12 U.S. Code § 2162 - Protection of borrower stock
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(a) Retirement of stock
Notwithstanding any other section of this chapter, each institution of the Farm Credit System, when retiring eligible borrower stock in accordance with this chapter, shall retire such stock at par value.
(b) Certain powers not affected
This section does not affect the authority of any institution of the Farm Credit System—
(2) to cancel borrower stock at par value under section 2202b of this title; or
(c) Inability to retire stock at par value
If an institution is unable to retire eligible borrower stock at par value due to the liquidation of the institution, the receiver of the institution shall retire such stock at par value as would have been retired in the ordinary course of business of the institution, and—
(1) during the 5-year period beginning on January 6, 1988, the Assistance Board shall direct the Financial Assistance Corporation to provide the receiver with sufficient funds to enable the receiver to carry out this subsection; and
For purposes of this section:
(1) Borrower stock
The term “borrower stock” means voting and nonvoting stock, equivalent contributions to a guaranty fund, participation certificates, allocated equities, and other similar equities that are subject to retirement under a revolving cycle issued by any System institution and held by any person other than any System institution.
(2) Eligible borrower stock
The term “eligible borrower stock” means borrower stock that—
(B) is issued or allocated after January 6, 1988, but prior to the earlier of—
(i) in the case of each bank and association, the date of approval, by the stockholders of such bank or association, of the capitalization requirements of the institution in accordance with section 2154a of this title; or
(C) was, after January 1, 1983, but before January 6, 1988, frozen by an institution that was placed in liquidation; or
(4) Par value
The term “par value” means—
(B) in the case of participation certificates and other equities and interests not described in subparagraph (C), face or equivalent value; or
(C) in the case of participation certificates and allocated equities subject to retirement under a revolving cycle but that a System institution elects to retire out of order for application against a loan in default or otherwise as provided in this chapter, par or face value discounted, at a rate determined by the institution, to reflect the present value of the equity or interest as of the date of such retirement.
Source(Pub. L. 92–181, title IV, § 4.9A, as added Pub. L. 100–233, title I, § 101,Jan. 6, 1988, 101 Stat. 1572; amended Pub. L. 100–399, title I, § 101(b)–(d), Aug. 17, 1988, 102 Stat. 989.)
A prior section 4.9A of Pub. L. 92–181, which authorized a central reserve for Farm Credit System, was classified to section 2161 of this title and was repealed by Pub. L. 100–399, § 101(a).
1988—Subsec. (a). Pub. L. 100–399, § 101(b), struck out provision that an institution whose capital stock is impaired coordinate retirement of stock under this section with the activities of the Assistance Board and the Financial Assistance Corporation.
Subsec. (c). Pub. L. 100–399, § 101(c), inserted “stock” in subsec. heading and amended text generally. Prior to amendment, text read as follows: “If an institution is unable to retire eligible borrower stock at par value due to the freezing of such stock during a liquidation of the institution, the receiver of the institution shall retire such stock at par value as would have been retired in the ordinary course of business of the institution and the Financial Assistance Corporation, on request of the Assistance Board, shall provide the receiver with sufficient funds to enable the receiver to carry out this subsection.”
Subsec. (d)(2)(B). Pub. L. 100–399, § 101(d), in introductory provision substituted “issued or allocated” for “required to be purchased, and is purchased, as a condition of obtaining a loan made” and in cl. (i) substituted “section 2154a of this title” for “section 4.9B”.
Effective Date of 1988 Amendment