
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 12USC2129]

 
                       TITLE 12--BANKS AND BANKING
 
                     CHAPTER 23--FARM CREDIT SYSTEM
 
                 SUBCHAPTER III--BANKS FOR COOPERATIVES
 
                     Part A--Banks for Cooperatives
 
Sec. 2129. Eligibility

    (a) Any association of farmers, producers or harvesters of aquatic 
products, or any federation of such associations, which is operated on a 
cooperative basis, and has the powers for processing, preparing for 
market, handling, or marketing farm or aquatic products; or for 
purchasing, testing, grading, processing, distributing, or furnishing 
farm or aquatic supplies or furnishing farm or aquatic business services 
or services to eligible cooperatives and conforms to either of the two 
following requirements:
        (1) no member of the association is allowed more than one vote 
    because of the amount of stock or membership capital he may own 
    therein; or
        (2) does not pay dividends on stock or membership capital in 
    excess of such per centum per annum as may be approved under 
    regulations of the Farm Credit Administration; and in any case
        (3) does not deal in farm products or aquatic products, or 
    products processed therefrom, farm or aquatic supplies, farm or 
    aquatic business services, or services to eligible cooperatives with 
    or for nonmembers in an amount greater in value than the total 
    amount of such business transacted by it with or for members, 
    excluding from the total of member and nonmember business 
    transactions with the United States or any agency or instrumentality 
    thereof or services or supplies furnished as a public utility; and
        (4) a percentage of the voting control of the association not 
    less than 80 per centum (60 per centum (A) in the case of rural 
    electric, telephone, public utility, and service cooperatives; (B) 
    in the case of local farm supply cooperatives that have historically 
    served needs of the community that would not adequately be served by 
    other suppliers and have experienced a reduction in the percentage 
    of farmer membership due to changed circumstances beyond their 
    control such as, but not limited to, urbanization of the community; 
    and (C) in the case of local farm supply cooperatives that provide 
    or will provide needed services to a community and that are or will 
    be in competition with a cooperative specified in paragraph (B)) or, 
    with respect to any type of association or cooperative, such higher 
    percentage as established by the bank board, is held by farmers, 
    producers or harvesters of aquatic products, or eligible cooperative 
    associations as defined herein;

shall be eligible to borrow from a bank for cooperatives. Any such 
association that has received a loan from a bank for cooperatives shall, 
without regard to the requirements of paragraphs (1) through (4), 
continue to be eligible for so long as more than 50 percent (or such 
higher percentage as is established by the bank board) of the voting 
control of the association is held by farmers, producers or harvesters 
of aquatic products, or eligible cooperative associations.
    (b) Notwithstanding any other provision of this section:
        (1) The following entities shall also be eligible to borrow from 
    a bank for cooperatives:
            (A) Cooperatives and other entities that have received a 
        loan, loan commitment, or loan guarantee from the Rural 
        Electrification Administration, or a loan or loan commitment 
        from the Rural Telephone Bank, or that are eligible under the 
        Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.) for a 
        loan, loan commitment, or loan guarantee from the Administration 
        or the Bank (or a successor of the Administration or the Bank), 
        and subsidiaries of such cooperatives or other entities.
            (B) Any legal entity that (i) holds more than 50 percent of 
        the voting control of an association or other entity that is 
        eligible to borrow from a bank for cooperatives under subsection 
        (a) of this section or subparagraph (A) of this paragraph, and 
        (ii) borrows for the purpose of making funds available to that 
        association or entity, and makes funds available to that 
        association or entity under the same terms and conditions that 
        the funds are borrowed from a bank for cooperatives.
            (C) Any cooperative or other entity described in subsection 
        (b) or (f) of section 2128 of this title.
            (D) Any creditworthy private entity that satisfies the 
        requirements for a service cooperative under paragraphs (1), 
        (2), and (4), or under the last sentence, of subsection (a) of 
        this section and subsidiaries of the entity, if the entity is 
        organized to benefit agriculture in furtherance of the welfare 
        of its farmer-members and is operated on a not-for-profit basis.

        (2) Notwithstanding the provisions of section 2130 of this 
    title, the board of directors of a bank for cooperatives may 
    determine that, with respect to a loan to any borrower eligible to 
    borrow from a bank under paragraph (1)(A) that is fully guaranteed 
    by the United States, no stock purchase requirement shall apply, 
    other than the requirement that a borrower eligible to own voting 
    stock shall purchase one share of such stock.
        (3) Each association and other entity eligible to borrow from a 
    bank for cooperatives under this subsection, for purposes of section 
    2128(a) of this title, shall be treated as an eligible cooperative 
    association and a stockholder eligible to borrow from the bank.
        (4) Nothing in this subsection shall be construed to adversely 
    affect the eligibility, as it existed on January 6, 1988, of 
    cooperatives and other entities for any other credit assistance 
    under Federal law.

(Pub. L. 92-181, title III, Sec. 3.8, Dec. 10, 1971, 85 Stat. 605; Pub. 
L. 94-184, Sec. 1(a), Dec. 31, 1975, 89 Stat. 1060; Pub. L. 96-592, 
title III, Sec. 305, Dec. 24, 1980, 94 Stat. 3445; Pub. L. 99-198, title 
XIII, Sec. 1322, Dec. 23, 1985, 99 Stat. 1534; Pub. L. 100-233, title 
IV, Sec. 421, title VIII, Sec. 805(m), Jan. 6, 1988, 101 Stat. 1654, 
1715; Pub. L. 100-399, title IV, Sec. 410, title IX, Sec. 901(e), Aug. 
17, 1988, 102 Stat. 1003, 1007; Pub. L. 101-624, title XXIII, 
Sec. 2323(b), Nov. 28, 1990, 104 Stat. 4013; Pub. L. 102-237, title V, 
Sec. 502(e)(2), (f), Dec. 13, 1991, 105 Stat. 1869; Pub. L. 102-552, 
title V, Sec. 506, Oct. 28, 1992, 106 Stat. 4131; Pub. L. 103-376, 
Sec. 4, Oct. 19, 1994, 108 Stat. 3498; Pub. L. 104-105, title II, 
Secs. 204, 205, Feb. 10, 1996, 110 Stat. 172.)

                       References in Text

    The Rural Electrification Act of 1936, referred to in subsec. 
(b)(1)(A), is act May 20, 1936, ch. 432, 49 Stat. 1363, as amended, 
which is classified generally to chapter 31 (Sec. 901 et seq.) of Title 
7, Agriculture. For complete classification of this Act to the Code, see 
section 901 of Title 7 and Tables.


                               Amendments

    1996--Subsec. (a). Pub. L. 104-105, Sec. 204(a), inserted at end 
``Any such association that has received a loan from a bank for 
cooperatives shall, without regard to the requirements of paragraphs (1) 
through (4), continue to be eligible for so long as more than 50 percent 
(or such higher percentage as is established by the bank board) of the 
voting control of the association is held by farmers, producers or 
harvesters of aquatic products, or eligible cooperative associations.''
    Subsec. (b)(1)(A). Pub. L. 104-105, Sec. 205, substituted ``are 
eligible under the Rural Electrification Act of 1936 (7 U.S.C. 901 et 
seq.) for'' for ``have been certified by the Administrator of the Rural 
Electrification Administration to be eligible for such'' and ``loan 
guarantee from the Administration or the Bank (or a successor of the 
Administration or the Bank), and'' for ``loan guarantee, and''.
    Subsec. (b)(1)(D). Pub. L. 104-105, Sec. 204(b), substituted ``and 
(4), or under the last sentence, of subsection (a) of this section'' for 
``and (4) of subsection (a) of this section''.
    1994--Subsec. (b)(1)(B) to (E). Pub. L. 103-376 redesignated 
subpars. (C) to (E) as (B) to (D), respectively, realigned margin of 
subpar. (D), and struck out former subpar. (B) which read as follows: 
``Any legal entity more than 50 percent of the voting control of which 
is held by one or more associations or other entities that are eligible 
to borrow from a bank for cooperatives under subsection (a) of this 
section or subparagraph (A) of this paragraph, except that any such 
legal entity, when considered together with one or more such 
associations or other entities that hold such control, meet the 
requirement of subsection (a)(3) of this section.''
    1992--Subsec. (b)(1)(E). Pub. L. 102-552 added subpar. (E).
    1991--Subsec. (a)(4). Pub. L. 102-237, Sec. 502(f)(1), substituted 
``a percentage'' for ``A percentage''.
    Subsec. (b)(1)(D). Pub. L. 102-237, Sec. 502(e)(2), (f)(2), 
substituted ``subsection (b) or (f) of section 2128 of this title'' for 
``section 2128(f) of this title'' and realigned margin of subpar. (D).
    1990--Subsec. (b)(1)(D). Pub. L. 101-624 added subpar. (D).
    1988--Pub. L. 100-399, Sec. 901(e), substituted ``bank board'' for 
``district board'' in subsec. (a)(4).
    Pub. L. 100-399, Sec. 410, substituted ``makes'' for ``make'' in 
subsec. (b)(1)(C).
    Pub. L. 100-233, Sec. 805(m), redesignated subsec. (1) as subsec. 
(a) and pars. (a) to (d) as pars. (1) to (4), respectively, in par. (4) 
redesignated cls. (1) to (3) as (A) to (C), respectively, and in cl. (C) 
substituted ``paragraph (B)'' for ``paragraph (2)''.
    Pub. L. 100-233, Sec. 421, added subsec. (b) and struck out former 
subsec. (2) which read as follows: ``Notwithstanding any other provision 
of this subchapter, cooperatives and other entities that have received a 
loan, loan commitment, or loan guarantee from the Rural Electrification 
Administration, or a loan or loan commitment from the Rural Telephone 
Bank, or that have been certified by the Administrator of the Rural 
Electrification Administration to be eligible for such a loan, loan 
commitment, or loan guarantee, and subsidiaries of such cooperatives or 
other entities, shall also be eligible to borrow from a bank for 
cooperatives.''
    1985--Pub. L. 99-198, Sec. 1322(1), designated existing provisions 
as subsec. (1) and added subsec. (2).
    1980--Pub. L. 96-592, Sec. 305(1), inserted reference to aquatic 
business in introductory text.
    Subsec. (c). Pub. L. 96-592, Sec. 305(2), inserted reference to 
aquatic business services or services to eligible cooperatives.
    Subsec. (d). Pub. L. 96-592, Sec. 305(3), substituted ``60'' for 
``70'', and designated former parenthetical material as item (1), and 
added items (2) and (3) and limitation with respect to any type of 
association or cooperative.
    1975--Subsec. (d). Pub. L. 94-184 inserted provision relating to 70 
per centum of voting control in the case of rural electric, telephone, 
and public utility cooperatives.


                    Effective Date of 1991 Amendment

    Amendment by section 502(f) of 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 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.

                  Section Referred to in Other Sections

    This section is referred to in sections 2122, 2128 of this title.
