
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: 12USC2130]

 
                       TITLE 12--BANKS AND BANKING
 
                     CHAPTER 23--FARM CREDIT SYSTEM
 
                 SUBCHAPTER III--BANKS FOR COOPERATIVES
 
                     Part A--Banks for Cooperatives
 
Sec. 2130. Ownership of stock by borrowers

    (a) Each borrower entitled to hold voting stock shall, at the time a 
loan is made by a bank for cooperatives, own at least one share of 
voting stock and shall be required by the bank to invest in additional 
voting stock or nonvoting investment stock at that time, or from time to 
time, as the lending bank may determine, but the requirement for 
investment in stock at the time the loan is closed shall not exceed an 
amount equal to 10 per centum of the face amount of the loan. Such 
additional ownership requirements may be based on the face amount of the 
loan, the outstanding loan balance or on a percentage of the interest 
payable by the borrower during any year or during any quarter thereof, 
or upon such other basis as the bank determines will provide adequate 
capital for the operation of the bank and equitable ownership thereof 
among borrowers. In the case of a direct loan by the Central Bank, the 
borrower shall be required to own or invest in the necessary stock in a 
district bank or banks and such district bank shall be required to own a 
corresponding amount of stock in the Central Bank, but voting stock 
shall be in the one district bank, designated by the Farm Credit 
Administration.
    (b) Notwithstanding the provisions of subsection (a) of this 
section, the purchase of stock need not be required with respect to that 
part of any loan made by a bank for cooperatives which it sells to or 
makes in participation with financial institutions other than any of the 
banks for cooperatives. In such cases the distribution of earnings of 
the bank for cooperatives shall be on the basis of the interest in the 
loan retained by such bank.

(Pub. L. 92-181 title III, Sec. 3.9, Dec. 10, 1971, 85 Stat. 605; Pub. 
L. 96-592, title III, Sec. 306, Dec. 24, 1980, 94 Stat. 3445; Pub. L. 
100-233, title VIII, Sec. 802(q), Jan. 6, 1988, 101 Stat. 1712.)


                               Amendments

    1988--Subsec. (a). Pub. L. 100-233 substituted ``by the bank to 
invest'' for ``by the bank with the approval of the Farm Credit 
Administration to invest'', ``or upon such other basis as the bank 
determines'' for ``or upon such other basis as the bank, with the 
approval of the Farm Credit Administration, determines'', and ``in a 
district bank or banks and such district bank shall be required'' for 
``in a district bank or banks as may be approved by the Farm Credit 
Administration and such district bank shall be required''.
    1980--Subsec. (a). Pub. L. 96-592 inserted provisions respecting 
entitlement to hold voting stock.

                  Section Referred to in Other Sections

    This section is referred to in section 2129 of this title.
