(Pub. L. 92–181, title IV, § 4.3, Dec. 10, 1971, 85 Stat. 611; Pub. L. 99–205, title I, § 101(3),Dec. 23, 1985, 99 Stat. 1678; Pub. L. 100–233, title III, § 304, title VIII, §§ 804(a)(3),
(q),Jan. 6, 1988, 101 Stat. 1621, 1715, 1716; Pub. L. 100–399, title VII, § 702(b),Aug. 17, 1988, 102 Stat. 1006.)
1988—Subsec. (b)(2). Pub. L. 100–233
, § 804(a)(3), struck out subpar. (A) designation and struck out subpar. (B) which read as follows: “Any directive issued under this paragraph, including plans submitted pursuant thereto, shall be enforceable under the provisions of section
of this title to the same extent as an effective and outstanding order issued under section
of this title that has become final.”
Subsec. (c). Pub. L. 100–233
, § 805(q), which directed the amendment of subsec. (c) by substituting “direct or fully guaranteed” for “direct of fully guaranteed” was repealed by Pub. L. 100–399
, § 702(b). See Construction of 1988 Amendment note below.
Pub. L. 100–233
, § 304, amended subsec. (c) generally. Prior to amendment, subsec. (c) read as follows: “Each bank shall have on hand at the time of issuance of any long-term notes, bonds, debentures, or other similar obligations and at all times thereafter maintain, free from any lien or other pledge, notes and other obligations representing loans made under the authority of this chapter, obligations of the United States or any agency thereof direct or fully guaranteed, other readily marketable securities approved by the Farm Credit Administration, or cash, in an aggregate value equal to the total amount of long-term notes, bonds, debentures, or other similar obligations outstanding for which the bank is primarily liable.”
1985—Pub. L. 99–205
substituted “Capital adequacy of banks and associations” for “Aggregate of obligations; collateral” in section catchline.
Subsec. (a). Pub. L. 99–205
amended subsec. (a) generally. Prior to amendment, subsec. (a) read as follows: “No issue of long-term notes, bonds, debentures, or other similar obligations by a bank or banks shall be approved in an amount which, together with the amount of other bonds, debentures, long-term notes, or other similar obligations issued and outstanding, exceeds twenty times the capital and surplus of all the banks which will be primarily liable on the proposed issue, or such lesser amount as the Farm Credit Administration shall establish by regulation.”
Subsecs. (b), (c). Pub. L. 99–205
added subsec. (b) and redesignated former subsec. (b) as (c).
Effective Date of 1985 Amendment
Amendment by Pub. L. 99–205
effective thirty days after Dec. 23, 1985, see section 401 ofPub. L. 99–205
, set out as a note under section
of this title.
Construction of 1988 Amendment
Section 702(b) ofPub. L. 100–399
provided that section 805(q) ofPub. L. 100–233
, cited as a credit to this section, is repealed and that subsec. (c) of this section shall be applied and administered as if such section had not been enacted.
Minimum Capital Adequacy Standards
Section 301(a) ofPub. L. 100–233
, as amended by Pub. L. 100–399
, title III, § 301(a),Aug. 17, 1988, 102 Stat. 993
, provided that:
“(1) In general.—
“(A) Establishment.—Within 120 days after the date of the enactment of this Act [Jan. 6, 1988], the Farm Credit Administration shall issue regulations under section 4.3(a) of the Farm Credit Act of 1971 (12
]) that establish minimum permanent capital adequacy standards for Farm Credit System institutions.
“(B) Basis for establishment.—The standards established under subparagraph (A) shall apply to an institution based on the financial statements of the institution prepared in accordance with generally accepted accounting principles.
“(C) Ratio of capital to assets.—The standards established under subparagraph (A) shall specify fixed percentages representing the ratio of permanent capital of the institution to the assets of the institution, taking into consideration relative risk factors as determined by the Farm Credit Administration.
“(D) Phase-in period.—The standards established under subparagraph (A) shall be phased in during the 5-year period beginning on the date of the enactment of this Act [Jan. 6, 1988].
“(2) Emergency power not available.—The Farm Credit Administration shall not invoke the emergency provisions of section 5.17(c)(2) of the Farm Credit Act of 1971 (12
]) with respect to the issuance of the regulations required under paragraph (1)(A).
“(3) Prohibitions during transition period.—During the 5-year period specified in paragraph (1)(D), the Farm Credit Administration shall not initiate any receivership, conservatorship, liquidation, or enforcement action against any System institution certified to issue preferred stock under section
.27 of the Farm Credit Act of 1971 (as added by section 201 of this Act) [12
], solely because of the failure of such institution to meet minimum permanent capital adequacy standards unless such action is recommended or concurred in by the Farm Credit System Assistance Board established under section
.0 of such Act (as added by section 201 of this Act) [12
“(4) Permanent capital.—For purposes of this subsection, the term ‘permanent capital’ has the same meaning given that term in section 4.3A(a)(1) of the Farm Credit Act of 1971 [12