
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: 12USC2075]

 
                       TITLE 12--BANKS AND BANKING
 
                     CHAPTER 23--FARM CREDIT SYSTEM
 
                 SUBCHAPTER II--FARM CREDIT ASSOCIATIONS
 
                 Part A--Production Credit Associations
 
Sec. 2075. Short- and intermediate-term loans; participation; 
        other financial assistance; terms; conditions; interest; 
        security
        

(a) Short- and intermediate-term loans

    Each production credit association, under standards prescribed by 
the board of directors of the Farm Credit Bank of the district, may 
make, guarantee, or participate with other lenders in short- and 
intermediate-term loans and other similar financial assistance to--
        (1) bona fide farmers and ranchers and the producers or 
    harvesters of aquatic products, for agricultural or aquatic purposes 
    and other requirements of such borrowers, including financing for 
    basic processing and marketing directly related to the operations of 
    the borrower and those of other eligible farmers, ranchers, and 
    producers or harvesters of aquatic products, except that the 
    operations of the borrower shall supply some portion of the total 
    processing or marketing for which financing is extended, except that 
    the aggregate of the financing provided by any association for basic 
    processing and marketing directly related to the operations of 
    farmers, ranchers, and producers or harvesters of aquatic products, 
    if the operations of the applicant supply less than 20 percent of 
    the total processing or marketing for which financing is extended, 
    shall not exceed 15 percent of the total of all outstanding loans of 
    all associations in the district at the end of its preceding fiscal 
    year;
        (2) rural residents for housing financing in rural areas, under 
    regulations of the Farm Credit Administration; and
        (3) persons furnishing to farmers and ranchers farm-related 
    services directly related to their on-farm operating needs.

(b) Rural housing

                           (1) In general

        Rural housing financed under this part shall be for single-
    family, moderate-priced dwellings and the appurtenances of such not 
    inconsistent with the general quality and standards of housing 
    existing in, or planned or recommended for, the rural area where it 
    is located.

                           (2) Limitation

        The aggregate of such housing loans in an association to persons 
    other than farmers or ranchers shall not exceed 15 percent of the 
    outstanding loans at the end of its preceding fiscal year except on 
    prior approval by the Farm Credit Bank of the district. The 
    aggregate of such housing loans in any farm credit district shall 
    not exceed 15 percent of the outstanding loans of all associations 
    in the district at the end of the preceding fiscal year.

                           (3) Rural areas

        For rural housing purposes under this section the term ``rural 
    areas'' shall not be defined to include any city or village having a 
    population in excess of 2,500 inhabitants.

                            (4) Equipment

        Each association may own and lease, or lease with option to 
    purchase, to stockholders of the association equipment needed in the 
    operations of the stockholder.

(c) Interest rates and charges

                           (1) In general

        Loans authorized in subsection (a) of this section shall bear 
    such rate or rates of interest as are determined under standards 
    prescribed by the board of the bank subject to the provisions of 
    section 2205 of this title, and shall be made upon such terms, 
    conditions, and upon such security, if any, as shall be authorized 
    in such standards.

                        (2) Setting of rates

        In setting rates and charges, it shall be the objective to 
    provide the types of credit needed by eligible borrowers, at the 
    lowest reasonable cost on a sound business basis, taking into 
    account the cost of money to the association, necessary reserves and 
    expenses of the association, and services provided to borrowers and 
    members.

                          (3) Varying rates

        The loan documents may provide for the interest rate or rates to 
    vary from time to time during the repayment period of the loan in 
    accordance with the rate or rates currently being charged by the 
    association.

                         (4) Prior approval

        Such standards may require prior approval of the bank on certain 
    classes of loans, and may authorize a continuing commitment to a 
    borrower of a line of credit.

(d) Special district rule

      (1) Provision of credit and technical assistance outside 
                              service territory

        Notwithstanding any territorial limitation in the charter of a 
    production credit association located in a district in which there 
    are only two such associations, the Farm Credit Administration 
    Board, on request of such association, may permit such association 
    to provide credit and technical assistance to any borrower who is 
    denied credit by the other production credit association in the 
    district if the Board determines that such other production credit 
    association in the district is unduly restrictive in the application 
    of credit standards.

                     (2) Timing of determination

        If the Farm Credit Administration Board approves the extension 
    of credit and technical assistance under paragraph (1), the 
    association shall approve or deny the application for credit within 
    90 days after receipt of the application from the borrower.

(Pub. L. 92-181, title II, Sec. 2.4, as added Pub. L. 100-233, title IV, 
Sec. 401, Jan. 6, 1988, 101 Stat. 1632; amended Pub. L. 100-399, title 
IV, Sec. 401(p), (q), Aug. 17, 1988, 102 Stat. 997; Pub. L. 101-624, 
title XVIII, Sec. 1832(b), Nov. 28, 1990, 104 Stat. 3832.)


                            Prior Provisions

    A prior section 2075, Pub. L. 92-181, title II, Sec. 2.4, Dec. 10, 
1971, 85 Stat. 594; Pub. L. 95-443, Oct. 10, 1978, 92 Stat. 1066; Pub. 
L. 96-592, title II, Sec. 204, Dec. 24, 1980, 94 Stat. 3441; Pub. L. 99-
509, title I, Sec. 1033(b), Oct. 21, 1986, 100 Stat. 1877, related to 
terms, prior to the general amendment of this subchapter by Pub. L. 100-
233, Sec. 401.


                               Amendments

    1990--Subsec. (a)(1). Pub. L. 101-624 substituted ``some portion of 
the total processing or marketing for which financing is extended, 
except that the aggregate of the financing provided by any association 
for basic processing and marketing directly related to the operations of 
farmers, ranchers, and producers or harvesters of aquatic products, if 
the operations of the applicant supply less than 20 percent of the total 
processing or marketing for which financing is extended, shall not 
exceed 15 percent of the total of all outstanding loans of all 
associations in the district at the end of its preceding fiscal year'' 
for ``at least 20 percent, or such larger percent as is required by the 
supervising bank under regulations of the Farm Credit Administration, of 
the total processing or marketing for which financing is extended''.
    1988--Subsec. (b)(1). Pub. L. 100-399, Sec. 401(p), substituted 
``this part'' for ``this subchapter'' and substituted ``or planned'' for 
``planned''.
    Subsec. (d). Pub. L. 100-399, Sec. 401(q), added subsec. (d).


                    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.

                  Section Referred to in Other Sections

    This section is referred to in section 2206a of this title.
