
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: 12USC2122]

 
                       TITLE 12--BANKS AND BANKING
 
                     CHAPTER 23--FARM CREDIT SYSTEM
 
                 SUBCHAPTER III--BANKS FOR COOPERATIVES
 
                     Part A--Banks for Cooperatives
 
Sec. 2122. Corporate existence; general corporate powers

    Each bank for cooperatives shall be a body corporate and, subject to 
regulation by the Farm Credit Administration, shall have power to--
    (1) Adopt and use a corporate seal.
    (2) Have succession until dissolved under the provisions of this 
chapter or other Act of Congress.
    (3) Make contracts.
    (4) Sue and be sued.
    (5) Acquire, hold, dispose, and otherwise exercise all of the usual 
incidents of ownership of real and personal property necessary or 
convenient to its business.
    (6) Make loans and commitments for credit, provide services and 
other assistance as authorized in this chapter, and charge fees 
therefor.
    (7) Operate under the direction of its board of directors.
    (8) Elect by its board of directors a president, any vice 
presidents, a secretary, a treasurer, and provide for such other 
officers, employees, and agents as may be necessary, including joint 
employees as provided in this chapter, define their duties and require 
surety bonds or make other provisions against losses occasioned by 
employees.
    (9) Prescribe by its board of directors its bylaws not inconsistent 
with law providing for the classes of its stock and the manner in which 
its stock shall be issued, transferred, and retired; its officers, 
employees, or agents elected or provided for; its property acquired, 
held, and transferred; its loans made; its general business conducted; 
and the privileges granted it by law exercised and enjoyed.
    (10) Borrow money and issue notes, bonds, debentures, or other 
obligations individually or in concert with one or more other banks of 
the System, of such character, and such terms, conditions, and rates of 
interest as may be determined.
    (11)(A) Participate in loans under this subchapter with one or more 
other banks for cooperatives and with commercial banks and other 
financial institutions upon such terms as may be agreed among them, and 
participate with one or more other Farm Credit System institutions in 
loans made under this subchapter or other subchapters of this chapter on 
the basis prescribed in section 2206 of this title.
    (B)(i) Participate in any loan of a type otherwise authorized under 
this subchapter that is made to a similar entity by any institution in 
the business of extending credit, including purchases of participations 
in loans to finance international trade transactions involving the sale 
of agricultural commodities or the products thereof, except that--
        (I) a bank for cooperatives may not participate in a loan--
            (aa) if the participation would cause the total amount of 
        all loan participations by the bank under this subparagraph 
        involving a single credit risk to exceed 10 percent of the 
        bank's total capital; or
            (bb) if the participation by the bank will itself equal or 
        exceed 50 percent of the principal of the loan or, when taken 
        together with participations in the loan by other Farm Credit 
        System institutions, will cause the cumulative amount of the 
        participations by all Farm Credit System institutions in the 
        loan to equal or exceed 50 percent of the principal of the loan;

        (II) a bank for cooperatives may not participate in a loan to a 
    similar entity under this subparagraph if the similar entity has a 
    loan or loan commitment outstanding with a Farm Credit Bank or an 
    association chartered under this chapter, unless agreed to by the 
    Bank or association; and
        (III) the cumulative amount of participations that a bank for 
    cooperatives may have outstanding under this subparagraph at any 
    time may not exceed 15 percent of the bank's total assets.

    (ii) As used in this subparagraph, the term ``similar entity'' means 
an entity that, while not eligible for a loan under section 2129 of this 
title, is functionally similar to an entity eligible for a loan under 
section 2129 of this title in that it derives a majority of its income 
from, or has a majority of its assets invested in, the conduct of 
activities functionally similar to those conducted by the entity.
    (iii) With respect to similar entities that are eligible to borrow 
from a Farm Credit Bank or association under subchapter I or II of this 
chapter, the authority of a bank for cooperatives to participate in 
loans to the entities under this subparagraph shall be subject to the 
prior approval of the Farm Credit Bank or Banks in whose chartered 
territory the entity is eligible to borrow. The approval may be granted 
on an annual basis and under such terms and conditions as may be agreed 
on between the bank for cooperatives and the Farm Credit Bank or Banks 
that serve the territory.
    (iv) As used in this subparagraph, the term ``participate'' or 
``participation'' refers to multilender transactions, including 
syndications, assignments, loan participations, subparticipations, or 
other forms of the purchase, sale, or transfer of interests in loans, 
other extensions of credit, or other technical and financial assistance.
    (12) Deposit its securities and its current funds with any member 
bank of the Federal Reserve System or any insured State nonmember bank 
(within the meaning of section 1813 of this title) or, to the extent 
necessary to facilitate transactions which may be financed under section 
2128(b) of this title, any other financial organization, domestic or 
foreign, as may be authorized by its board of directors, and pay fees 
therefor and receive interest thereon as may be agreed. When designated 
for that purpose by the Secretary of the Treasury, it shall be a 
depository of public money, except receipts from customs, under such 
regulations as may be prescribed by the Secretary; may be employed as a 
fiscal agent of the Government, and shall perform all such reasonable 
duties as a depository of public money or financial agent of the 
Government as may be required of it. No Government funds deposited under 
the provisions of this subsection shall be invested in loans or bonds or 
other obligations of the bank.
    (13)(A) Buy and sell obligations of or insured by the United States 
or of any agency thereof, or securities backed by the full faith and 
credit of any such agency and make such other investments as may be 
authorized under regulations issued by the Farm Credit Administration.
    (B) As may be authorized by its board of directors, buy from and 
sell to Farm Credit System institutions interests in loans and in other 
financial assistance extended and nonvoting stock.
    (C) As may be authorized by its board of directors, and solely for 
the purposes of obtaining credit information and other services needed 
to facilitate transactions which may be financed under section 2128(b) 
of this title, invest in ownership interests in foreign business 
entities that are principally engaged in providing credit information to 
and performing such servicing functions for their members in connection 
with the members' international activities.
    (14) Conduct studies and adopt standards for lending.
    (15) Amend and modify loan contracts, documents, and payment 
schedules, and release, subordinate, or substitute security for any of 
them.
    (16) Exercise by its board of directors or authorized officers, 
employees, or agents all such incidental powers as may be necessary or 
expedient to carry on the business of the bank.
    (17) As may be authorized by the board of directors, maintain credit 
balances and pay or receive fees or interest thereon, for the purpose of 
assisting in the transfer of funds to or from parties to transactions 
that may be financed under section 2128(b) of this title: Provided, 
however, That nothing herein shall authorize the banks for cooperatives 
to engage in the business of accepting domestic deposits.
    (18) As may be authorized by its board of directors, agree with 
other Farm Credit System institutions to share loan or other losses, 
whether to protect against capital impairment or for any other purpose.

(Pub. L. 92-181, title III, Sec. 3.1, Dec. 10, 1971, 85 Stat. 602; Pub. 
L. 96-592, title III, Sec. 301, Dec. 24, 1980, 94 Stat. 3443; Pub. L. 
99-205, title II, Sec. 205(e)(1), Dec. 23, 1985, 99 Stat. 1705; Pub. L. 
100-233, title VIII, Sec. 802(n), Jan. 6, 1988, 101 Stat. 1712; Pub. L. 
100-399, title IX, Sec. 901(b), Aug. 17, 1988, 102 Stat. 1007; Pub. L. 
102-552, title V, Sec. 502, Oct. 28, 1992, 106 Stat. 4130; Pub. L. 103-
376, Secs. 2, 6, Oct. 19, 1994, 108 Stat. 3497, 3500.)


                               Amendments

    1994--Par. (11)(B)(i)(I)(bb). Pub. L. 103-376, Sec. 6, substituted 
``other Farm Credit System institutions'' for ``the other banks for 
cooperatives under this subparagraph'' and ``all Farm Credit System 
institutions'' for ``all banks for cooperatives''.
    Par. (11)(B)(iv). Pub. L. 103-376, Sec. 2, added cl. (iv).
    1992--Par. (11). Pub. L. 102-552 designated existing provisions as 
subpar. (A) and added subpar. (B).
    1988--Par. (12). Pub. L. 100-399 substituted ``(within the meaning 
of section 1813 of this title)'' for ``as defined in section 1812 of 
this title.''
    Pars. (12), (13)(B), (C), (17), (18). Pub. L. 100-233 struck out 
``and approved by the Farm Credit Administration'' after ``board of 
directors''.
    1985--Pub. L. 99-205 substituted ``regulation'' for ``supervision'' 
in provision preceding par. (1).
    Par. (13)(A). Pub. L. 99-205 inserted ``under regulations issued'' 
after ``authorized''.
    Pars. (16) to (19). Pub. L. 99-205 struck out par. (16) respecting 
power of bank for cooperatives to perform any function delegated to it 
by the Farm Credit Administration, and redesignated pars. (17) to (19) 
as (16) to (18), respectively.
    1980--Par. (11). Pub. L. 96-592, Sec. 301(1), inserted provisions 
respecting participation with one or more other Farm Credit System 
institutions in loans.
    Par. (12). Pub. L. 96-592, Sec. 301(2), inserted applicability to 
any insured State nonmember bank and to other domestic or foreign 
financial organizations.
    Par. (13). Pub. L. 96-592, Sec. 301(3), designated existing 
provisions as subpar. (A) and added subpars. (B) and (C).
    Pars. (18), (19). Pub. L. 96-592, Sec. 301(4), added pars. (18) and 
(19).


                    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.


                    Effective Date of 1985 Amendment

    Amendment by Pub. L. 99-205 effective thirty days after Dec. 23, 
1985, see section 401 of Pub. L. 99-205, set out as a note under section 
2001 of this title.
