12 U.S.C. § 2011 — Establishment, charters, titles, branches

Page 1287 TITLE 12—BANKS AND BANKING § 2011 ‘‘(B) the members of the special committee that represent the districts affected by the terms of the proposal. ‘‘(3) SUBMISSION TO STOCKHOLDERS.—Not later than the end of the 18-month period after the date of en- actment of this Act [Jan. 6, 1988], each Farm Credit Bank involved, in consultation with the special com- mittee, shall submit the proposed merger affecting such bank to the voting stockholders of each such bank. ‘‘(4) STOCKHOLDER VOTE.—Each association shall be entitled to cast a number of votes equal to the num- ber of voting stockholders of such association.’’ [For termination, effective May 15, 2000, of reporting provisions in section 412(a)(3) of Pub. L. 100–233, set out above, see section 3003 of Pub. L. 104–66, as amended, set out as a note under section 1113 of Title 31, Money and Finance, and page 166 of House Document No. 103–7.] APPLICABILITY OF LAWS ENACTED AFTER JANUARY 1, 1960 Pub. L. 86–168, title II, § 203(b), Aug. 18, 1959, 73 Stat. 390, provided that: ‘‘Any Act of Congress enacted after the effective date of this title [Jan. 1, 1960] and which states that it shall be applicable to agencies or instru- mentalities of the United States or to corporations controlled or owned, in whole or in part, by the United States, or to officers and employees of the United States or such agencies or instrumentalities or cor- porations, shall not be applicable to a Federal land bank, Federal intermediate credit bank, or bank for co- operatives, or to its directors, officers, or employees unless such Act specifically so provides by naming such banks.’’ SUBCHAPTER I—FARM CREDIT BANKS Editorial Notes CODIFICATION Title I of the Farm Credit Act of 1971, comprising this subchapter, was originally enacted by Pub. L. 92–181, title I, Dec. 10, 1971, 85 Stat. 583, and amended by Pub. L. 96–592, Dec. 24, 1980, 94 Stat. 3437; Pub. L. 99–205, Dec. 23, 1985, 99 Stat. 1678; Pub. L. 99–509, Oct. 21, 1986, 100 Stat. 1874; Pub. L. 100–233, Jan. 6, 1988, 101 Stat. 1568. Such title is shown herein, however, as having been added by Pub. L. 100–233, title IV, § 401, Jan. 6, 1988, 101 Stat. 1622, without reference to such intervening amendments because of the extensive revision of the ti- tle’s provisions by Pub. L. 100–233. § 2011. Establishment, charters, titles, branches (a) Establishment The banks established pursuant to the merger of each District Federal Intermediate Credit Bank and Federal Land Bank (hereinafter re- ferred to in this subchapter as ‘‘Farm Credit Banks’’), as provided in section 410 of the Agri- cultural Credit Act of 1987, shall be Federally chartered instrumentalities of the United States. (b) Charters The Farm Credit Administration shall, con- sistent with this chapter, issue charters for, and approve amendments to charters of, the Farm Credit Banks. (c) Title Each Farm Credit Bank may include in its title the name of the city in which it is located or other geographical designation. (d) Branches Each Farm Credit Bank may establish such branches or other offices as may be appropriate for the effective operation of its business. (Pub. L. 92–181, title I, § 1.3, as added Pub. L. 100–233, title IV, § 401, Jan. 6, 1988, 101 Stat. 1622; amended Pub. L. 100–399, title IV, § 401(a), (b), Aug. 17, 1988, 102 Stat. 995.) Editorial Notes REFERENCES IN TEXT Section 410 of the Agricultural Credit Act of 1987, re- ferred to in subsec. (a), is section 410 of Pub. L. 100–233, which is set out as a note below. PRIOR PROVISIONS A prior section 2011, Pub. L. 92–181, title I, § 1.3, Dec. 10, 1971, 85 Stat. 583; Pub. L. 100–233, title VIII, § 802(a), Jan. 6, 1988, 101 Stat. 1710, related to establishment, title, and branches of Federal land banks prior to the general amendment of this subchapter by Pub. L. 100–233, § 401. AMENDMENTS 1988—Subsec. (a). Pub. L. 100–399, § 401(a), inserted ‘‘, as provided in section 410 of the Agricultural Credit Act of 1987,’’ before ‘‘shall’’. Subsec. (b). Pub. L. 100–399, § 401(b), amended subsec. (b) generally. Prior to amendment, subsec. (b) read as follows: ‘‘The charters or organization certificates of Farm Credit Banks may be modified from time to time by the Farm Credit Administration Board, not incon- sistent with the provisions of this subchapter, as may be necessary or expedient to implement this chapter.’’ 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 Pub. L. 100–233, title IV, § 401, Jan. 6, 1988, 101 Stat. 1622, provided that this section is effective 6 months after Jan. 6, 1988. LONG-TERM LENDING AUTHORITY OF FARM CREDIT BANK OF TEXAS WITH RESPECT TO STATES OF ALA- BAMA, LOUISIANA, AND MISSISSIPPI Pub. L. 102–552, title IV, § 401(b), Oct. 28, 1992, 106 Stat. 4128, as amended by Pub. L. 110–234, title V, § 5407(c)(3), May 22, 2008, 122 Stat. 1160; Pub. L. 110–246, § 4(a), title V, § 5407(c)(3), June 18, 2008, 122 Stat. 1664, 1922, provided that: ‘‘(1) IN GENERAL.—Notwithstanding any other provi- sion of law (except section 7.7 of the Farm Credit Act of 1971 [12 U.S.C. 2279c]), the Farm Credit Bank of Texas may act in accordance with the exclusive charter of the bank, as amended by the Farm Credit Administration on February 7, 1989, and effective February 9, 1989 (ex- cept to the extent that the charter may be further amended by the Farm Credit Administration in accord- ance with its general authorities under the Farm Cred- it Act of 1971 (12 U.S.C. 2001 et seq.). ‘‘(2) EFFECTIVE DATE.—Paragraph (1) shall take effect as if such paragraph had become law on February 7, 1989.’’ MANDATORY MERGER OF SYSTEM INSTITUTIONS Pub. L. 100–233, title IV, § 410, Jan. 6, 1988, 101 Stat. 1637, as amended by Pub. L. 100–399, title IV, § 402, Aug. 17, 1988, 102 Stat. 999; Pub. L. 102–552, title IV, § 401(a), Oct. 28, 1992, 106 Stat. 4116; Pub. L. 110–234, title V, § 5407(c)(2), May 22, 2008, 122 Stat. 1160; Pub. L. 110–246, § 4(a), title V, § 5407(c)(2), June 18, 2008, 122 Stat. 1664, 1922, provided that: ‘‘(a) IN GENERAL.—Not later than 6 months after the date of the enactment of this section [Jan. 6, 1988], the Page 1288 TITLE 12—BANKS AND BANKING § 2011 Federal land bank and the Federal intermediate credit bank of each Farm Credit System district shall merge into a Farm Credit Bank in such district pursuant to a plan of merger agreed on by the Boards of Directors of such banks and approved by the Farm Credit Adminis- tration, or if such banks fail to agree, a plan of merger prescribed by the Farm Credit Administration. The mergers required by this section shall be implemented without regard to title VII [enacting sections 2279aa to 2279aa–14 of this title, amending sections 2012, 2033, 2072, and 2093 of this title, section 1988 of Title 7, Agri- culture, and section 9105 of Title 31, Money and Fi- nance, and enacting provisions set out as notes under section 2279aa of this title and section 1988 of Title 7]. ‘‘(b) CAPITAL STOCK.—Notwithstanding section 1.6 (as added by section 401 of this Act) [12 U.S.C. 2014], the number of shares of capital stock issued by a Farm Credit Bank to stockholders and other owners of the in- stitution involved in the merger, and the rights and privileges of such shares (including voting power, re- demption rights, preferences on liquidation, and the right to dividends) shall be determined by the plan of merger adopted by the merging banks, and shall be con- sistent with section 4.3A [12 U.S.C. 2154a] and the regu- lations issued by the Farm Credit Administration. ‘‘(c) ASSISTANCE.—The Assistance Board established under section 6.0 [12 U.S.C. 2278a] shall direct the Fi- nancial Assistance Corporation established under sec- tion 6.20 [former 12 U.S.C. 2278b] to provide any Farm Credit Bank with that amount of financial assistance as is necessary to ensure that the stock of the Farm Credit Bank, upon implementation of the merger, has a book value equal to 75 percent of par, and such Farm Credit Bank shall be subject to all of the requirements of title VI of the Farm Credit Act of 1971 [12 U.S.C. 2278a et seq.]. ‘‘(d) INITIAL BOARD.—Notwithstanding section 1.4 (as added by section 401 of this Act) [12 U.S.C. 2012], the initial board of each Farm Credit Bank shall be com- posed of the members of the district board (which is dissolved upon the creation of such bank) elected by the production credit associations, Federal land bank associations, and stockholders at large. Such initial board shall operate for such term as is agreed to by the members of the board, except that such period shall not exceed two years. Thereafter the board shall be elected and serve in accordance with the provisions of section 1.4 of the Farm Credit Act of 1971 [12 U.S.C. 2012]. ‘‘(e) CLARIFICATION OF AUTHORITY REGARDING REMAIN- ING FEDERAL INTERMEDIATE CREDIT BANK.— ‘‘(1) NEGOTIATED MERGER.— ‘‘(A) REQUIREMENT.— ‘‘(i) IN GENERAL.—Not later than June 30, 1993, except as provided in subparagraph (C), the Fed- eral Intermediate Credit Bank of Jackson (as chartered on the date of enactment of this sub- section [Oct. 28, 1992]) shall merge with a Farm Credit Bank pursuant to the procedures pre- scribed by section 7.12 of the Farm Credit Act of 1971 (12 U.S.C. 2279f). ‘‘(ii) MERGER OF ENTIRE BANK.—Notwithstanding subparagraph (B), or any other provision of law, the Farm Credit Administration shall approve a merger of the Federal Intermediate Credit Bank of Jackson only if the Bank (as chartered on the date of enactment of this subsection [Oct. 28, 1992], except as provided in subparagraph (B)(ii)(II)(bb)) merges in its entirety with a Farm Credit Bank. ‘‘(iii) LIMITED LENDING AUTHORITY.—Notwith- standing any provision of the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.) (except section 7.7 of that Act [12 U.S.C. 2279c]), the Farm Credit Bank resulting from a merger under this subsection shall have only the lending authorities in the States of Alabama, Louisiana, and Mississippi that the constituent banks exercised in such States immediately prior to the merger, except as may be provided in section 5.17(a)(2) of such Act (12 U.S.C. 2252(a)(2)). ‘‘(B) OPERATING AND MERGER AUTHORITY.— ‘‘(i) IN GENERAL.—Except as provided in clause (ii), the Federal Intermediate Credit Bank of Jackson may operate subject to such provisions of part A of title II of the Farm Credit Act of 1971 [12 U.S.C. 2071 et seq.] (as in effect immediately before the amendment made by section 401 took effect) and such provisions of the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.) (as in effect after the amendment), as the Farm Credit Administra- tion deems appropriate to carry out the purposes of this subsection and such Act. This subpara- graph shall take effect as if it had become law at the same time as the amendment made by section 401 and shall remain in effect until the Bank’s merger with a Farm Credit Bank under this sub- section, or July 1, 1994, whichever is sooner. ‘‘(ii) LIMITATION ON OPERATING AUTHORITY.— ‘‘(I) IN GENERAL.—Notwithstanding clause (i) and subparagraph (A)(ii), the authority of the Federal Intermediate Credit Bank of Jackson to operate as provided under clause (i) shall expire, and the Farm Credit Administration shall re- voke the Bank’s charter, immediately on the Bank’s merger with a Farm Credit Bank under this subsection, or July 1, 1994, whichever is sooner. ‘‘(II) DISTRICT BOUNDARY MODIFICATION.—Not- withstanding clause (i), the authority of the Federal Intermediate Credit Bank of Jackson shall not include the authority for the Bank to modify, nor shall the Farm Credit Administra- tion approve such a modification to, the bound- aries of the Fifth Farm Credit District to re- affiliate any portion of the District with an- other Farm Credit Bank, except— ‘‘(aa) in the case of the merger of the entire Bank as an entity with a Farm Credit Bank such that the entire chartered territory of the Federal Intermediate Credit Bank of Jackson (except as provided in item (bb)) is merged with the Farm Credit Bank; and ‘‘(bb) in the case of the reaffiliation of the Northwest Louisiana Production Credit Asso- ciation with another farm credit district pur- suant to the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.) and any applicable regulations under such Act. ‘‘(iii) LIMITATION ON AUTHORITY TO MERGE.— ‘‘(I) IN GENERAL.—Notwithstanding clause (i), the authority of the Federal Intermediate Cred- it Bank of Jackson to merge with a Farm Cred- it Bank as provided under clause (i) shall ex- pire, and the Farm Credit Administration shall revoke the Bank’s charter, immediately on the Bank’s merger with a Farm Credit Bank under this subsection, or July 1, 1994, whichever is sooner. ‘‘(II) BANK INTEGRITY.—Notwithstanding clause (i), the authority of the Federal Inter- mediate Credit Bank of Jackson to merge with a Farm Credit Bank shall be limited to a merg- er of the Federal Intermediate Credit Bank of Jackson (as chartered on the date of enactment of this subsection [Oct. 28, 1992] to include the territory in the States of Alabama, Louisiana, and Mississippi, except as provided in clause (ii)(II)(bb)) as a whole entity such that the en- tire chartered territory of the Federal Inter- mediate Credit Bank of Jackson is merged with the Farm Credit Bank. ‘‘(III) LIMITATION.—Beginning on the date of an order issued by the Farm Credit Administra- tion under subparagraph (D), the authority of the Federal Intermediate Credit Bank of Jack- son to merge with a Farm Credit Bank shall be limited to the arbitrated merger provided for in paragraph (2). ‘‘(C) EXTENSION.— ‘‘(i) LETTER OF INTENT.—If no later than June 30, 1993, the Federal Intermediate Credit Bank of Page 1289 TITLE 12—BANKS AND BANKING § 2011 Jackson delivers to the Farm Credit Administra- tion a letter of intent to merge with a Farm Cred- it Bank, summarizing the terms and conditions of the merger (including, but not limited to, board composition, capital structure, exchange, or transfer of equities, and termination) signed by the chief executive officer and the members of the boards of directors of the Federal Intermediate Credit Bank of Jackson and the Farm Credit Bank, the Farm Credit Administration shall, on its determination that the letter of intent rep- resents a bona fide good faith agreement in prin- ciple between the two banks to merge, and that there is at least a reasonable prospect that the merger will be completed in an expeditious man- ner, grant a one-time extension, until a date cer- tain not later than October 31, 1993, of the re- quirement under subparagraph (A). Any extension provided under this subparagraph may be condi- tioned on such terms and conditions as the Farm Credit Administration determines necessary to ensure that the merger described in the letter of intent is completed by the closing date of the ex- tension. ‘‘(ii) COMPLIANCE.—If the Farm Credit Adminis- tration grants an extension under clause (i), it shall issue an order under subparagraph (D) im- mediately if— ‘‘(I) the Federal Intermediate Credit Bank of Jackson, or the Farm Credit Bank that is a sig- natory to the letter of intent under clause (i), provides written notification to the Farm Cred- it Administration that the bank does not intend to complete the merger described in the letter of intent; ‘‘(II) the Farm Credit Administration deter- mines that the Federal Intermediate Credit Bank of Jackson is not complying with any term or condition on which an extension under clause (i) was conditioned; or ‘‘(III) the Farm Credit Administration deter- mines that the Federal Intermediate Credit Bank of Jackson is not pursuing in good faith the merger provided for in the letter of intent. If the Farm Credit Administration issues an order under subparagraph (D) pursuant to this clause, the Federal Intermediate Credit Bank of Jackson shall be deemed to have failed to comply with the requirements of subparagraph (A). ‘‘(D) FAILURE TO MERGE; ISSUANCE OF ORDER.—If the Federal Intermediate Credit Bank of Jackson fails to comply, or notifies the Farm Credit Admin- istration in writing that it does not intend to com- ply, with the requirements of subparagraph (A), the Farm Credit Administration shall, within 5 days after the date specified in subparagraph (A), or such other date specified by the Farm Credit Adminis- tration under subparagraph (C), issue, notwith- standing any other provision of law, an order re- quiring the Federal Intermediate Credit Bank of Jackson to merge with the Farm Credit Bank of Texas in accordance with paragraph (2). ‘‘(2) ARBITRATED MERGER.— ‘‘(A) IN GENERAL.—Not later than 30 days after the issuance of an order by the Farm Credit Adminis- tration under paragraph (1)(D), an arbitrator (or panel of arbitrators) shall be named by the Amer- ican Arbitration Association in accordance with the Commercial Arbitration Rules of the American Arbitration Association to serve as the arbitrator referred to in this paragraph. ‘‘(B) DUTIES.—The arbitrator shall determine the terms and conditions of the merger required under an order issued under paragraph (1)(D), such that the terms and conditions are fair and equitable to the two banks, their affiliated associations, the stockholders and borrowers of the associations, and the other institutions of the Farm Credit System, and are designed to protect or enhance the safety and soundness of the Farm Credit System. The ar- bitrator shall have the authority to hire staff and secure the services of consultants as necessary to discharge the duties of the arbitrator under this paragraph. ‘‘(C) EXPENSES.—Notwithstanding any other pro- vision of law, the compensation and expenses of the arbitrator, the fees and expenses of the American Arbitration Association, and any expenses associ- ated with the referendum required under subpara- graph (F) shall be paid from the Farm Credit As- sistance Fund established under section 6.25 of the Farm Credit Act of 1971 (12 U.S.C. 2278b–5). ‘‘(D) DEVELOPMENT OF MERGER PLANS.— ‘‘(i) IN GENERAL.—Not later than 100 days after the issuance of an order by the Farm Credit Ad- ministration under paragraph (1)(D), the arbi- trator shall develop and submit for certification to the Farm Credit Administration a plan speci- fying the terms and conditions of the merger of the two banks required under this paragraph, such that the terms and conditions are fair and equitable to the two banks, their affiliated asso- ciations, the stockholders or farmer-borrowers of the associations, and the other institutions of the Farm Credit System, and are designed to protect or enhance the safety and soundness of the Farm Credit System. In devising the plan, the arbi- trator shall, to the extent practicable, achieve the following objectives: ‘‘(I) Implementation of the preferences ex- pressed by the affected and interested parties in submissions under clause (ii). ‘‘(II) Valuation of assets fairly, equitably, and consistently for all parties involved. ‘‘(III) Establishment of capitalization and funding terms in a manner that treats farmer- borrowers and stockholders in the two involved farm credit districts equitably and takes ac- count of risk. ‘‘(IV) Ensure the viability of the resulting Farm Credit Bank and associations of the bank and the ability of the resulting bank and asso- ciations of the bank to lend to eligible bor- rowers at reasonable and competitive rates of interest. ‘‘(ii) SUBMISSION OF VIEWS AND INFORMATION.— The arbitrator shall receive from affected and in- terested parties written submissions, in accord- ance with fair and reasonable procedures estab- lished by the arbitrator, regarding the terms and conditions of an appropriate plan for the merger of the two banks required under this paragraph. The Federal Intermediate Credit Bank of Jack- son, the Farm Credit Bank of Texas, and their af- filiated associations shall make available all books, records, financial information, and other material that the arbitrator determines is nec- essary to the development of the plan or the ful- fillment of any other requirement under this paragraph. A copy of any submission or informa- tion provided to the arbitrator by any party under this paragraph shall be furnished to the Federal Intermediate Credit Bank of Jackson or the Farm Credit Bank of Texas on the written re- quest of the bank and at the bank’s expense. The arbitrator shall provide both banks with a reason- able opportunity to review and respond to any submission or information provided by any party. ‘‘(iii) CONTENT OF PLAN; FARM CREDIT BANK.— The plan developed and submitted under clause (i) shall include provisions regarding the following matters: ‘‘(I) The initial composition, following the merger, of the board of directors of the result- ing Farm Credit Bank (which shall be subject to change thereafter in accordance with the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.) and any applicable regulations). ‘‘(II) The valuation, for purposes of the merg- er, of the assets and liabilities of the merging banks. Page 1290 TITLE 12—BANKS AND BANKING § 2011 ‘‘(III) The terms and conditions on which the shares of capital stock of the Federal Inter- mediate Credit Bank of Jackson and, if nec- essary, the Farm Credit Bank of Texas, will be converted into shares of the resulting Farm Credit Bank. ‘‘(IV) The capital structure and capitalization levels of the resulting Farm Credit Bank and the affiliated associations of the Farm Credit Bank in the States of Alabama, Louisiana, and Mississippi as the arbitrator determines nec- essary to carry out the purposes of this para- graph (which shall be subject to change there- after in accordance with the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.) and any applicable regulations). ‘‘(V) The terms of financing agreements be- tween any production credit associations or ag- ricultural credit associations described in clause (iv), and the resulting Farm Credit Bank (which shall be subject to change thereafter in accordance with the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.) and any applicable regula- tions). ‘‘(VI) Any other terms and conditions or other matters that the arbitrator considers nec- essary. ‘‘(iv) CONTENT OF PLAN; AGRICULTURAL CREDIT ASSOCIATIONS.—If the arbitrator determines that the chartering of agricultural credit associations in the States of Alabama, Louisiana, and Mis- sissippi will be in the best interests of the farm- ers, ranchers, and aquatic producers eligible to borrow from Farm Credit System associations, the plan required under this subparagraph shall also include, based on submissions from the Fed- eral Intermediate Credit Bank of Jackson and the Farm Credit Bank of Texas, provisions for the es- tablishment of agricultural credit associations to operate in the States, subject to approval in the referendum under subparagraph (F). Such provi- sions shall include provisions regarding the fol- lowing matters: ‘‘(I) A proposal for the establishment of an ag- ricultural credit association in each of the geo- graphic areas specified in subparagraph (F)(iii) (the charters of which, if validly issued under subparagraph (G)(i) pursuant to approval in the referendum under subparagraph (F), shall be subject to change thereafter in accordance with the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.) and any applicable regulations). ‘‘(II) The initial composition, if the proposal for the establishment of agricultural credit as- sociations is approved, of the board of directors of each such agricultural credit association (which shall be subject to change thereafter in accordance with the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.) and any applicable regula- tions). ‘‘(III) The valuation, for purposes of the pro- posed merger of the production credit associa- tion and the Federal land bank association in each of the geographic areas specified in sub- paragraph (F)(iii), of the assets and liabilities of the associations. ‘‘(IV) The terms and conditions on which the shares of capital stock of any associations that may merge under the plan to form agricultural credit associations will be converted into shares of the resulting agricultural credit associations. ‘‘(V) The capital structure and capitalization levels of the resulting Farm Credit Bank and such affiliated associations of the Farm Credit Bank in the States of Alabama, Louisiana, and Mississippi as the arbitrator determines nec- essary to carry out the purposes of this para- graph (which capital structure and capitaliza- tion levels shall be subject to change thereafter in accordance with the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.) and any applicable regu- lations). ‘‘(VI) The terms of financing agreements be- tween any agricultural credit associations and the resulting Farm Credit Bank (which shall be subject to change thereafter in accordance with the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.) and any applicable regulations). ‘‘(VII) Any other terms and conditions or other matters that the arbitrator considers nec- essary. ‘‘(v) CONSULTATION WITH INSURANCE CORPORA- TION.—The arbitrator shall consult with the Farm Credit System Insurance Corporation regarding the valuation of the assets and liabilities under the plan of merger, the capitalization of the Farm Credit System institutions resulting under the plan, and any other matters relevant to the as- sistance to be provided by the Insurance Corpora- tion to facilitate the merger under subparagraph (H). ‘‘(E) CERTIFICATION OF PLAN.—Not later than 30 days after the receipt of the plan developed by the arbitrator, the Farm Credit Administration shall— ‘‘(i) certify; or ‘‘(ii) recommend to the arbitrator revisions to the plan that, if incorporated into the plan, will allow the Farm Credit Administration to certify, that the resulting bank and any resulting associa- tions are proposed to be organized in such a fashion that they will, on implementation of the plan, oper- ate in compliance with applicable laws and regula- tions. The arbitrator and the Farm Credit Adminis- tration shall work cooperatively to ensure the ex- peditious issuance of the certification. If the Farm Credit Administration recommends to the arbi- trator revisions to the plan that, if incorporated into the plan, will allow the Farm Credit Adminis- tration to certify the plan, the arbitrator shall, not later than 15 days after receipt of the recommended revisions, incorporate the revisions into the plan as the arbitrator deems appropriate to secure the cer- tification. ‘‘(F) REFERENDUM ON ASSOCIATION STRUCTURE.— ‘‘(i) IN GENERAL.—Not later than 170 days after the issuance of an order by the Farm Credit Ad- ministration under paragraph (1)(D), the Amer- ican Arbitration Association shall conduct, and compile and forward to the Farm Credit Adminis- tration the results of, a vote of current farmer- borrowers of the production credit associations and the Federal land bank associations in the States of Alabama, Louisiana, and Mississippi, in accordance with the Election Rules of the Amer- ican Arbitration Association, to determine whether the farmer-borrowers of each association in the geographic areas described in clause (iii) prefer to have credit delivered— ‘‘(I) in the case of production credit associa- tion farmer-borrowers, through a production credit association or through an agricultural credit association as proposed in the plan; and ‘‘(II) in the case of Federal land bank associa- tion farmer-borrowers, through a Federal land bank association or through an agricultural credit association as proposed in the plan. Each farmer-borrower shall be entitled to one vote. The arbitrator shall establish record dates and other procedures for conducting the ref- erendum. The Federal Intermediate Credit Bank of Jackson, the Farm Credit Bank of Texas, and their affiliated associations shall cooperate in the conduct of the referendum, as determined nec- essary by the Arbitrator. ‘‘(ii) DISCLOSURE.—The arbitrator shall send to farmer-borrowers eligible to vote under this sub- paragraph, with their ballot, a statement describ- ing the potential consequences to the farmer-bor- rowers, and to the associations from which they borrow, of voting to charter an agricultural cred- Page 1291 TITLE 12—BANKS AND BANKING § 2011 it association and setting forth factors that farm- er-borrowers should consider relevant to the choice between credit delivery through the cur- rent association structure and the chartering of an agricultural credit association. The arbitrator shall develop the disclosure materials in coopera- tion with the Farm Credit Administration and en- sure that the materials are not inconsistent with applicable laws and regulations. ‘‘(iii) TABULATION OF RESULTS.—The results of the vote under this subparagraph shall be com- piled separately for production credit association farmer-borrowers and Federal land bank associa- tion farmer-borrowers in each of the following seven geographic areas: ‘‘(I) The area served by the Federal Land Bank Association of South Mississippi. ‘‘(II) The area served by the Federal Land Bank Association of North Mississippi. ‘‘(III) The area served by the Federal Land Bank Association of South Alabama. ‘‘(IV) The area served by the Federal Land Bank Association of North Alabama. ‘‘(V) The area served by the Federal Land Bank Association of South Louisiana. ‘‘(VI) The area served by both the Federal Land Bank Association of North Louisiana and the First South Production Credit Association. ‘‘(VII) The area served by both the Federal Land Bank Association of North Louisiana and the Northwest Louisiana Production Credit As- sociation. ‘‘(iv) PUBLICATION OF RESULTS.—The results of the vote under this subparagraph, as tabulated by the American Arbitration Association, shall be made promptly available to the public in a man- ner determined appropriate by the Farm Credit Administration. ‘‘(G) IMPLEMENTATION.—Not later than 10 days after the date of the receipt of the results of the referendum conducted under subparagraph (F), the Farm Credit Administration shall issue such char- ters or charter amendments and take such other regulatory actions as may be necessary to imple- ment the merger or mergers as provided for under the certified plan. In this regard, the Farm Credit Administration shall— ‘‘(i) issue a charter or charter amendment and take any such other regulatory actions as may be necessary to provide for the establishment of an agricultural credit association in each of the geo- graphic areas described in subparagraph (F)(iii) where a majority of the farmer-borrowers of both the production credit association and the Federal land bank association voted under subparagraph (F)(i) that they preferred to have credit delivered through an agricultural credit association (which charter shall be subject to change thereafter in accordance with the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.) and any applicable regula- tions); and ‘‘(ii) not issue a charter or charter amendment or take any such other regulatory action to pro- vide for the establishment of an agricultural cred- it association in any of the geographic areas de- scribed in subparagraph (F)(iii) where less than a majority of the farmer-borrowers of the produc- tion credit association or the Federal land bank association voted in the referendum under sub- paragraph (F)(i) that they preferred to have cred- it delivered through an agricultural credit asso- ciation (provided that the charter of any remain- ing association in such geographic area shall be subject to change thereafter in accordance with the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.) and any applicable regulations). ‘‘(H) FACILITATION.— ‘‘(i) IN GENERAL.—Beginning on the date of the issuance of an order by the Farm Credit Adminis- tration under paragraph (1)(D), the Farm Credit System Insurance Corporation shall expend amounts from the Farm Credit Insurance Fund to the extent necessary to facilitate the merger pre- scribed in the plan. ‘‘(ii) MAINTENANCE OF BOOK VALUE.—Assistance provided by the Corporation under this subpara- graph shall be in amounts not to exceed that re- quired to maintain book value per share of stock- holders’ equity at the same value reflected on the most recent audited financial statements of the Federal Intermediate Credit Bank of Jackson and the Farm Credit Bank of Texas prior to or effec- tive with the date of the merger. ‘‘(iii) OTHER ASSISTANCE.—Until the expiration of 5 years from the effective date of a merger au- thorized by this subsection, or the final resolu- tion of any litigation against the Federal Inter- mediate Credit Bank of Jackson or any of its stockholders pending on the date of the enact- ment of this subsection [Oct. 28, 1992], whichever is later, the Corporation shall guarantee prompt payment of any loss experienced by the merged bank, which loss is caused by the failure of any association-stockholder of the merged bank that was a stockholder of the Federal Intermediate Credit Bank of Jackson immediately prior to the merger, or any successor to the association, to pay when due any obligation of principal or inter- est owed by the association or its successor to the resulting bank. ‘‘(iv) TERMS AND CONDITIONS.—Assistance pro- vided by the Corporation under this subparagraph shall be on such terms and conditions as the Cor- poration deems appropriate to facilitate the merger. ‘‘(I) SAFETY AND SOUNDNESS.— ‘‘(i) IN GENERAL.—Except as provided in clause (ii), if at any time prior to the completion of the merger required under this subsection the Farm Credit Administration determines that the Fed- eral Intermediate Credit Bank of Jackson is being operated in an unsafe or unsound manner (as de- termined in accordance with the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.)), the Farm Credit Administration, after consultation with the re- spective boards of directors of the affected banks and taking into consideration the purposes of this subsection, may require the Federal Intermediate Credit Bank of Jackson to merge with a Farm Credit Bank, subject to such terms and conditions as the Farm Credit Administration may pre- scribe. The Farm Credit System Insurance Cor- poration shall expend amounts in the Farm Cred- it Insurance Fund to the extent necessary to fa- cilitate the merger prescribed under this subpara- graph, including the provision of assistance as provided in section 5.61(a)(2)(A)(iii) of the Farm Credit Act of 1971 (12 U.S.C. 2277a–10(a)(2)(A)(iii)), on such terms and conditions as the Corporation deems appropriate. ‘‘(ii) ARBITRATED MERGER.—If at any time after the Farm Credit Administration issues an order under paragraph (1)(D), but prior to the comple- tion of the merger required under this subsection, the Farm Credit Administration determines that the Federal Intermediate Credit Bank of Jackson is being operated in an unsafe or unsound manner (as determined in accordance with the Farm Cred- it Act of 1971 (12 U.S.C. 2001 et seq.)), the Farm Credit Administration shall, after consultation with the boards of directors of the Federal Inter- mediate Credit Bank of Jackson and the Farm Credit Bank of Texas, take such action as it deems necessary pursuant to the authorities pro- vided under the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.) to return the operation of the Federal Intermediate Credit Bank of Jackson to a safe and sound condition, pending the completion of the merger under paragraph (2). ‘‘(J) MERGER PLAN FOR AGRICULTURAL CREDIT AS- SOCIATIONS.—In any of the States of Alabama, Lou- Page 1292 TITLE 12—BANKS AND BANKING § 2012 isiana, or Mississippi where all of the associations are chartered as agricultural credit associations, the boards of directors of each such association in each State are encouraged to submit to the farmer- borrowers of each such association for their ap- proval a plan for merging the associations into one statewide agricultural credit association, in accord- ance with the applicable provisions of the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.). ‘‘(K) DEFINITIONS.—As used in this paragraph: ‘‘(i) AGRICULTURAL CREDIT ASSOCIATION.—The term ‘agricultural credit association’ means an association having the same authorities, at- tributes, and obligations as, and for all purposes an agricultural credit association resulting from the implementation of the plan under this para- graph shall be deemed to be, an association re- sulting from the merger of a production credit as- sociation and a Federal land bank association under section 7.8 of the Farm Credit Act of 1971 (12 U.S.C. 2279c–1). ‘‘(ii) FARMER-BORROWER.—The term ‘farmer-bor- rower’ means a borrower from a Farm Credit Sys- tem association in the State of Alabama, Lou- isiana, or Mississippi who holds voting stock, or is eligible to hold voting stock, in the association or a stockholder in any such association. ‘‘(3) REVIEW.— ‘‘(A) IN GENERAL.—Actions and determinations of the arbitrator, the Farm Credit Administration, or the Farm Credit System Insurance Corporation pursuant to this subsection shall not be subject to judicial review except as provided in this para- graph, nor shall they be subject to the require- ments of subchapter II of chapter 5 or chapter 7 of title 5, United States Code. ‘‘(B) AGENCY DETERMINATIONS.— ‘‘(i) IN GENERAL.—Any petition for review of a determination or other action of the Farm Credit Administration or the Farm Credit System Insur- ance Corporation under this subsection shall be filed in the United States Court of Appeals for the District of Columbia Circuit not later than 10 days after the determination, or the petition shall be barred. The court shall have exclusive ju- risdiction to determine the proceeding in accord- ance with standard procedures as supplemented by procedures hereinafter provided and no other district court or court of appeals of the United States shall have jurisdiction over any such chal- lenge in any proceeding instituted prior to, on, or after the date of enactment of this subsection. The review of any determination or action of the Farm Credit Administration or the Farm Credit System Insurance Corporation under this sub- section shall be based on the examination of all of the information before the Farm Credit Adminis- tration or the Farm Credit System Insurance Cor- poration, as the case may be, at the time the de- termination was made. The court reviewing the determination or action shall not enter a stay or order of mandamus unless the court has deter- mined, after notice and a hearing before a panel of the court, that the agency action complained of was arbitrary, capricious, an abuse of discre- tion, or otherwise not in accordance with law. ‘‘(ii) PROCEDURES.—Notwithstanding any other provision of law, the court may set rules gov- erning the procedures of any such proceeding that set page limits on briefs and time limits for filing briefs and motions and other actions that are shorter than the limits specified in the Federal Rules of Civil or Appellate Procedure. ‘‘(iii) EXPEDITED REVIEW.—Any such proceeding before the court shall be assigned for hearing and completed at the earliest possible date, and shall be expedited in every way. The court shall render its final decision relative to any challenge not later than 50 days from the date the challenge is brought unless the court determines that a longer period of time is required to satisfy the require- ments of the Constitution. ‘‘(C) ARBITRATOR DETERMINATIONS.— ‘‘(i) IN GENERAL.—Except as otherwise provided in this paragraph, any petition for review of a de- termination or other action of the arbitrator named under paragraph (2) shall be filed in ac- cordance with the United States Arbitration Act (9 U.S.C. 1 et seq.). Such Act shall apply to the ar- bitration conducted pursuant to paragraph (2) to the same extent as if the arbitration were estab- lished in a contract evidencing a transaction in commerce between the Federal Intermediate Credit Bank of Jackson and the Farm Credit Bank of Texas. ‘‘(ii) PROCEDURES.—Notwithstanding the United States Arbitration Act (9 U.S.C. 1 et seq.), any pe- tition for review of a determination or other ac- tion of the arbitrator under this subsection shall be filed not later than 10 days after the deter- mination, or the petition shall be barred. The court specified under such Act shall have exclu- sive jurisdiction to determine the proceeding in accordance with the applicable procedures under such Act, as supplemented by procedures herein- after provided, and no other district court shall have jurisdiction over any such challenge in any such proceeding. Notwithstanding any other pro- vision of law, the court may set rules governing the procedures of any such proceeding that set page limits on briefs and time limits for filing briefs and motions and other actions that are shorter than the limits specified in the United States Arbitration Act or the Federal Rules of Civil or Appellate Procedure [28 U.S.C. App.]. ‘‘(iii) EXPEDITED REVIEW.—Any such proceeding before the court shall be assigned for hearing and completed at the earliest possible date, and shall be expedited in every way. The court shall render its final decision relative to any challenge as soon as possible in accordance with the United States Arbitration Act (9 U.S.C. 1 et seq.), or not later than 30 days from the date the challenge is brought, whichever is sooner, unless the court de- termines that a longer period of time is required to satisfy the requirements of the Constitution.’’ § 2012. Board of directors Each Farm Credit Bank shall elect a board of directors of such number, for such term, in 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 institu- tion. (Pub. L. 92–181, title I, § 1.4, as added Pub. L. 100–233, title IV, § 401, Jan. 6, 1988, 101 Stat. 1622; amended Pub. L. 100–399, title IV, § 401(c), Aug. 17, 1988, 102 Stat. 995.) Editorial Notes PRIOR PROVISIONS A prior section 2012, Pub. L. 92–181, title I, § 1.4, Dec. 10, 1971, 85 Stat. 584; Pub. L. 96–592, title I, § 101, Dec. 24, 1980, 94 Stat. 3437; Pub. L. 99–205, title II, § 205(d)(1), Dec. 23, 1985, 99 Stat. 1703; Pub. L. 100–233, title VII, § 705(a), title VIII, § 802(b), Jan. 6, 1988, 101 Stat. 1706, 1710; Pub. L. 100–399, title VI, § 604, Aug. 17, 1988, 102 Stat. 1006, re- lated to corporate existence and general corporate pow- ers, prior to the general amendment of this subchapter by Pub. L. 100–233, § 401. AMENDMENTS 1988—Pub. L. 100–399 struck out ‘‘from its voting stockholders’’ after ‘‘shall elect’’.