12 U.S.C. § 3017a — Class A notes as paid-in capital of the

Page 1486 TITLE 12—BANKS AND BANKING § 3017a struck out former subsec. (b) relating to discretionary authority for issuance to and purchase by Secretary of Treasury. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1981 AMENDMENT Pub. L. 97–35, title III, § 394(g)(2), Aug. 13, 1981, 95 Stat. 437, provided that: ‘‘The amendment made by paragraph (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. Amendment by section 396(d) of Pub. L. 97–35 effec- tive on the day after the Final Government Equity Re- demption Date (Dec. 31, 1981), see section 396(i) of Pub. L. 97–35, set out as a note under section 3011 of this title. § 3017a. Class A notes as paid-in capital of the Bank Only for purposes of section 3017(a) of this title, class A notes shall be deemed to be paid- in capital of the Bank. (Pub. L. 97–35, title III, § 391(b)(1), Aug. 13, 1981, 95 Stat. 434.) Editorial Notes CODIFICATION Section was enacted as part of the National Con- sumer Cooperative Bank Act Amendments of 1981 and also as part of the Omnibus Budget Reconciliation Act of 1981, and not as part of the National Consumer Coop- erative Bank Act which comprises this chapter. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Pub. L. 97–35, title III, § 391(b)(2), Aug. 13, 1981, 95 Stat. 434, provided that: ‘‘This subsection [enacting this section] shall take effect on the day after the Final Government Equity Redemption Date [Dec. 31, 1981].’’ For definition of ‘‘Final Government Equity Redemp- tion Date’’, see section 396(a) of Pub. L. 97–35, set out as a note under section 3012 of this title. § 3018. Loans (a) General requirements for loans and commit- ments for loans; limitations; allocation of as- sistance for low-income persons; criteria and factors for making loans, etc.; publication The Bank may make loans and commitments for loans under this subsection to any organiza- tion determined by the Bank to be eligible under the provisions of section 3015 of this title, and may purchase or discount obligations of mem- bers of such organizations if the Bank, to the ex- clusion of all other persons, entities, agencies, or jurisdictions, also determines that the appli- cant has or will have a sound organizational and financial structure, income in excess of its oper- ating costs and assets in excess of its obliga- tions, and a reasonable expectation of a con- tinuing demand for its production, goods, com- modities, or services, or the use of its facilities, so that the loan will be fully repayable in ac- cordance with its terms and conditions. Com- mencing on October 1, 1985, the Bank shall not make any loan to a cooperative for the purpose of financing the construction, ownership, acqui- sition, or improvement of any structure used primarily for residential purposes if, after giving effect to such loan, the aggregate amount of all loans outstanding for such purpose would exceed 30 per centum of the gross assets of the Bank. The Board of Directors shall use its best efforts to insure that at the end of each fiscal year of the Bank at least 35 per centum of its out- standing loans are to— (1) cooperatives at least a majority of the members of which are low-income persons, and (2) other cooperatives, if the proceeds of such loans are directly applied to finance a fa- cility, activity, or service that the Board finds will be used predominantly by low-income per- sons. The Board shall adopt and publish in the Fed- eral Register rules defining the term ‘‘low-in- come persons’’ for purposes of this subsection. The criteria to be applied and the factors to be considered by the Bank in making loans, loan commitments, purchases, discounts, and guaran- tees shall include an assessment of the impact of the loan on existing small businesses in the eli- gible organizations’ business territory. The cri- teria and factors shall be stated in rules of the Bank which shall be published and made avail- able to applicants and, upon request, to any other person or organization. (b) Repayment requirements; criteria for terms, rates, and charges; advancement of loan pro- ceeds Loans under this section shall be repayable in not more than forty years and, except for loans with final due date not longer than five years from the date of the loan, shall be amortized as to principal and interest. In setting the terms, rates, and charges, it shall be the objective of the Bank to provide the type of credit needed by eligible borrowers, at the lowest reasonable cost on a sound business basis, taking into account the cost of money to the Bank, necessary re- serve and expenses of the Bank, and the tech- nical and other assistance attributable to loans under this section made available by the Bank. The loan terms may provide for interest rates to vary from time to time during the repayment period of the loan in accordance with the rates being charged by the Bank for new loans at such times. The proceeds of a loan under this sub- section may be advanced by the borrower to its members or stockholders under circumstances described in the bylaws or rules of the Bank. (c) Guarantees by Bank; requirements; charges Subject to section 3012(13) of this title, the Bank may guarantee all or any part of the prin- cipal and interest of any loan made by any State or federally chartered lending institution to any borrower if such loan is to an organization that would be an eligible borrower from the Bank for a direct loan and is on terms and conditions (in- cluding the rate of interest) which would be per- missible terms and conditions for such a direct loan. The Bank may impose a charge for any such guarantee. No loan may be guaranteed by the Bank if the income therefrom to the lender is excluded from such lender’s gross income for purposes of chapter 1 of title 26.