
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: 12USC2128]

 
                       TITLE 12--BANKS AND BANKING
 
                     CHAPTER 23--FARM CREDIT SYSTEM
 
                 SUBCHAPTER III--BANKS FOR COOPERATIVES
 
                     Part A--Banks for Cooperatives
 
Sec. 2128. Loans, commitments, and technical and financial 
        assistance
        

(a) Authorities

    The banks for cooperatives are authorized to make loans and 
commitments to eligible cooperative associations and to extend to them 
other technical and financial assistance at any time (whether or not 
they have a loan from the bank outstanding), including but not limited 
to discounting notes and other obligations, guarantees, currency 
exchange necessary to service individual transactions that may be 
financed under subsection (b) of this section, collateral custody, or 
participation with other banks for cooperatives and commercial banks or 
other financial institutions in loans to eligible cooperatives, under 
such terms and conditions as may be determined to be feasible by the 
board of directors of each bank for cooperatives under regulations of 
the Farm Credit Administration. Such regulations may include provisions 
for avoiding duplication between the Central Bank and district banks for 
cooperatives. Each bank may own and lease, or lease with option to 
purchase, to stockholders eligible to borrow from the bank equipment 
needed in the operations of the stockholder and may make or participate 
in loans or commitments and extend other technical and financial 
assistance to other domestic parties for the acquisition of equipment 
and facilities to be leased to such stockholders for use in their 
operations in the United States.

(b) Additional authorities

    (1) A bank for cooperatives is authorized to make or participate in 
loans and commitments to, and to extend other technical and financial 
assistance to a domestic or foreign party with respect to its 
transactions with an association that is a voting stockholder of the 
bank for the import of agricultural commodities or products thereof, 
farm supplies, or aquatic products through purchases, sales or 
exchanges, if the bank for cooperatives determines, under regulations of 
the Farm Credit Administration, that the voting stockholder will benefit 
substantially as a result of such loan, commitment, or assistance.
    (2)(A) A bank for cooperatives may make or participate in loans and 
commitments to, and extend other technical and financial assistance to--
        (i) any domestic or foreign party for the export, including 
    (where applicable) the cost of freight, of agricultural commodities 
    or products thereof, farm supplies, or aquatic products from the 
    United States under policies and procedures established by the bank 
    to ensure that the commodities, products, or supplies are originally 
    sourced, where reasonably available, from one or more eligible 
    cooperative associations described in section 2129(a) of this title 
    on a priority basis, except that if the total amount of the balances 
    outstanding on loans made by a bank under this clause that--
            (I) are made to finance the export of commodities, products, 
        or supplies that are not originally sourced from a cooperative, 
        and
            (II) are not guaranteed or insured, in an amount equal to at 
        least 95 percent of the amount loaned, by a department, agency, 
        bureau, board, commission, or establishment of the United States 
        or a corporation wholly-owned directly or indirectly by the 
        United States,

    exceeds an amount that is equal to 50 percent of the bank's capital, 
    then a sufficient interest in the loans shall be sold by the bank 
    for cooperatives to commercial banks and other non-System lenders to 
    reduce the total amount of such outstanding balances to an amount 
    not greater than an amount equal to 50 percent of the bank's 
    capital; and
        (ii) except as provided in subparagraph (B), any domestic or 
    foreign party in which an eligible cooperative association described 
    in section 2129(a) of this title (including, for the purpose of 
    facilitating its domestic business operations only, a cooperative or 
    other entity described in section 2129(b)(1)(A) of this title) has 
    an ownership interest, for the purpose of facilitating the domestic 
    or foreign business operations of the association, except that if 
    the ownership interest by an eligible cooperative association, or 
    associations, is less than 50 percent, the financing shall be 
    limited to the percentage held in the party by the association or 
    associations.

    (B) A bank for cooperatives shall not use the authority provided in 
subparagraph (A)(ii) to provide financial assistance to a party for the 
purpose of financing the relocation of a plant or facility from the 
United States to another country.
    (3) A bank for cooperatives is authorized to provide such services 
as may be customary and normal in maintaining relationships with 
domestic or foreign entities to facilitate the activities specified in 
paragraphs (1) and (2), consistent with this chapter.

(c) Applicable policies

    Loans, commitments, and assistance authorized by subsection (b) of 
this section shall be extended in accordance with policies adopted by 
the board of directors of the bank under regulations of the Farm Credit 
Administration.

(d) Regulatory limitations

    The regulations of the Farm Credit Administration implementing 
subsection (b) of this section and other provisions of this subchapter 
relating to the authority under subsection (b) of this section may not 
confer upon the banks for cooperatives powers and authorities greater 
than those specified in this subchapter. The Farm Credit Administration 
shall, during the formulation of such regulations, closely consult on a 
continuing basis with the Board of Governors of the Federal Reserve 
System to insure that such regulations conform to national banking 
policies, objectives, and limitations.

(e) Speculative futures transactions

    Notwithstanding any other provision of this subchapter, the banks 
for cooperatives shall not make or participate in loans or commitments 
for the purpose of financing speculative futures transactions by 
eligible borrowers in foreign currencies.

(f) Installation, expansion, or improvement of water and waste disposal 
        facilities

    The banks for cooperatives may, for the purpose of installing, 
maintaining, expanding, improving, or operating water and waste disposal 
facilities in rural areas, make and participate in loans and commitments 
and extending other technical and financial assistance to--
        (1) cooperatives formed specifically for the purpose of 
    establishing or operating such facilities; and
        (2) public and quasi-public agencies and bodies, and other 
    public and private entities that, under authority of State or local 
    law, establish or operate such facilities.

For purposes of this subsection, the term ``rural area'' means all 
territory of a State that is not within the outer boundary of any city 
or town having a population of more than 20,000 based on the latest 
decennial census of the United States.

(Pub. L. 92-181, title III, Sec. 3.7, Dec. 10, 1971, 85 Stat. 605; Pub. 
L. 96-592, title III, Sec. 304, Dec. 24, 1980, 94 Stat. 3444; Pub. L. 
101-624, title XXIII, Sec. 2323(a), Nov. 28, 1990, 104 Stat. 4013; Pub. 
L. 102-237, title V, Sec. 502(e)(1), Dec. 13, 1991, 105 Stat. 1868; Pub. 
L. 102-552, title V, Secs. 504, 505, Oct. 28, 1992, 106 Stat. 4131; Pub. 
L. 103-376, Sec. 3, Oct. 19, 1994, 108 Stat. 3497.)


                               Amendments

    1994--Subsec. (b)(1). Pub. L. 103-376, Sec. 3(A), substituted 
``assistance to'' for ``assistance to (A)'', ``bank for the import'' for 
``bank for the export or import'', and ``if the bank for cooperatives'' 
for ``and (B) a domestic or foreign party in which such an association 
has at least the minimum ownership interest approved under regulations 
of the Farm Credit Administration for the purpose of facilitating the 
association's export or import operations of the type described in 
subparagraph (A): Provided, That a'' bank for cooperatives''.
    Subsec. (b)(2). Pub. L. 103-376, Sec. 3(B), added par. (2) and 
struck out former par. (2) which read as follows: ``A bank for 
cooperatives is authorized to make or participate in loans and 
commitments, and to extend other technical and financial assistance, to 
any domestic or foreign entity that is eligible for a guarantee or 
insurance as described in subparagraphs (A) and (B) with respect to 
transactions involving the Soviet Union (its successor entities or any 
of the individual republics of the Soviet Union) or an emerging 
democracy (as defined in section 1542(f) of the Food, Agriculture, 
Conservation, and Trade Act of 1990 (7 U.S.C. 5622 note)) for the export 
of agricultural commodities and products thereof from the United States, 
including (where applicable) the cost of freight, if in each case--
        ``(A) the loan involved is unconditionally guaranteed or insured 
    by a department, agency, bureau, board, commission, or establishment 
    of the United States or any corporation wholly owned directly or 
    indirectly by the United States; and
        ``(B) the guarantee or insurance--
            ``(i) covers at least 95 percent of the amount loaned for 
        the purchase of the commodities or products; and
            ``(ii) is issued on or before September 30, 1995.''
    1992--Subsec. (a). Pub. L. 102-552, Sec. 504, inserted ``at any time 
(whether or not they have a loan from the bank outstanding)'' after 
``assistance'' in first sentence.
    Subsec. (f). Pub. L. 102-552, Sec. 505, in introductory provisions, 
substituted ``installing, maintaining, expanding, improving, or 
operating'' for ``the installation, expansion, or improvement of'' and 
``extending'' for ``to extend''.
    1991--Subsec. (b). Pub. L. 102-237 designated existing provisions as 
par. (1), redesignated cl. (1) as (A) and inserted ``or products 
thereof'' after ``commodities'', redesignated cl. (2) as (B) and 
substituted ``subparagraph (A)'' for ``clause (1) of this subsection'', 
and added pars. (2) and (3).
    1990--Subsec. (f). Pub. L. 101-624 added subsec. (f).
    1980--Pub. L. 96-592 designated existing provisions as subsec. (a), 
inserted provisions relating to currency exchanges and provisions 
relating to loans, etc., to domestic parties, and added subsecs. (b) to 
(e).

                  Section Referred to in Other Sections

    This section is referred to in sections 2122, 2129, 2252 of this 
title.
