12 U.S.C. § 2255 — Conditions of other banks and lending in-

Page 1361 TITLE 12—BANKS AND BANKING § 2255 out ‘‘, except with respect to any actions taken by any banks of the System under section 2159(b) of this title,’’ after ‘‘accounting principles’’ and ‘‘Notwithstanding the provisions of the preceding sentence and any other provision of this chapter, for the period July 1, 1986, through December 31, 1988, the institutions of the Farm Credit System may, on the prior approval of the Farm Credit Administration and subject to such conditions as it may establish, capitalize annually their provision for losses that is in excess of one-half of 1 percent of loans outstanding and amortize such capitalized amounts over a period not to exceed 20 years.’’ after ‘‘may require.’’, and struck out pars. (2) and (3) which read as follows: ‘‘(2) In accordance with the regulations of the Farm Credit Administration, for the period ending December 31, 1992, System institutions are authorized to use the authorities contained in the third sentence of para- graph (1) except as otherwise provided in section 2278a–6 of this title. ‘‘(3) Any preferred stock issued under section 2278b–7 of this title shall be subordinated to, and impaired be- fore, other stock or equities of the institution.’’ Subsec. (e). Pub. L. 115–334, § 5404, added subsec. (e). 1996—Subsec. (a). Pub. L. 104–105 substituted ‘‘during each 18-month period’’ for ‘‘each year’’ in first sen- tence. 1992—Subsec. (a). Pub. L. 102–552, § 512, substituted ‘‘may include, if appropriate’’ for ‘‘shall include’’ in third sentence. Subsec. (d). Pub. L. 102–552, § 513(b), added subsec. (d). 1990—Subsec. (a). Pub. L. 101–624 inserted after third sentence ‘‘Examination of banks shall include an anal- ysis of the compensation paid to the chief executive of- ficer and the salary scales of the employees of the bank.’’ 1988—Subsec. (a). Pub. L. 100–399, § 416(c), substituted ‘‘at least once every three years’’ for ‘‘at least once every 5 years’’. Pub. L. 100–233, § 432(b), substituted ‘‘Except for Fed- eral land bank associations, each’’ for ‘‘Each’’, sub- stituted ‘‘the Board’’ for ‘‘the Chairman of the Board’’ in two places, and inserted after first sentence ‘‘Each Federal land bank association shall be examined by Farm Credit Administration examiners at such times as the Farm Credit Administration Board may deter- mine, except that each such association shall be exam- ined at least once every 5 years.’’ Subsec. (b). Pub. L. 100–233, § 205(b), designated exist- ing provisions as par. (1) and added pars. (2) and (3). Subsec. (b)(2). Pub. L. 100–399, § 204, substituted ‘‘the third sentence of paragraph (1)’’ for ‘‘this section’’. 1986—Subsec. (b). Pub. L. 99–509 substituted second and third sentences for former second sentence which read as follows: ‘‘Each such report shall contain finan- cial statements prepared in accordance with generally accepted accounting principles and contain such addi- tional information as the Farm Credit Administration by regulation may require.’’ 1985—Pub. L. 99–205 in amending section generally, revised and restated existing provisions in subsec. (a) and added subsecs. (b) and (c). Prior to amendment, sec- tion read as follows: ‘‘Except as provided herein, each institution of the System, and each of their agents, at such times as the Governor of the Farm Credit Admin- istration may determine, shall be examined and au- dited by farm credit examiners under the direction of an independent chief Farm Credit Administration ex- aminer, but each bank and each production credit asso- ciation shall be examined and audited not less fre- quently than once each year. Such examinations shall include objective appraisals of the effectiveness of man- agement and application of policies in carrying out the provisions of this chapter and in servicing all eligible borrowers. If the Governor determines it to be nec- essary or appropriate, the required examinations and audits may be made by independent certified public ac- countants, certified by a regulatory authority of a State, and in accordance with generally accepted audit- ing standards. Upon request of the Governor or any bank of the System, farm credit examiners shall also make examinations and written reports of the condi- tion of any organization, other than national banks, to which, or with which, any institution of the System contemplates making a loan or discounting paper of such organization. For the purposes of this chapter, ex- aminers of the Farm Credit Administration shall be subject to the same requirements, responsibilities, and penalties as are applicable to examiners under the Na- tional Bank Act [12 U.S.C. 21 et seq.], the Federal Re- serve Act [12 U.S.C. 221 et seq.], the Federal Deposit In- surance Act [12 U.S.C. 1811 et seq.], and other provisions of law and shall have the same powers and privileges as are vested in such examiners by law.’’ 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. 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. RESTRAINT BY FEDERAL BANK REGULATORY AGENCIES IN OVERSEEING AGRICULTURAL BORROWERS Pub. L. 99–198, title XIII, § 1326, Dec. 23, 1985, 99 Stat. 1540, provided that: ‘‘(a) Congress finds and declares that— ‘‘(1) high production costs and low commodity prices have combined to reduce farm income to the lowest levels since the depths of the Depression in the 1930’s, to subject many agricultural producers, through no fault of their own, to severe economic hardship, and in many cases temporarily but seri- ously to impair producers’ ability to meet loan repay- ment schedules in a timely fashion; and ‘‘(2) a policy of adverse classification of agricul- tural loans by bank examiners under these cir- cumstances will trigger a wave of foreclosures and similar actions on the part of banks, thereby depress- ing land values and prices for agricultural facilities and equipment and having a devastating effect on farmers and the banking industry, and upon rural areas of the United States in general. ‘‘(b) It is therefore the sense of Congress that the Federal bank regulatory agencies should ensure, in their examination procedures, that examiners exercise caution and restraint and give due consideration not only to the current cash flow of agricultural borrowers under financial stress, but to factors such as their loan collateral and ultimate ability to repay as well, for so long as the adverse economic effects of the cost-price squeeze of recent years continue to impair the ability of these borrowers to meet scheduled repayments on their loans.’’ § 2255. Conditions of other banks and lending in- stitutions The Comptroller of the Currency is authorized and directed, upon request of the Farm Credit Administration to furnish for confidential use of an institution of the System such reports, records, and other information as he may have available relating to the financial condition of national banks through, for, or with which such institution of the System has made or con- templates making discounts or loans and to make such further examination, as may be agreed, of organizations through, for, or with which such institution of the Farm Credit Sys- tem has made or contemplates making dis- counts or loans. Page 1362 TITLE 12—BANKS AND BANKING § 2256 (Pub. L. 92–181, title V, § 5.20, formerly § 5.21, Dec. 10, 1971, 85 Stat. 623; renumbered § 5.20, Pub. L. 99–205, title II, § 203(b), Dec. 23, 1985, 99 Stat. 1694.) Editorial Notes PRIOR PROVISIONS A prior section 5.20 of Pub. L. 92–181 was renumbered section 5.19 and is classified to section 2254 of this title. § 2256. Consent to the availability of reports and to examinations Any organization other than State banks, trust companies, and savings associations shall, as a condition precedent to securing discount privileges with a bank of the Farm Credit Sys- tem, file with such bank its written consent to examination by farm credit examiners as may be directed by the Farm Credit Administration; and State banks, trust companies, and savings associations may be required in like manner to file a written consent that reports of their ex- amination by constituted State authorities may be furnished by such authorities upon the re- quest of the Farm Credit Administration. (Pub. L. 92–181, title V, § 5.21, formerly § 5.22, Dec. 10, 1971, 85 Stat. 623; renumbered § 5.21, Pub. L. 99–205, title II, § 203(b), Dec. 23, 1985, 99 Stat. 1694.) Editorial Notes PRIOR PROVISIONS A prior section 5.21 of Pub. L. 92–181 was renumbered section 5.20 and is classified to section 2255 of this title. § 2257. Reports on conditions of institutions re- ceiving loans or deposits The executive departments, boards, commis- sions, and independent establishments of the Government of the United States, the Federal Deposit Insurance Corporation, the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Re- serve banks are severally authorized under such conditions as they may prescribe, upon request of the Farm Credit Administration, to make available to it or to any institution of the Sys- tem in confidence all reports, records, or other information relating to the condition of any or- ganization to which such institution of the Sys- tem has made or contemplates making loan or for which it has or contemplates discounting paper, or which it is using or contemplates using as a custodian of securities or other credit in- struments, or a depository. The Federal Reserve banks in their capacity as depositories, agents, and custodians for bonds, debentures, and other obligations issued by the banks of the System or book entries thereof are also authorized and di- rected, upon request of the Farm Credit Admin- istration, to make available for audit by farm credit examiners all appropriate books, ac- counts, financial records, files, and other papers. (Pub. L. 92–181, title V, § 5.22, formerly § 5.23, Dec. 10, 1971, 85 Stat. 624; renumbered § 5.22, Pub. L. 99–205, title II, § 203(b), Dec. 23, 1985, 99 Stat. 1694.) Editorial Notes PRIOR PROVISIONS A prior section 5.22 of Pub. L. 92–181 was renumbered section 5.21 and is classified to section 2256 of this title. § 2257a. Uniform financial reporting instructions (a) In general Each System institution shall comply with uniform financial reporting instructions re- quired by the Farm Credit Administration, to standardize and facilitate the reporting of Sys- tem data. (b) Computerized system If the financial reports are maintained by a computer system, each System institution may develop an internal computer system or it may contract out to a vendor under open competitive bidding any or all aspects of the computerized system. (c) Submission of proposal Within 6 months of January 6, 1988, each Sys- tem institution shall submit to the Farm Credit Administration a report on the plan of that in- stitution to bring the operations of the institu- tion into compliance with the uniform financial reporting instructions required by the Farm Credit Administration. (Pub. L. 92–181, title V, § 5.22A, as added Pub. L. 100–233, title IV, § 429, Jan. 6, 1988, 101 Stat. 1658.) § 2258. Jurisdiction Each institution of the System shall for the purposes of jurisdiction be deemed to be a cit- izen of the State, commonwealth, or District of Columbia in which its principal office is located. (Pub. L. 92–181, title V, § 5.23, formerly § 5.24, Dec. 10, 1971, 85 Stat. 624; Pub. L. 94–184, § 1(b), Dec. 31, 1975, 89 Stat. 1060; renumbered § 5.23, Pub. L. 99–205, title II, § 203(b), Dec. 23, 1985, 99 Stat. 1694.) Editorial Notes PRIOR PROVISIONS A prior section 5.23 of Pub. L. 92–181 was renumbered section 5.22 and is classified to section 2257 of this title. AMENDMENTS 1975—Pub. L. 94–184 struck out provisions prohibiting district court jurisdiction on the basis of incorporation under this Act or prior Federal law, and prohibiting ju- risdiction except in cases by or against the United States or one of its officers, or against a person over whom State courts have no jurisdiction and except in cases by or against a receiver or conservator appointed under this chapter. § 2259. State legislation Whenever it is determined by the Farm Credit Administration, or by judicial decision, that a State law is applicable to the obligations and se- curities authorized to be held by the institu- tions of the System under this chapter, which law would provide insufficient protection or in- adequate safeguards against loss in the event of default, the Farm Credit Administration may declare such obligations or securities to be ineli- gible as collateral for the issuance of new notes,