
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 12USC2071]

 
                       TITLE 12--BANKS AND BANKING
 
                     CHAPTER 23--FARM CREDIT SYSTEM
 
                 SUBCHAPTER II--FARM CREDIT ASSOCIATIONS
 
                 Part A--Production Credit Associations
 
Sec. 2071. Organization and charters


(a) Charter

    Each production credit association shall continue as a Federally 
chartered instrumentality of the United States.

(b) Organization

                           (1) In general

        Production credit associations may be organized by 10 or more 
    farmers or ranchers or producers or harvesters of aquatic products 
    desiring to borrow money under the provisions of this part.

                     (2) Articles of association

        The proposed articles of association shall be forwarded to the 
    Farm Credit Bank for the district accompanied by an agreement to 
    subscribe on behalf of the association for stock in the bank in such 
    amounts as may be required by the bank.

                      (3) Contents of articles

        The articles shall specify in general terms the--
            (A) objects for which the association is formed;
            (B) powers to be exercised by the association in carrying 
        out the functions authorized by this part; and
            (C) territory the association proposes to serve.

                           (4) Signatures

        The articles shall be signed by persons desiring to form such an 
    association and shall be accompanied by a statement signed by each 
    such person establishing eligibility to borrow from the association 
    in which such person will become a stockholder.

                           (5) Copy to FCA

        A copy of the articles of association shall be forwarded to the 
    Farm Credit Administration with the recommendations of the bank 
    concerning the need for such an association in order to adequately 
    serve the credit needs of eligible persons in the proposed territory 
    and whether that territory includes any area described in the 
    charter of another production credit association.

                        (6) Denial of charter

        The Farm Credit Administration for good cause shown may deny the 
    charter.

                      (7) Approval of articles

        On approval of the proposed articles by the Farm Credit 
    Administration, and on the issuance of a charter, the association 
    shall become as of such date a federally chartered body corporate 
    and an instrumentality of the United States.

                          (8) Powers of FCA

        The Farm Credit Administration shall have the power, under rules 
    and regulations prescribed by the Farm Credit Administration or by 
    prescribing in the terms of the charter, to--
            (A) provide for the organization of the association;
            (B) provide for the initial amount of stock of the 
        association;
            (C) provide for the territory within which the association's 
        operations may be carried on; and
            (D) approve amendments to the charter of the association.

(Pub. L. 92-181, title II, Sec. 2.0, as added Pub. L. 100-233, title IV, 
Sec. 401, Jan. 6, 1988, 101 Stat. 1629; amended Pub. L. 100-399, title 
IV, Sec. 401(m), Aug. 17, 1988, 102 Stat. 997; Pub. L. 102-237, title V, 
Sec. 502(b), Dec. 13, 1991, 105 Stat. 1868.)


                            Prior Provisions

    A prior section 2071, Pub. L. 92-181, title II, Sec. 2.0, Dec. 10, 
1971, 85 Stat. 590; Pub. L. 100-233, title VIII, Sec. 802(h), Jan. 6, 
1988, 101 Stat. 1711, related to establishment and branches of Federal 
intermediate credit banks, prior to the general amendment of this 
subchapter by Pub. L. 100-233, Sec. 401.


                               Amendments

    1991--Subsec. (b)(8). Pub. L. 102-237 substituted ``charter, to'' 
for ``charter to'' in introductory provisions.
    1988--Subsec. (b)(1). Pub. L. 100-399, Sec. 401(m)(1), substituted 
``this part'' for ``this subchapter''.
    Subsec. (b)(3)(B). Pub. L. 100-399, Sec. 401(m)(2), (3), struck out 
``the'' before ``powers'' and substituted ``this subtitle'' for ``this 
part'', both of which for purposes of codification were translated as 
``this part'', requiring no change in text.
    Subsec. (b)(3)(C). Pub. L. 100-399, Sec. 401(m)(3), struck out 
``the'' before ``territory''.
    Subsec. (b)(8). Pub. L. 100-399, Sec. 401(m)(4), struck out in 
introductory provision ``or by approval of bylaws of the association'' 
after ``the charter'' and amended subpar. (D) generally. Prior to 
amendment, subpar. (D) read as follows: ``direct at any time such 
changes in the charter as the Farm Credit Administration finds necessary 
for the accomplishment of the purposes of this chapter''.


                    Effective Date of 1991 Amendment

    Amendment by Pub. L. 102-237 effective as if included in the 
provision of the Food, Agriculture, Conservation, and Trade Act of 1990, 
Pub. L. 101-624, to which the amendment relates, see section 1101(b)(4) 
of Pub. L. 102-237, set out as a note under section 1421 of Title 7, 
Agriculture.


                    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 section 1001(b) of Pub. L. 100-399, set out as a 
note under section 2002 of this title.


                             Effective Date

    Section 401 of Pub. L. 100-233 provided in part that this subchapter 
is effective 6 months after Jan. 6, 1988.


     Merger of Production Credit Associations and Federal Land Bank 
                              Associations

    Section 411 of Pub. L. 100-233, as amended by Pub. L. 100-399, title 
IV, Sec. 403, Aug. 17, 1988, 102 Stat. 999, provided that:
    ``(a) Submission of Proposal.--Not later than 6 months after the 
date of the merger of the Federal land bank and the Federal intermediate 
credit bank in a district, the Boards of Directors of each Federal land 
bank association and each production credit association in such 
district, that share substantially the same geographical territory with 
each other, shall submit to the voting stockholders of each such 
association for their approval, a plan, approved by the supervising bank 
and the Farm Credit Administration, for merging such associations.
    ``(b) Prerequisites to Merger.--
        ``(1) Stockholder vote.--The stockholder vote required for 
    approval of a merger under subsection (a) shall be a majority of the 
    voting stockholders of each association voting, in person or by 
    written proxy, at a duly authorized stockholders meeting.
        ``(2) Submission to fca.--Not later than 60 days prior to the 
    end of the 12-month period beginning on the date of the enactment of 
    this section [Jan. 6, 1988], the plan of merger under subsection 
    (a), together with all information to be presented to the 
    stockholders, shall be submitted to the Farm Credit Administration.
        ``(3) Expedited consideration by fca.--The Farm Credit 
    Administration shall expedite its consideration of the plan and 
    accompanying information submitted under paragraph (2) so that 
    review and approval of such plan and information shall be completed 
    by the Administration so as to enable a stockholder vote to occur 
    within the 12-month period referred to in paragraph (2).
    ``(c) Direct Lenders.--On approval of a merger under this 
subsection, the resulting association shall be a direct lender in the 
same manner as applies to production credit associations.''


           Reassignment of Associations to Adjoining Districts

    Section 433 of Pub. L. 100-233, as amended by Pub. L. 100-399, title 
IV, Sec. 417, Aug. 17, 1988, 102 Stat. 1004, provided that:
    ``(a) Petition of Bank.--Notwithstanding any other provision of law, 
effective for the 12-month period beginning on the date of enactment of 
this Act [Jan. 6, 1988], each Federal land bank association or 
production credit association, whose chartered territory adjoins the 
territory of another district, may petition the Farm Credit 
Administration to amend the charters of the association and the 
adjoining district bank to provide that the territory of the association 
is part of the adjoining district.
    ``(b) Requirements of Petition.--To be considered under this 
section, the petition must be signed by not less than 15 percent of the 
stockholders of the association. Only one such petition may be filed by 
an association under this section.
    ``(c) FCA Action.--The Farm Credit Administration shall take any 
action necessary--
        ``(1) to amend the charters of the association and the district 
    bank; and
        ``(2) to incorporate the petitioning association into the 
    adjoining district if the reassignment is approved by--
            ``(A) a majority of the stockholders of the association 
        voting, in person or by proxy, at a duly authorized 
        stockholders' meeting held for such purpose;
            ``(B) the board of directors of the adjoining district bank;
            ``(C) the Farm Credit System Assistance Board; and
            ``(D) the Farm Credit Administration Board.''
