
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: 12USC2121]

 
                       TITLE 12--BANKS AND BANKING
 
                     CHAPTER 23--FARM CREDIT SYSTEM
 
                 SUBCHAPTER III--BANKS FOR COOPERATIVES
 
                     Part A--Banks for Cooperatives
 
Sec. 2121. Establishment; titles; branches

    The banks for cooperatives established pursuant to sections 2 and 30 
of the Farm Credit Act of 1933, as amended, shall continue as federally 
chartered instrumentalities of the United States. The Farm Credit 
Administration shall approve amendments consistent with this chapter to 
charters and organizational certificates of banks for cooperatives. 
Unless an existing bank for cooperatives is merged with another bank, 
there shall be a bank for cooperatives in each farm credit district and 
a Central Bank for Cooperatives. A bank for cooperatives may include in 
its title the name of the city in which it is located or other 
geographical designation. The Central Bank for Cooperatives may be 
located in such place as its board of directors may determine with the 
approval of the Farm Credit Administration. When authorized by the Farm 
Credit Administration each bank for cooperatives may establish such 
branches or other offices as may be appropriate for the effective 
operation of its business.

(Pub. L. 92-181, title III, Sec. 3.0, Dec. 10, 1971, 85 Stat. 602; Pub. 
L. 100-233, title IV, Sec. 414(b), title VIII, Sec. 802(m), Jan. 6, 
1988, 101 Stat. 1641, 1711; Pub. L. 100-399, title IV, Sec. 406(b), 
title IX, Sec. 901(c), Aug. 17, 1988, 102 Stat. 1000, 1007.)

                       References in Text

    Sections 2 and 30 of the Farm Credit Act of 1933, as amended, 
referred to in text, were classified to sections 1134 and 1134f, 
respectively, of this title prior to their repeal by section 5.26 of 
Pub. L. 92-181, which enacted this chapter.


                               Amendments

    1988--Pub. L. 100-399, Sec. 901(c), substituted ``merged with 
another bank'' for ``merged with one or more other such banks under 
section 2181 of this title''.
    Pub. L. 100-233, Sec. 802(m), substituted ``The Farm Credit 
Administration shall approve amendments consistent with this chapter to 
charters and organizational certificates of banks for cooperatives'' for 
``Their charters or organization certificates may be modified from time 
to time by the Farm Credit Administration, not inconsistent with the 
provisions of this subchapter, as may be necessary or expedient to 
implement this chapter''.
    Pub. L. 100-233, Sec. 414(b), which designated existing provisions 
as subsec. (a), and added subsec. (b) reading ``Each bank for 
cooperatives shall elect from its voting stockholders 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 
institution.'', was repealed by section 406(b) of Pub. L. 100-399. See 
Construction of 1988 Amendment note below.


                    Effective Date of 1988 Amendment

    Amendment by Pub. L. 100-399 effective as if enacted immediately 
after enactment of Pub. L. 100-233, which was approved Jan. 6, 1988, see 
section 1001(a) of Pub. L. 100-399, set out as a note under section 2002 
of this title.


                     Construction of 1988 Amendment

    Section 406(b) of Pub. L. 100-399 provided that section 414(b) of 
Pub. L. 100-233, cited as a credit to this section, is repealed and that 
the Agricultural Credit Act of 1987 (Pub. L. 100-233) and this chapter 
shall be applied and administered as if such section had not been 
enacted.


               Voluntary Merger of Banks for Cooperatives

    Section 413 of Pub. L. 100-233, as amended by Pub. L. 100-399, title 
IV, Sec. 405, Aug. 17, 1988, 102 Stat. 1000, provided that:
    ``(a) Submission of Proposal.--
        ``(1) Special committee.--
            ``(A) In general.--Not later than 15 days after the date of 
        the enactment of this section [Jan. 6, 1988], a special 
        committee shall be selected pursuant to subparagraph (B), for 
        the purpose of developing a proposal for the voluntary merger of 
        the banks for cooperatives.
            ``(B) Composition.--The special committee selected under 
        subparagraph (A) shall be composed of--
                ``(i) one member of each district board elected by the 
            voting stockholders of the bank for cooperatives in the 
            district; and
                ``(ii) one member chosen from the board of directors of 
            the Central Bank for Cooperatives by the board of such Bank.
            ``(C) Development of plan.--Not later than 75 days after the 
        date of the enactment of this section [Jan. 6, 1988], the 
        special committee shall develop a plan of merger for all such 
        banks and the Central Bank for Cooperatives into a National Bank 
        for Cooperatives.
        ``(2) Prerequisites to merger.--
            ``(A) Submission to fca.--On completion of the plan of 
        merger pursuant to paragraph (1)(C), the special committee shall 
        submit the proposed plan, together with all information that is 
        to be distributed to the stockholders concerning such plan, to 
        the Farm Credit Administration for approval.
            ``(B) Expedited review.--Not later than 30 days after the 
        Farm Credit Administration receives the plan of merger, the 
        Administration shall promptly review such plan and advise the 
        special committee concerning any required changes that are 
        necessary to the plan.
        ``(3) Submission to stockholders.--On approval of the plan by 
    the Farm Credit Administration, the special committee shall, under 
    such procedures as may be established by the committee, submit the 
    plan and recommendations to all voting stockholders of the district 
    banks for cooperatives and the Central Bank for Cooperatives.
    ``(b) Voting Requirements.--
        ``(1) Majority vote required.--An approval of the plan of merger 
    developed and submitted under subsection (a) shall--
            ``(A) require a majority vote of the stockholders of each 
        district bank for cooperatives voting, in person or by proxy, at 
        a duly authorized stockholders' meeting, computed both--
                ``(i) in accordance with the requirement that, except as 
            provided in section 3.3(d) [12 U.S.C. 2124(d)], each 
            cooperative that is the holder of voting stock in the bank 
            for cooperatives shall be entitled to cast one vote; and
                ``(ii) on the basis of the total equity interests in the 
            bank (including allocated, but not unallocated, surplus and 
            reserves) held by such stockholders;
            ``(B) require a majority vote of the voting stockholders of 
        the Central Bank for Cooperatives voting on a one-bank-one-vote 
        basis;
            ``(C) take place not later than 180 days after the date of 
        the enactment of this section [Jan. 6, 1988]; and
            ``(D) take place prior to any other merger vote involving a 
        bank for cooperatives.
        ``(2) Approval by all banks for cooperatives.--If the 
    stockholders of all of the banks for cooperatives approve the 
    merger, the merger shall take place.
        ``(3) Effect of lesser vote.--If the stockholders of more than 
    one but fewer than all of the banks approve the plan, each such bank 
    whose stockholders voted to approve the merger shall be merged into 
    a single bank for cooperatives, as provided in paragraphs (4) or 
    (5).
        ``(4) National bank for cooperatives.--
            ``(A) Creation.--If the stockholders of eight or more of the 
        district banks for cooperatives approve the merger, such banks, 
        and the Central Bank for Cooperatives, shall be merged into a 
        single bank, which shall be referred to as the `National Bank 
        for Cooperatives'.
            ``(B) Services provided.--The National Bank for Cooperatives 
        may offer credit and related services to eligible borrowers 
        located within any territory that may be served by Farm Credit 
        System institutions under section 5.0 [12 U.S.C. 2221], or to 
        any borrower otherwise eligible under section 3.7(b) [12 U.S.C. 
        2128(b)].
        ``(5) United Bank for Cooperatives.--
            ``(A) Creation.--If the stockholders of more than one but 
        fewer than eight of the district banks approve the plan, each 
        such bank, and the Central Bank for Cooperatives (if approved by 
        a numerical majority of its stockholders), shall be merged into 
        a single bank, which shall be referred to as the `United Bank 
        for Cooperatives'.
            ``(B) Services provided.--The United Bank for Cooperatives 
        shall offer credit and related services only in the territory 
        included, as of the date of the enactment of this section [Jan. 
        6, 1988], within the boundaries of the districts that had been 
        served by the constituent banks of the United Bank for 
        Cooperatives, and to any borrower otherwise eligible under 
        section 3.7(b) [12 U.S.C. 2128(b)].
        ``(6) Nonconsenting banks.--
            ``(A) In general.--
                ``(i) National bank for cooperatives.--Any of the 
            district banks whose stockholders did not approve the plan 
            of merger may offer credit and related services to any 
            eligible borrowers within any territory or area that may be 
            served by the National Bank.
                ``(ii) United bank for cooperatives.--Any of the 
            district banks whose stockholders did not approve the plan 
            of merger shall continue as district banks for cooperatives 
            and shall continue to serve only the territory within the 
            boundaries of the district that such banks served as of the 
            date of the enactment of this section [Jan. 6, 1988].
            ``(B) Nondiscrimination.--Any district bank whose 
        stockholders did not approve the plan of merger shall be 
        entitled to the availability, from the National Bank for 
        Cooperatives or the United Bank for Cooperatives, as the case 
        may be, of the same credit and related services now provided by 
        the Central Bank for Cooperatives as of the date of the 
        enactment of this section [Jan. 6, 1988], regardless of the 
        decision not to merge.
            ``(C) Subsequent mergers.--Any district bank referred to in 
        subparagraph (A) may subsequently merge with the National Bank 
        for Cooperatives or the United Bank for Cooperatives, as the 
        case may be, on the approval of the voting stockholders of both 
        banks proposing to merge based on the voting requirement of 
        subsection (b)(1).
    ``(c) References.--References in this section to voting stockholders 
shall include subscribers to the guaranty fund.''


            Bank for Cooperatives Initial Board of Directors

    Section 414(a) of Pub. L. 100-233, as amended by Pub. L. 100-399, 
title IV, Sec. 406(a), Aug. 17, 1988, 102 Stat. 1000, provided that: 
``Notwithstanding section 3.2 [probably means section 3.2 of Pub. L. 92-
181, 12 U.S.C. 2123], the initial board of each district bank for 
cooperatives shall be composed of the members of the district board 
(which is dissolved upon the creation of the district Farm Credit Bank) 
elected by the stockholders of the bank for cooperatives and one member 
elected by the other two members, which member shall not be a director, 
officer, employee, or stockholder of a System institution. The 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 section 3.0 of 
the Farm Credit Act of 1971 [12 U.S.C. 2121].''

                  Section Referred to in Other Sections

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