12 U.S.C. § 2279bb — Definitions

Page 1428 TITLE 12—BANKS AND BANKING § 2279bb by following any procedure for removal for causes in effect at the time of such removal. (4) No attachment or execution shall be issued against the Corporation or any of the property of the Corporation before final judg- ment in any Federal, State, or other court. (Pub. L. 92–181, title VIII, § 8.14, as added Pub. L. 100–233, title VII, § 702, Jan. 6, 1988, 101 Stat. 1705.) PART B—REGULATION OF FINANCIAL SAFETY AND SOUNDNESS OF FEDERAL AGRICULTURAL MORTGAGE CORPORATION § 2279bb. Definitions For purposes of this part: (1) Compensation The term ‘‘compensation’’ means any pay- ment of money or the provision of any other thing of current or potential value in connec- tion with employment. (2) Core capital The term ‘‘core capital’’ means, with respect to the Corporation, the sum of the following (as determined in accordance with generally accepted accounting principles): (A) The par value of outstanding common stock. (B) The par value of outstanding preferred stock. (C) Paid-in capital. (D) Retained earnings. (3) Director The term ‘‘Director’’ means the Director of the Office of Secondary Market Oversight of the Farm Credit Administration, selected under section 2279aa–11(a)(3) of this title. (4) Office The term ‘‘Office’’ means the Office of Sec- ondary Market Oversight of the Farm Credit Administration, established in section 2279aa–11(a) of this title. (5) Regulatory capital The term ‘‘regulatory capital’’ means, with respect to the Corporation, the core capital of the Corporation plus an allowance for losses and guarantee claims, as determined in ac- cordance with generally accepted accounting principles. (6) State The term ‘‘State’’ means the States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Common- wealth of the Northern Mariana Islands, Guam, the Virgin Islands, American Samoa, the Trust Territory of the Pacific Islands, and any other territory or possession of the United States. (Pub. L. 92–181, title VIII, § 8.31, as added Pub. L. 102–237, title V, § 503(b)(2), Dec. 13, 1991, 105 Stat. 1871.) Executive Documents TERMINATION OF TRUST TERRITORY OF THE PACIFIC ISLANDS For termination of Trust Territory of the Pacific Is- lands, see note set out preceding section 1681 of Title 48, Territories and Insular Possessions. § 2279bb–1. Risk-based capital levels (a) Risk-based capital test The Director of the Office of Secondary Mar- ket Oversight shall, by regulation, establish a risk-based capital test under this section for the Corporation. When applied to the Corporation, the risk-based capital test shall determine the amount of regulatory capital for the Corpora- tion that is sufficient for the Corporation to maintain positive capital during a 10-year period in which both of the following circumstances occur: (1) Credit risk (A) In general With respect to securities representing an interest in, or obligations backed by, a pool of qualified loans owned or guaranteed by the Corporation and other obligations of the Corporation, losses on the underlying quali- fied loans occur throughout the United States at a rate of default and severity (based on any measurements of default rea- sonably related to prevailing industry prac- tice in determining capital adequacy) rea- sonably related to the rate and severity that occurred in contiguous areas of the United States containing an aggregate of not less than 5 percent of the total population of the United States that, for a period of not less than 2 years (as established by the Director), experienced the highest rates of default and severity of agricultural mortgage losses, in comparison with such rates of default and severity of agricultural mortgage losses in other such areas for any period of such dura- tion, as determined by the Director. (B) Rural utility loans With respect to securities representing an interest in, or obligation backed by, a pool of qualified loans described in section 2279aa(7)(C) of this title owned or guaranteed by the Corporation, losses occur at a rate of default and severity reasonably related to risks in electric and telephone facility loans (as applicable), as determined by the Direc- tor. (2) Interest rate risk Interest rates on Treasury obligations of varying terms increase or decrease over the first 12 months of such 10-year period by not more than the lesser of (A) 50 percent (with re- spect to the average interest rates on such ob- ligations during the 12-month period preceding the 10-year period), or (B) 600 basis points, and remain at such level for the remainder of the period. This paragraph may not be construed to require the Director to determine interest rate risk under this paragraph based on the in- terest rates for various long-term and short- term obligations all increasing or all decreas- ing concurrently. (b) Considerations (1) Establishment of test In establishing the risk-based capital test under subsection (a)— (A) the Director shall take into account appropriate distinctions based on various