the Rural Electrification Administration, the National Rural Utilities Cooperative Fi- nance Corporation, the Banks for Cooperatives or other institutions of the Farm Credit System, or the Farmers Home Administration may re- ceive the assistance authorized by this chapter only (1) if the Bank determines that a request for assistance from any such source or sources has been rejected or denied solely because of the unavailability of funds from such source or sources, or (2) by agreement between the Bank and the agency or agencies involved. (e) Credit unions eligible for technical assistance from Office of Self-Help Development and Technical Assistance Notwithstanding any other provision of this section, a credit union serving predominantly low-income members (as defined by the Admin- istrator of the National Credit Union Adminis- tration) may receive technical assistance under subchapter II. (Pub. L. 95–351, title I, § 105, Aug. 20, 1978, 92 Stat. 506; Pub. L. 97–35, title III, § 394(e)(1), (f), Aug. 13, 1981, 95 Stat. 436, 437; Pub. L. 115–334, title VI, § 6602(b)(18), Dec. 20, 2018, 132 Stat. 4777.) Editorial Notes REFERENCES IN TEXT All subchapters of this chapter, referred to in subsec. (a), was in the original ‘‘all titles of this Act’’, meaning titles I to III of Pub. L. 95–351. Titles I and II constitute this chapter and title III amended section 5315 of Title 5, Government Organization and Employees, and sec- tions 856, 867, and 868 of former Title 31, Money and Fi- nance. AMENDMENTS 2018—Subsec. (d). Pub. L. 115–334 struck out ‘‘the Rural Telephone Bank,’’ after ‘‘the National Rural Utilities Cooperative Finance Corporation,’’. 1981—Subsec. (a). Pub. L. 97–35, § 394(e)(1), substituted ‘‘primarily owned’’ for ‘‘entirely owned’’. Subsec. (a)(5). Pub. L. 97–35, § 394(f), inserted provi- sions relating to exception for housing cooperatives in existence on Mar. 21, 1980. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1981 AMENDMENT Pub. L. 97–35, title III, § 394(e)(2), Aug. 13, 1981, 95 Stat. 437, provided that: ‘‘The amendment made by para- graph (1) [amending this section] shall take effect on the day after the Final Government Equity Redemp- tion Date [Dec. 31, 1981].’’ For definition of ‘‘Final Gov- ernment Equity Redemption Date’’, see section 396(a) of Pub. L. 97–35, set out as a note under section 3012 of this title. TRANSFER OF FUNCTIONS Functions vested in Administrator of National Credit Union Administration transferred and vested in Na- tional Credit Union Administration Board pursuant to section 1752a of this title. § 3016. Annual meetings; notice, agenda, etc. The Bank shall hold an annual meeting of its stockholders which shall be open to the public. At least 30 days’ advance notice of the time and place of the annual meeting shall be given to all stockholders. Borrowers from the Bank shall also give notice of the meeting to their mem- bers, who shall be entitled to attend. At such meeting the Bank shall give a full report of its activities during the year and its financial con- dition and may present proposals for future ac- tion and other matters of general concern to borrowers and organizations eligible to borrow from the Bank. Members and representatives of borrowers may present motions or resolutions relating to matters within the scope of this chapter and may participate in the discussion thereof and other matters on the agenda. (Pub. L. 95–351, title I, § 106, Aug. 20, 1978, 92 Stat. 507.) § 3017. Bonds, debentures, notes and other evi- dences of indebtedness (a) Authorization for public or private sale; time of issuance, interest rates, and terms and conditions; outstanding amount The Bank is authorized to obtain funds through the public or private sale of its bonds, debentures, notes, and other evidences of indebt- edness. Such obligations shall be issued at such times, bear interest at such rates, and contain such terms and conditions as the Board shall de- termine: Provided, however, That the amount of such obligations which may be outstanding at any one time pursuant to this section shall not exceed ten times the paid-in capital and surplus of the Bank. (b) Purchase and sale by Bank; methods of sale and delivery The Bank may purchase its own obligations, and may provide for the sale of any such obliga- tions through a fiscal agent or agents, by nego- tiation, offer, bid, syndicate sale, or otherwise, and may deliver such obligations by book entry, wire transfer, or such other means as may be ap- propriate. (c) Obligations as not guaranteed by United States and not to constitute a debt or obliga- tion of United States Obligations issued under this section shall not be guaranteed by the United States and shall not constitute a debt or obligation of the United States or any agency or instrumentality thereof other than the Bank. (Pub. L. 95–351, title I, § 107, Aug. 20, 1978, 92 Stat. 507; Pub. L. 97–35, title III, §§ 394(g)(1), 396(d), Aug. 13, 1981, 95 Stat. 437, 440.) Editorial Notes AMENDMENTS 1981—Subsec. (a). Pub. L. 97–35, § 394(g)(1), struck out requirement respecting consultation with the Sec- retary of the Treasury. Subsecs. (b) to (d). Pub. L. 97–35, § 396(d), redesignated subsecs. (c) and (d) as (b) and (c), respectively, and