12 U.S.C. § 3013 — Board of Directors

Page 1480 TITLE 12—BANKS AND BANKING § 3013 the civil rights of the inhabitants of such property under Federal, State, or local laws; (8) obtain insurance against loss in connec- tion with property and other assets; (9) modify or consent to the modification with respect to the rate of interest, time of payment of any installment of principal or in- terest, security, or any other term of any con- tract or agreement to which it is a party or has an interest pursuant to this chapter; (10) utilize and act through any Federal, State, or local public agency or instrumen- tality, or private agency or organization, with the consent of the agency or organization con- cerned, and contract with such agency, instru- mentality, or organization for furnishing or receiving technical services and benefits of re- search, services, funds or facilities; and make advance, progress, or other payments with re- spect to such contracts without regard to sec- tion 3324(a) and (b) of title 31; (11) within the limitations of section 3017 of this title, borrow money and issue notes, bonds and debentures or other obligations in- dividually or in concert with other financial institutions, agencies or instrumentalities, of such character and such terms and conditions and at rates of interest as may be determined; (12) issue certificates of indebtedness to its stockholders or members and pay interest on funds left with the Bank, and accept grants or interest free temporary use of funds made available to it; (13) participate with one or more other fi- nancial institutions, agencies, instrumental- ities, or foundations in loans or guarantees under this chapter on terms as may be agreed upon; (14) accept guarantees from other agencies for which loans made by the Bank may be eli- gible; (15) establish one or more branch offices and one or more advisory councils in connection with any such branch offices, as may from time to time be authorized by the Board of Di- rectors; (16) buy and sell obligations of, or insured by, the United States or any agency or instru- mentalities thereof, or securities backed by the full faith and credit of any such agency or instrumentality and, after the final Govern- ment Equity Redemption Date, make such other investments as may be authorized by the Board of Directors; (17) approve the salary scale of officers and employees of the Bank, in accordance with regulations and standards adopted by the Board of Directors, without regard to the pro- visions of chapter 51 and subchapter III of chapter 53 of title 5 relating to classification and General Schedule pay rates, but, except as otherwise provided in this chapter, the Gen- eral Schedule pay rates shall be applicable until all class A stock held by the Secretary of the Treasury has been retired; and (18) have such other incidental powers as may be necessary or expedient to carry out its duties under this chapter. In determining whether a public offering is tak- ing place for the purpose of the Securities Act of 1933 [15 U.S.C. 77a et seq.], there shall be ex- cluded from consideration all class B and class C stock purchases which took place prior to Au- gust 13, 1981. (Pub. L. 95–351, title I, § 102, Aug. 20, 1978, 92 Stat. 500; Pub. L. 97–35, title III, § 394(d)(1), Aug. 13, 1981, 95 Stat. 436.) Editorial Notes REFERENCES IN TEXT The Securities Act of 1933, referred to in text, is act May 27, 1933, ch. 38, title I, 48 Stat. 74, which is classi- fied generally to subchapter I (§ 77a et seq.) of chapter 2A of Title 15, Commerce and Trade. For complete clas- sification of this Act to the Code, see section 77a of Title 15 and Tables. CODIFICATION In pars. (5) and (10), ‘‘section 3324(a) and (b) of title 31’’ substituted for ‘‘section 3648 of the Revised Stat- utes [31 U.S.C. 529]’’ on authority of Pub. L. 97–258, § 4(b), Sept. 13, 1982, 96 Stat. 1067, the first section of which enacted Title 31, Money and Finance. AMENDMENTS 1981—Pub. L. 97–35 substituted provisions relating to a public offering for purposes of the Securities Act of 1933, for provisions setting forth criteria for the term ‘‘exempt securities’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1981 AMENDMENT Pub. L. 97–35, title III, § 394(d)(2), Aug. 13, 1981, 95 Stat. 436, 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].’’ See section 396(a) of Pub. L. 97–35 set out below. ‘‘FINAL GOVERNMENT EQUITY REDEMPTION DATE’’ DEFINED Pub. L. 97–35, title III, § 396(a), Aug. 13, 1981, 95 Stat. 439, provided that: ‘‘For purposes of this subtitle [see Short Title of 1981 Amendment note set out under sec- tion 3001 of this title], the term ‘Final Government Eq- uity Redemption Date’ shall have the same meaning given such term in section 101(5) of the National Con- sumer Cooperative Bank Act (12 U.S.C. 3011(5)).’’ § 3013. Board of Directors (a) Composition; term of office; removal by Presi- dent The Bank shall be governed by a Board of Di- rectors (hereinafter in this chapter referred to as the ‘‘Board’’) which shall consist of 15 mem- bers. All members shall serve for a term of 3 years. After the expiration of the term of any member, such member may continue to serve until his successor has been elected or has been appointed and qualified. Any member appointed by the President may be removed for cause by the President. (b) Appointment by President; election by stock- holders (1) The President shall appoint, by and with the advice and consent of the Senate— (A) one member who shall be selected from among proprietors of small business concerns, as defined under section 632 of title 15, which are manufacturers or retailers; (B) one member who shall be selected from among the officers of the agencies and depart- ments of the United States; and Page 1481 TITLE 12—BANKS AND BANKING § 3013 1 See References in Text note below. (C) one member who shall be selected from among persons having extensive experience in the cooperative field representing low-income cooperatives eligible to borrow from the Bank. (2) Twelve members of the Board shall be elected by the holders of class B stock and class C stock in accordance with the provisions of subsection (d) and the bylaws of the Bank. (c) Resignations; continuances; completion of term; committee representation (1) On the day after the Final Government Eq- uity Redemption Date, all members of the Board of Directors of the Bank who were appointed by the President shall resign, except that— (A) the member who shall have been ap- pointed by the President from among propri- etors of small business concerns, and (B) one member who shall be designated by the President and who shall have been ap- pointed by the President from among the offi- cers and employees of the agencies and depart- ments of the United States Government, may continue to serve until their successors have been appointed and qualified. (2) Any member of the Board of Directors of the Bank who was elected by the holders of class B or class C stock before the Final Government Equity Redemption Date shall serve the remain- der of the term for which such member was elected. (3) Any member appointed pursuant to sub- section (b)(1) shall be entitled to sit on any com- mittee of the Board, but not more than one member so appointed may sit on any one com- mittee. (d) Elections; nominations by cooperative class- es; vacancies filled; representation require- ments (1) All elections of members of the Board by the holders of class B stock and class C stock shall be conducted in accordance with the by- laws of the Bank. Such bylaws shall conform to the requirements of this section. Nominations for such elections shall be made by the following classes of cooperatives: (A) housing, (B) con- sumer goods, (C) low-income cooperatives, (D) consumer services, and (E) all other eligible co- operatives. (2)(A) Vacant shareholder directorships shall be filled so that at any time when there are three or more shareholder directors on the Board, there shall be at least one director rep- resenting each of the following classes of co- operatives: (i) housing cooperatives, (ii) low-in- come cooperatives, and (iii) consumer goods and services cooperatives. (B) Each nominee for a shareholder director- ship of a particular class shall have at least three years experience as a director or senior of- ficer in the class of cooperatives to be rep- resented. (C) No one class of cooperatives specified in paragraph (1) shall be represented on the Board by more than three directors. (e) Terms; officer of Bank not to serve as direc- tor; notice requirements of Bank and voting shareholders No director shall be eligible to be elected for more than two consecutive full three-year terms. No officer of the Bank shall be eligible to serve simultaneously as a director on the Board of the Bank. The Bank shall give adequate ad- vance notice to all voting stockholders of nomi- nees and of the procedures for nominating other candidates. Each voting stockholder shall make the information required in this paragraph available to its members. (f) Annual election of chairman and vice chair- man and selection of secretary; eligibility; es- tablishment of Bank policies and direction of management The Board shall annually elect from among its members a chairman and vice chairman and se- lect a secretary who need not be a member. The Board shall establish the policies of the Bank governing its funding, lending, and other finan- cial and technical assistance, and shall direct the management of the Bank. (g) Conduct of meetings; rules governing The Board shall meet at least quarterly. Its meeting shall be open to members or representa- tives of all eligible cooperatives and other eligi- ble organizations, as observers only, and to per- sons or representatives of groups who identify their interest in the Bank and who are invited to attend a meeting, subject to such rules as the Board may establish for the conduct of such meetings. Those rules shall include the manner of giving notice of meetings, the procedure for the conduct of meetings, the manner of submit- ting topics for the agenda, the allocation of time of presentations, and debate. The chairman, when sustained by the majority of the Board present, may adjourn the open meeting into an executive session on motion of the chairman, any Board member, or at the request of any ap- plicant, borrower, officer, or employee when the matter under discussion involves an application, a loan, a personnel action, or other matter which might tend to impinge on the right of pri- vacy of any person. (h) Compensation and expenses Members of the Board appointed by the Presi- dent from among the officers of the agencies and departments of the United States Government shall not receive any additional compensation by virtue of their service on the Board. The member of the Board appointed from among pro- prietors of small business and the member of the Board appointed pursuant to subsection (b)(1)(C) shall (1) receive compensation at a rate equal to the daily equivalent of the rate prescribed for grade GS–18 under section 5332 of title 5 for each day that they are engaged in the performance of their duties on the Board, and (2) be allowed travel expenses, including per diem in lieu of subsistence, in the same manner as persons em- ployed intermittently in the Government serv- ice are allowed expenses under section 5703(b) 1 of title 5 for each day that they are away from their homes or regular places of business in the performance of their duties on the Board. The members of the Board who are elected by the holders of class B stock and class C stock shall be compensated in accordance with the bylaws of the Bank. All compensation and expenses paid Page 1482 TITLE 12—BANKS AND BANKING § 3014 to the members of the Board of Directors shall be paid by the Bank. (Pub. L. 95–351, title I, § 103, Aug. 20, 1978, 92 Stat. 502; Pub. L. 96–149, Dec. 16, 1979, 93 Stat. 1089; Pub. L. 97–35, title III, § 393(a), (b), Aug. 13, 1981, 95 Stat. 435, 436.) Editorial Notes REFERENCES IN TEXT Section 5703 of title 5, referred to in subsec. (h), was amended generally by Pub. L. 94–22, § 4, May 19, 1975, 89 Stat. 85, and, as so amended, does not contain a subsec. (b). AMENDMENTS 1981—Subsec. (a). Pub. L. 97–35, § 393(a), substituted provisions relating to composition, term of office, and removal by the President, for provisions relating to composition, appointment, eligibility, removal, and va- cancies. Subsec. (b). Pub. L. 97–35, § 393(a), substituted provi- sions relating to appointment by the President, and election by the stockholders, for provisions relating to resignation and termination of terms of Presidential appointees, shareholder directorships, resignation of remaining Presidential appointees on Final Govern- ment Equity Redemption Date, and continuation of Presidential appointment power. Subsec. (c). Pub. L. 97–35, § 393(a), substituted provi- sions relating to resignations, continuances, comple- tion of term, and committee representation, for provi- sions relating to nominating criteria for appointment or election, and representational limitations. Subsec. (d). Pub. L. 97–35, § 393(a), substituted provi- sions relating to nominations by cooperative classes, vacancies, and representational requirements for elec- tions, for provisions relating to rules governing elec- tion of successors to resigned Presidential appointees and successors to shareholder directors. Subsec. (h). Pub. L. 97–35, § 393(b), inserted provisions relating to compensation of members elected by hold- ers of class B and C stock, and provisions relating to payment of compensation and expenses by the Bank, and substituted provisions relating to members ap- pointed under subsec. (b)(1)(C) of this section, for provi- sions relating to Final Government Equity Redemption Date, and members elected by holders of class B and C stock. 1979—Subsec. (a). Pub. L. 96–149, § 1(a), inserted provi- sions respecting appointment of a member from among proprietors of small business concerns, and substituted ‘‘fifteen’’ for ‘‘thirteen’’, ‘‘eight’’ for ‘‘seven’’, and ‘‘this section’’ for ‘‘this section 104’’, which for purposes of codification had been editorially translated as ‘‘section 3014 of this title’’. Subsec. (b). Pub. L. 96–149, § 1(b), substituted provi- sions respecting criteria for resignations of initial two additional Board members and the additional Board member, for provisions respecting criteria for resigna- tion of an additional Board member, and substituted ‘‘Five of the’’ for ‘‘Five’’. Subsec. (d). Pub. L. 96–149, § 1(c), substituted ‘‘five of the’’ for ‘‘all five’’. Subsec. (h). Pub. L. 96–149, § 1(d), inserted provisions relating to Board member appointed from among pro- prietors of small businesses. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1981 AMENDMENT Pub. L. 97–35, title III, § 393(c), Aug. 13, 1981, 95 Stat. 436, provided that: ‘‘The amendments made by sub- sections (a) and (b) [amending this section] shall take effect on the day after the Final Government Equity Redemption Date [Dec. 31, 1981].’’ For definition of ‘‘Final Government Equity Redemption Date’’, see sec- tion 396(a) of Pub. L. 97–35, set out as a note under sec- tion 3012 of this title. REFERENCES IN OTHER LAWS TO GS–16, 17, OR 18 PAY RATES References in laws to the rates of pay for GS–16, 17, or 18, or to maximum rates of pay under the General Schedule, to be considered references to rates payable under specified sections of Title 5, Government Organi- zation and Employees, see section 529 [title I, § 101(c)(1)] of Pub. L. 101–509, set out in a note under section 5376 of Title 5. § 3014. Capitalization (a) Subscriptions for capital; authorization of ap- propriations The capital of the Bank shall consist of cap- ital subscribed by borrowers from the Bank, by cooperatives eligible to become borrowers, by organizations owned and controlled by such bor- rowers, by foundations, trust or charitable funds, by public bodies, by other public or pri- vate investors, and by the United States. There are authorized to be appropriated not to exceed $47,000,000 for fiscal year 1982 for purposes of pur- chasing class A stock. (b) Classes of stock; general requirements re- specting rights, powers, privileges, and pref- erences The capital stock of the Bank shall include class B and class C stock and such other classes with such rights, powers, privileges, and pref- erences of the separate classes as may be speci- fied, not inconsistent with law, in the bylaws of the Bank. Class A notes which are held by the United States shall have first preference with respect to assets and interest payments over all classes of stock issued by the Bank. So long as any class A notes are outstanding, the Bank shall not pay any dividend on any class of stock at a rate greater than the statutory interest rate payable on class A notes. Class B and class C stock shall be common stock with voting rights as provided for herein and shall be issued only to eligible borrowers and organizations controlled by such borrowers or organizations eligible to borrow, and shall be transferable only on the books of the Bank and then only to an- other eligible borrower. No holder of voting stock of the Bank shall be entitled to more than one vote regardless of the number of shares of stock of other classes held, except as provided in subsection (g) of this section. (c) Class A notes; interest payments; redemption, etc. The holder of class A notes shall be entitled to interest at a rate or rates determined by the Secretary of the Treasury, taking into consider- ation the current average yield on outstanding marketable obligations of the United States of comparable terms and conditions as of the last day of the month preceding each issuance of such class A notes to the Secretary of the Treas- ury, except that, until October 1, 1990, interest payments shall not exceed 25 percent of gross revenues for the year, less necessary operating expenses including a reserve for possible losses. From time to time, the Bank may, with the ap- proval of the Secretary of the Treasury and con- sistent with the terms of this chapter, issue re-