12 U.S.C. § 2124 — Stock of banks for cooperatives

Page 1313 TITLE 12—BANKS AND BANKING § 2124 1 So in original. There probably should be a semicolon after ‘‘banks’’. such manner, and with such qualifications as may be required in its bylaws, except that at least one member shall be elected by the other directors, which member shall not be a director, officer, employee, or stockholder of a System in- stitution. (b) Nomination and election (1) In general If approved by the stockholders through a bylaw amendment, the nomination and elec- tion of one member from a bank for coopera- tives shall be carried out with each voting stockholder of a bank for cooperatives having one vote, plus a number of votes (or fractional part thereof) equal to— (A) the number of stockholders eligible to vote; multiplied by (B) the percentage (or fractional part thereof) of the total equity interest (includ- ing allocated, but not unallocated, surplus and reserves) in the bank of all stockholders held by the individual voting stockholder at the close of the immediately preceding fiscal year of the bank. (2) Number of votes The total number of votes under this sub- section shall be the number of voting stock- holders of a bank for cooperatives multiplied by two. (Pub. L. 92–181, title III, § 3.2, Dec. 10, 1971, 85 Stat. 603; Pub. L. 99–205, title II, § 205(e)(2), Dec. 23, 1985, 99 Stat. 1705; Pub. L. 100–399, title IX, § 901(d), Aug. 17, 1988, 102 Stat. 1007; Pub. L. 102–552, title V, § 503, Oct. 28, 1992, 106 Stat. 4130; Pub. L. 115–334, title V, § 5411(5), Dec. 20, 2018, 132 Stat. 4679.) Editorial Notes AMENDMENTS 2018—Pub. L. 115–334, § 5411(5)(B), (C), redesignated subsec. (a)(1) as (a) and subsec. (a)(2) as (b), inserted headings, and struck out former subsec. (b) which read as follows: ‘‘The board of directors of the Central Bank for Cooperatives shall consist of one member elected by the board of each bank for cooperatives, including the United Bank for Cooperatives if the Central Bank for Cooperatives is not merged into such bank, and one member appointed by the Farm Credit Administra- tion.’’ Subsec. (a)(1). Pub. L. 115–334, § 5411(5)(A)(i), struck out ‘‘not merged into the United Bank for Cooperatives or the National Bank for Cooperatives’’ after ‘‘Each bank for cooperatives’’. Subsec. (a)(2)(A). Pub. L. 115–334, § 5411(5)(A)(ii), struck out ‘‘(other than the National Bank for Coopera- tives)’’ after ‘‘a bank for cooperatives’’ in introductory provisions. Subsec. (b)(1). Pub. L. 115–334, § 5411(5)(C)(ii), (D)(ii), redesignated subsec. (a)(2)(A) and cls. (i) and (ii) thereof as subsec. (b)(1) and subpars. (A) and (B) thereof, re- spectively, inserted par. heading, and realigned mar- gins. Subsec. (b)(2). Pub. L. 115–334, § 5411(5)(D)(i), (E), re- designated subsec. (a)(2)(B) as subsec. (b)(2), inserted heading, and substituted ‘‘this subsection’’ for ‘‘this paragraph’’. 1992—Subsec. (a). Pub. L. 102–552 designated existing provisions as par. (1) and added par. (2). 1988—Subsec. (a). Pub. L. 100–399 amended subsec. (a) generally. Prior to amendment, subsec. (a) read as fol- lows: ‘‘In the case of a district bank for cooperatives, the board of directors shall be the farm credit district board and in the case of the Central Bank for Coopera- tives shall be a separate board of not more than thir- teen members, one from each farm credit district and one at large. One district director of the Central Bank Board shall be elected by each district farm credit board and the member at large shall be appointed by the Farm Credit Administration.’’ Subsec. (b). Pub. L. 100–399 amended subsec. (b) gen- erally. Prior to amendment, subsec. (b) read as follows: ‘‘For the purposes of this section the provisions of sec- tions 2222(b) and (c), 2225, 2226, and 2227 of this title shall apply to and shall be the authority of the Central Bank for Cooperatives the same as though it were a dis- trict bank.’’ 1985—Subsec. (a). Pub. L. 99–205 substituted ‘‘Farm Credit Administration’’ for ‘‘Governor with the advice and consent of the Federal Farm Credit Board’’. 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. 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. § 2124. Stock of banks for cooperatives (a) Amount The Capital stock of each bank for coopera- tives shall be in such amount as its board deter- mines is required for the purpose of providing adequate capital to permit the bank to meet the credit needs of borrowers from the bank and such amounts may be increased or decreased from time to time in accordance with such needs. (b) Value The capital stock of each bank shall be divided into shares of par value of $100 each and may be of such classes as the board may determine. Such stock may be issued in fractional shares. (c) Eligible holders of voting stock Voting stock may be issued or transferred to and held only by (i) cooperative associations eli- gible to borrow from the banks 1 (ii) other cat- egories of persons and entities described in sec- tions 2128 and 2129 of this title eligible to borrow from the bank, as determined by the bank’s board of directors; and (iii) other banks for co- operatives, and shall not be otherwise trans- ferred, pledged, or hypothecated except as con- sented to by the issuing bank under regulations of the Farm Credit Administration. (d) Entitlement to vote Each holder of one or more shares of voting stock which is eligible to borrow from a bank for cooperatives shall be entitled only to one vote and only in the affairs of the bank in the district in which its principal office is located unless otherwise authorized under regulations issued by the Farm Credit Administration, ex- Page 1314 TITLE 12—BANKS AND BANKING § 2125 cept that if such holder has not been a borrower from the bank in which it holds such stock with- in a period of two years next preceding the date fixed by the Farm Credit Administration prior to the commencement of voting, it shall not be entitled to vote. (e) Nonvoting investment stock Nonvoting investment stock may be issued in such series and in such amounts as may be de- termined by the board and may be exchanged for voting stock or sold or transferred to any person subject to the approval of the issuing bank. (f) Participation certificates Participation certificates may be issued to parties to whom voting stock may not be issued. (Pub. L. 92–181, title III, § 3.3, Dec. 10, 1971, 85 Stat. 603; Pub. L. 96–592, title III, § 302, Dec. 24, 1980, 94 Stat. 3443; Pub. L. 99–205, title II, § 205(e)(3), (4), Dec. 23, 1985, 99 Stat. 1705; Pub. L. 100–233, title VIII, §§ 802(o), 805(k), Jan. 6, 1988, 101 Stat. 1712, 1715; Pub. L. 110–234, title V, §§ 5402, 5403(a), May 22, 2008, 122 Stat. 1154; Pub. L. 110–246, § 4(a), title V, §§ 5402, 5403(a), June 18, 2008, 122 Stat. 1664, 1915.) Editorial Notes CODIFICATION Pub. L. 110–234 and Pub. L. 110–246 made identical amendments to this section. The amendments by Pub. L. 110–234 were repealed by section 4(a) of Pub. L. 110–246. AMENDMENTS 2008—Subsec. (b). Pub. L. 110–246, § 5402, which di- rected substitution of ‘‘par’’ for ‘‘per’’, could not be ex- ecuted because ‘‘per’’ did not appear. Subsec. (c)(ii), (iii). Pub. L. 110–246, § 5403(a), added cl. (ii) and redesignated former cl. (ii) as (iii). 1988—Subsec. (a). Pub. L. 100–233, § 802(o)(1), struck out ‘‘, with the approval of Farm Credit Administra- tion,’’ after ‘‘board determines’’. Subsec. (b). Pub. L. 100–233, § 802(o)(2), struck out ‘‘with the approval of the Farm Credit Administration’’ after ‘‘board may determine’’. Subsec. (d). Pub. L. 100–233, § 805(k), substituted ‘‘by’’ for ‘‘by by’’ after ‘‘regulations issued’’. Subsec. (e). Pub. L. 100–233, § 802(o)(3), struck out ‘‘and approved by the Farm Credit Administration’’ after ‘‘Board’’. 1985—Subsec. (d). Pub. L. 99–205, § 205(e)(3), inserted ‘‘under regulations issued by’’ after ‘‘authorized’’. Subsec. (e). Pub. L. 99–205, § 205(e)(4), struck out ‘‘, except for stock held by the Governor,’’ before ‘‘may be exchanged’’. 1980—Subsec. (f). Pub. L. 96–592 added subsec. (f). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2008 AMENDMENT Amendment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, see section 4 of Pub. L. 110–246, set out as an Effective Date note under section 8701 of Title 7, Agriculture. 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. § 2125. Dividends Dividends may be payable only on nonvoting investment stock, if declared by the board of di- rectors of the bank, subject to the general direc- tion of the Farm Credit Administration. (Pub. L. 92–181, title III, § 3.4, Dec. 10, 1971, 85 Stat. 604; Pub. L. 99–205, title II, § 205(e)(5), title VI, § 606, Dec. 23, 1985, 99 Stat. 1705, 1711; Pub. L. 100–233, title VIII, § 805(l), Jan. 6, 1988, 101 Stat. 1715.) Editorial Notes AMENDMENTS 1988—Pub. L. 100–233 struck out ‘‘other than stock held by the Farm Credit Administration,’’ after ‘‘in- vestment stock,’’. 1985—Pub. L. 99–205 struck out ‘‘the Governor of’’ be- fore ‘‘the Farm Credit Administration’’ and inserted ‘‘, subject to the general direction of the Farm Credit Administration’’. Statutory Notes and Related Subsidiaries 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. § 2126. Retirement of stock Nonvoting investment stock and participation certificates may be called for retirement at par. With the approval of the issuing bank, the hold- er may elect not to have the called stock or par- ticipation certificates retired in response to a call, reserving the right to have such stock or participation certificates included in the next call for retirement. Voting stock may also be re- tired at par, on call or on such revolving basis as the board may determine with due regard for its total capital needs: Provided, however, That all equities in the banks issued or allocated with re- spect to 1971 and prior years shall be retired on a revolving basis according to the year of issue with the oldest outstanding equities being first retired. Equities issued for subsequent years shall not be called or retired until equities de- scribed in the preceding sentence of this proviso have been retired. (Pub. L. 92–181, title III, § 3.5, Dec. 10, 1971, 85 Stat. 604; Pub. L. 96–592, title III, § 303, Dec. 24, 1980, 94 Stat. 3444; Pub. L. 99–205, title II, § 205(e)(6), Dec. 23, 1985, 99 Stat. 1705; Pub. L. 100–233, title VIII, § 802(p), Jan. 6, 1988, 101 Stat. 1712; Pub. L. 115–334, title V, § 5411(6), Dec. 20, 2018, 132 Stat. 4679.) Editorial Notes AMENDMENTS 2018—Pub. L. 115–334 struck out ‘‘district’’ before ‘‘banks issued or allocated’’. 1988—Pub. L. 100–233 struck out ‘‘with approval of the Farm Credit Administration’’ after ‘‘board may deter- mine’’. 1985—Pub. L. 99–205 substituted ‘‘Nonvoting invest- ment stock’’ for ‘‘Any nonvoting stock held by the Governor of the Farm Credit Administration shall be retired to the extent required by section 2151(b) of this title before any other outstanding voting or nonvoting stock or participation certificates shall be retired ex- cept as may be otherwise authorized by the Farm Cred- it Administration. When those requirements have been satisfied, nonvoting investment stock’’, and sub- stituted ‘‘Voting’’ for ‘‘When the requirements of sec- tion 2151(b) of this title have been met, voting’’.