12 U.S.C. § 2279d — Termination of System institution status

Page 1411 TITLE 12—BANKS AND BANKING § 2279d subsection (a), the officer or employee that records such vote shall ensure that all stock- holders of the voting entity receive notice of the final results of the vote. (2) Effective date A voluntary merger, transfer, or termi- nation that is approved by a vote of the stock- holders of two or more banks or associations shall not take effect until the expiration of 30 days after the date on which the stockholders of such banks or associations are notified of the final result of the vote in accordance with paragraph (1). (3) Petition filed If a petition for reconsideration of a merger, transfer, or termination vote, signed by at least 15 percent of the stockholders of one or more of the affected banks or associations, is presented to the Farm Credit Administration within 30 days after the date of the notifica- tion required under paragraph (1)— (A) a voluntary merger, transfer, or termi- nation shall not take effect until the expira- tion of 60 days after the date on which the stockholders were notified of the final result of the vote; and (B) a special meeting of the stockholders of the affected banks or associations shall be held during the period referred to in sub- paragraph (A) to reconsider the vote. (4) Vote on reconsideration If a majority of stockholders of any one of the affected banks or associations voting, in person or by written proxy, at a duly author- ized stockholders’ meeting, vote against the proposed merger, transfer, or termination, such action shall not take place. (5) Failure to file petition If a petition for reconsideration of such vote is either not filed prior to the 60th day after the vote or, if timely filed, is not signed by at least 15 percent of the stockholders, the merg- er, transfer, or termination shall become effec- tive in accordance with the plan of merger, transfer, or termination. (Pub. L. 92–181, title VII, § 7.9, as added Pub. L. 100–233, title IV, § 416, Jan. 6, 1988, 101 Stat. 1648; amended Pub. L. 100–399, title IV, § 408(n), (o), Aug. 17, 1988, 102 Stat. 1002; Pub. L. 115–334, title V, § 5411(40), Dec. 20, 2018, 132 Stat. 4683.) Editorial Notes AMENDMENTS 2018—Subsec. (c). Pub. L. 115–334 struck out subsec. (c) which related to special reconsideration regarding the organization as a separate association by certain associations that had voluntarily merged with one or more associations. 1988—Subsec. (a)(1). Pub. L. 100–399, § 408(n)(1), sub- stituted ‘‘this chapter’’ for ‘‘section 2252(a)(2) of this title’’. Subsec. (a)(4). Pub. L. 100–399, § 408(n)(5), redesignated par. (5) as (4). Pub. L. 100–399, § 408(n)(2), inserted reference to sec- tion 2279f–1 of this title. Subsec. (a)(5). Pub. L. 100–399, § 408(n)(5), redesignated par. (6) as (5). Former par. (5) redesignated (4). Pub. L. 100–399, § 408(n)(3), substituted ‘‘or’’ for ‘‘and’’. Subsec. (a)(6). Pub. L. 100–399, § 408(n)(5), redesignated par. (7) as (6). Former par. (6) redesignated (5). Pub. L. 100–399, § 408(n)(4), substituted ‘‘section 2279f’’ for ‘‘section 2279f–1’’. Subsec. (a)(7). Pub. L. 100–399, § 408(n)(5), redesignated par. (7) as (6). Subsec. (b)(2). Pub. L. 100–399, § 408(o), struck out comma before ‘‘shall not take effect’’ and substituted ‘‘such banks or’’ for ‘‘such’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1988 AMENDMENT Amendment by Pub. L. 100–399 effective as if enacted immediately after enactment of Pub. L. 100–233, which was approved Jan. 6, 1988, see section 1001(a) of Pub. L. 100–399, set out as a note under section 2002 of this title. SUBPART 4—TERMINATION AND DISSOLUTION OF INSTITUTIONS Editorial Notes CODIFICATION Pub. L. 100–399, title IV, § 408(m), Aug. 17, 1988, 102 Stat. 1002, redesignated subpart 3 as 4. § 2279d. Termination of System institution status (a) Conditions A System institution may terminate the sta- tus of the institution as a System institution if— (1) the institution provides written notice to the Farm Credit Administration Board not later than 90 days prior to the proposed termi- nation date; (2) the termination is approved by the Farm Credit Administration Board; (3) the appropriate Federal or State author- ity grants approval to charter the institution as a bank, savings and loan association, or other financial institution; (4) the institution pays to the Farm Credit Insurance Fund the amount by which the total capital of the institution exceeds 6 percent of the assets; (5) the institution pays or makes adequate provision for payment of all outstanding debt obligations of the institution; (6) the termination is approved by a major- ity of the stockholders of the institution vot- ing, in person or by written proxy, at a duly authorized stockholders’ meeting, held prior to giving notice to the Farm Credit Adminis- tration Board; and (7) the institution meets such other condi- tions as the Farm Credit Administration Board by regulation considers appropriate. (b) Effect On termination of its status as a System insti- tution— (1) the Farm Credit Administration Board shall revoke the charter of the institution; and (2) the institution shall no longer be an in- strumentality of the United States under this chapter. (Pub. L. 92–181, title VII, § 7.10, as added Pub. L. 100–233, title IV, § 416, Jan. 6, 1988, 101 Stat. 1650; amended Pub. L. 115–334, title V, § 5411(41), Dec. 20, 2018, 132 Stat. 4683.) Editorial Notes AMENDMENTS 2018—Subsec. (a)(4). Pub. L. 115–334 added par. (4) and struck out former par. (4) which read as follows: ‘‘the Page 1412 TITLE 12—BANKS AND BANKING § 2279e institution pays to the Farm Credit Assistance Fund, as created under section 2278b–5 of this title, if the ter- mination is prior to January 1, 1992, or pays to the Farm Credit Insurance Fund, if the termination is after such date, the amount by which the total capital of the institution exceeds, 6 percent of the assets;’’. PART C—APPROVAL OF DISCLOSURE INFORMA- TION AND ISSUANCE OF CHARTERS BY THE FARM CREDIT ADMINISTRATION BOARD § 2279e. Approval of disclosure information and issuance of charters (a) Disclosure of information (1) Approval of plan With respect to any plan of merger, transfer of lending authority, dissolution, or termi- nation, prior to submission to the voters (vot- ing stockholders and, where required, contrib- utors to guaranty funds) of the institutions in- volved, such plan shall be submitted to the Farm Credit Administration Board, together with all information that is to be distributed to the voters with respect to the contemplated action, including an enumerated statement of the anticipated benefits and potential dis- advantages of such action. (2) Notice of approval On notification that the Farm Credit Ad- ministration Board has approved such plan for submission to the stockholders, or after 60 days of no action on the plan by the Board, the submitting institutions may submit the plan, together with the disclosure information, to the voters for the prescribed vote. (b) Notice of reasons for disapproval If the Farm Credit Administration Board dis- approves the plan for submission to the stock- holders, notification to the submitting institu- tions shall specify the reasons for the deter- mination by the Board. If such plan is deter- mined to be inadequate, it shall not be sub- mitted to the voters for a vote. (c) Federal charter Each plan of merger or transfer of lending au- thority may include a proposed new or revised Federal charter for the merged or transferee en- tity. The Farm Credit Administration Board shall issue such charter on the approval of the plan, as prescribed in this subchapter, unless the Board determines that the charter submitted is not consistent with this chapter. (Pub. L. 92–181, title VII, § 7.11, as added Pub. L. 100–233, title IV, § 416, Jan. 6, 1988, 101 Stat. 1651; amended Pub. L. 100–399, title IV, § 408(p), Aug. 17, 1988, 102 Stat. 1002; Pub. L. 102–237, title V, § 502(n), Dec. 13, 1991, 105 Stat. 1870.) Editorial Notes AMENDMENTS 1991—Subsec. (a)(2). Pub. L. 102–237 substituted ‘‘60 days’’ for ‘‘30 days’’. 1988—Subsec. (a)(1). Pub. L. 100–399 substituted ‘‘transfer of lending authority’’ for ‘‘transfer or assign- ment of lending authority’’ and ‘‘the institutions in- volved’’ for ‘‘such institutions’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1988 AMENDMENT Amendment by Pub. L. 100–399 effective as if enacted immediately after enactment of Pub. L. 100–233, which was approved Jan. 6, 1988, see section 1001(a) of Pub. L. 100–399, set out as a note under section 2002 of this title. PART D—MERGERS OF LIKE ENTITIES § 2279f. Merger of similar banks (a) In general Banks organized or operating under this chap- ter may merge with banks in other districts op- erating under the same subchapter if the plan of merger is approved by— (1) the Farm Credit Administration Board; (2) the respective Boards of Directors of the banks involved; (3) a majority vote of the stockholders of each bank voting, in person or by proxy, at a duly authorized stockholders’ meeting, with each association having a number of votes equal to the number of such association’s vot- ing stockholders; and (4) in the case of a bank for cooperatives, a majority of the total equity interests in such merging bank for cooperatives (including allo- cated, but not unallocated, surplus and re- serves) held by those stockholders or sub- scribers to the guaranty fund of the bank vot- ing. (b) Powers and capitalization Sections 2279a–2 and 2279a–3 of this title shall apply to banks merged under this section. (c) Board of directors (1) In general After a merger under subsection (a), a board of directors shall be created for the resulting bank. (2) Composition The board shall be composed of— (A) two directors elected by each of the bank boards, with at least one such director from each bank being elected by the eligible stockholders of, or subscribers to, the guar- anty fund of the merging banks; and (B) one outside director elected by the di- rectors elected under subparagraph (A). (3) Outside director (A) Qualifications The outside director elected under para- graph (2)(B) shall be experienced in financial services and credit, and within the 2-year pe- riod prior to such election, shall not have been a borrower from, shareholder in, or di- rector, officer, employee, or agent of any in- stitution of the Farm Credit System. (B) Failure to elect If the other members of the board fail to elect an outside director, the Farm Credit Administration Board shall appoint a quali- fied person to serve on the board of directors until such member is so elected. (4) Bylaws Notwithstanding paragraph (2), the bylaws of the merged bank may, with the approval of