12 U.S.C. § 2202d — Protection of borrowers who meet all

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. Page 1339 TITLE 12—BANKS AND BANKING § 2205 (2) Review of denial If the borrower was not delinquent in any principal or interest payment under the loan at the time of such action and the borrower’s request to have the loan placed back into ac- crual status is denied, the borrower may ob- tain a review of such denial before the appro- priate credit review committee under section 2202 of this title. (3) Application This subsection shall only apply if a loan being placed in nonaccrual status results in an adverse action being taken against the bor- rower. (Pub. L. 92–181, title IV, § 4.14D, as added Pub. L. 100–233, title I, § 107, Jan. 6, 1988, 101 Stat. 1581.) § 2202e. Waiver of mediation rights by borrowers No System institution may make a loan se- cured by a mortgage or lien on agricultural property to a borrower on the condition that the borrower waive any right under the mediation program of any State. (Pub. L. 92–181, title IV, § 4.14E, as added Pub. L. 100–233, title V, § 511, Jan. 6, 1988, 101 Stat. 1664; amended Pub. L. 103–354, title II, § 282(f)(2), Oct. 13, 1994, 108 Stat. 3235.) Editorial Notes AMENDMENTS 1994—Pub. L. 103–354 struck out ‘‘agricultural loan’’ before ‘‘mediation program’’. PART D—ACTIVITIES OF INSTITUTIONS OF THE SYSTEM Editorial Notes CODIFICATION Pub. L. 100–233, title VIII, § 805(t)(1), Jan. 6, 1988, 101 Stat. 1716, added part D heading. § 2203. Nomination of association directors; rep- resentative selection of nominees Each production credit association and each Federal land bank association shall elect a nominating committee by vote of the stock- holders at the annual meeting to serve for the following year. Each nominating committee shall review lists of farmers from the associa- tion territory, determine their willingness to serve, and submit for election a slate of eligible candidates which shall include at least two nominees for each elective office to be filled. In doing so, the committee shall endeavor to as- sure representation to all sections of the asso- ciation territory and as nearly as possible to all types of agriculture practiced within the area. Employees of the association shall not be eligi- ble to be nominated, elected, or serve as a mem- ber of the board. Nominations shall also be ac- cepted from the floor. Members of the board are not eligible to serve on the nominating com- mittee. Regulations of the Farm Credit Admin- istration governing the election of bank direc- tors shall similarly assure a choice of two nomi- nees for each elective office to be filled and that the bank board represent as nearly as possible all types of agriculture in the district. (Pub. L. 92–181, title IV, § 4.15, Dec. 10, 1971, 85 Stat. 613; Pub. L. 100–399, title IX, § 901(g), Aug. 17, 1988, 102 Stat. 1007.) Editorial Notes AMENDMENTS 1988—Pub. L. 100–399 substituted ‘‘bank directors’’ for ‘‘district directors’’ and ‘‘bank board’’ for ‘‘district board’’. 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. § 2204. Repealed. Pub. L. 102–552, title V, § 508, Oct. 28, 1992, 106 Stat. 4132 Section, Pub. L. 92–181, title IV, § 4.16, Dec. 10, 1971, 85 Stat. 613, prohibited tax-exempt guarantees. § 2205. Interest rates Interest rates on loans from institutions of the Farm Credit System shall not be subject to any interest rate limitation imposed by any State constitution or statute or other laws. Such limi- tation is preempted for purposes of this chapter. Interest rates on loans made by agricultural credit corporations organized in conjunction with cooperative associations for the purpose of financing the ordinary crop operations of the members of such associations or other producers and eligible to discount with the Farm Credit Banks shall be exempt from any interest rate limitation imposed by any State constitution or statute or other laws which are hereby pre- empted for purposes of this chapter. (Pub. L. 92–181, title IV, § 4.17, as added Pub. L. 96–592, title IV, § 403, Dec. 24, 1980, 94 Stat. 3446; amended Pub. L. 99–205, title II, § 205(f)(6), Dec. 23, 1985, 99 Stat. 1706; Pub. L. 99–509, title I, § 1035, Oct. 21, 1986, 100 Stat. 1878; Pub. L. 100–399, title IX, § 901(h), Aug. 17, 1988, 102 Stat. 1007; Pub. L. 115–334, title V, § 5411(24), Dec. 20, 2018, 132 Stat. 4682.) Editorial Notes AMENDMENTS 2018—Pub. L. 115–334 struck out ‘‘Federal inter- mediate credit banks and’’ before ‘‘Farm Credit Banks’’. 1988—Pub. L. 100–399 substituted ‘‘and Farm Credit Banks’’ for ‘‘pursuant to section 2074 of this title’’. 1986—Pub. L. 99–509 substituted first two sentences for former first sentence which read as follows: ‘‘Inter- est rates on loans from institutions of the Farm Credit System shall be determined with the approval of, as provided in section 2252(a)(5) of this title, the Farm Credit Administration as provided in this chapter, not- withstanding any interest rate limitation imposed by any State constitution or statute or other laws which are hereby preempted for purposes of this chapter.’’ 1985—Pub. L. 99–205 inserted ‘‘, as provided in section 2252(a)(5) of this title,’’ after ‘‘with the approval of’’ in first sentence. 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,