12 U.S.C. § 2202b — Effect of restructuring on borrower

Page 1338 TITLE 12—BANKS AND BANKING § 2202b credit’’ after ‘‘request of any’’. Former subsec. (k) re- designated (j). 1996—Subsec. (a)(5). Pub. L. 104–105 designated exist- ing provisions as subpar. (A), inserted subpar. heading, substituted ‘‘Subject to subparagraph (B), the term’’ for ‘‘The term’’, and added subpar. (B). 1988—Subsec. (a). Pub. L. 100–399, § 102(a), struck out ‘‘(other than in sections 2205 and 2206 of this title)’’ after ‘‘in this part’’. Subsec. (a)(6)(B). Pub. L. 100–399, § 102(b), substituted ‘‘section 2015(b)(1)(B) of this title’’ for ‘‘section 2074(a)(2) of this title’’ and ‘‘section 2015(b)(1) of this title’’ for ‘‘section 2074(a) of this title’’. Subsec. (e)(1). Pub. L. 100–399, § 102(c), substituted ‘‘cost to such qualified’’ for ‘‘cost to a qualified’’. Subsec. (g)(1). Pub. L. 100–399, § 102(d), substituted ‘‘bank’’ for ‘‘farm credit district’’. Subsec. (g)(3). Pub. L. 100–399, § 102(e), substituted ‘‘bank board’’ for ‘‘district board’’. Subsec. (l). Pub. L. 100–399, § 102(f), substituted ‘‘Farm Credit Bank’’ for ‘‘Federal intermediate credit bank’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1988 AMENDMENT Amendment by section 102(b), (f) of Pub. L. 100–399 ef- fective immediately after amendment made by section 401 of Pub. L. 100–233, which was effective 6 months after Jan. 6, 1988, and amendment by section 102(a), (c)–(e) of Pub. L. 100–399 effective as if enacted imme- diately after enactment of Pub. L. 100–233, which was approved Jan. 6, 1988, see section 1001 of Pub. L. 100–399, set out as a note under section 2002 of this title. SENSE OF CONGRESS Pub. L. 100–233, title I, § 102(b), Jan. 6, 1988, 101 Stat. 1579, provided that: ‘‘It is the sense of Congress that the banks and associations (except banks for cooperatives) operating under the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.) should administer distressed loans to farm- ers with the objective of using the loan guarantee pro- grams of the Farmers Home Administration and other loan restructuring measures, including participation in interest rate buy-down programs that are Federally or State funded, and other Federal and State sponsored fi- nancial assistance programs that offer relief to finan- cially distressed farmers, as alternatives to foreclosure, considering the availability and appropriateness of such programs on a case-by-case basis.’’ § 2202b. Effect of restructuring on borrower stock (a) Farm Credit Bank If a Farm Credit Bank forgives and writes off, under section 2202a of this title, any of the prin- cipal outstanding on a loan made to any bor- rower, the Federal land bank association of which the borrower is a member and stockholder shall cancel the same dollar amount of borrower stock held by the borrower in respect of the loan, up to the total amount of such stock, and, to the extent provided for in the bylaws of the bank relating to its capitalization, the bank shall retire an equal amount of stock owned by the Federal land bank association. (b) Production credit association If a production credit association forgives and writes off, under section 2202a of this title, any of the principal outstanding on a loan made to any borrower, the association shall cancel the same dollar amount of borrower stock held by the borrower in respect of the loan, up to the total amount of such stock. (c) Retention of stock Notwithstanding subsections (a) and (b), the borrower shall be entitled to retain at least one share of stock to maintain the borrower’s mem- bership and voting interest in the association. (Pub. L. 92–181, title IV, § 4.14B, as added Pub. L. 100–233, title I, § 102(a), Jan. 6, 1988, 101 Stat. 1577; amended Pub. L. 100–399, title I, § 102(g), Aug. 17, 1988, 102 Stat. 990.) Editorial Notes AMENDMENTS 1988—Subsec. (a). Pub. L. 100–399 substituted in sub- sec. heading ‘‘Farm Credit Bank’’ for ‘‘Federal land bank’’ and in text ‘‘a Farm Credit Bank’’ for ‘‘a Federal land bank’’ and ‘‘, to the extent provided for in the by- laws of the bank relating to capitalization, the bank shall’’ for ‘‘the Federal land bank shall’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1988 AMENDMENT Amendment by Pub. L. 100–399 effective immediately after amendment made by section 401 of Pub. L. 100–233, which was effective 6 months after Jan. 6, 1988, see sec- tion 1001(b) of Pub. L. 100–399, set out as a note under section 2002 of this title. § 2202c. Repealed. Pub. L. 115–334, title V, § 5411(23), Dec. 20, 2018, 132 Stat. 4682 Section, Pub. L. 92–181, title IV, § 4.14C, as added Pub. L. 100–233, title I, § 102(a), Jan. 6, 1988, 101 Stat. 1578; amended Pub. L. 100–399, title I, § 102(h), Aug. 17, 1988, 102 Stat. 990, related to review of restructuring denials and establishment of a National Special Asset Council. § 2202d. Protection of borrowers who meet all loan obligations (a) Foreclosure prohibited A qualified lender may not foreclose on any loan because of the failure of the borrower thereof to post additional collateral, if the bor- rower has made all accrued payments of prin- cipal, interest, and penalties with respect to the loan. (b) Prohibition against required principal reduc- tion A qualified lender may not require any bor- rower to reduce the outstanding principal bal- ance of any loan made to the borrower by any amount that exceeds the regularly scheduled principal installment payment (when due and payable), unless— (1) the borrower sells or otherwise disposes of part or all of the collateral; or (2) the parties agree otherwise in a written agreement entered into by the parties. (c) Nonenforcement After a borrower has made all accrued pay- ments of principal, interest, and penalties with respect to a loan made by a qualified lender, the lender shall not enforce acceleration of the bor- rower’s repayment schedule due to the borrower having not timely made one or more principal or interest payments. (d) Placing loans in nonaccrual status (1) Notification If a qualified lender places any loan in non- accrual status, the lender shall document such change of status and promptly notify the bor- rower thereof in writing of such action and the reasons therefor.