
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: 12USC2155]

 
                       TITLE 12--BANKS AND BANKING
 
                     CHAPTER 23--FARM CREDIT SYSTEM
 
     SUBCHAPTER IV--PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF 
                       INSTITUTIONS OF THE SYSTEM
 
                             Part A--Funding
 
Sec. 2155. Liability of banks; United States not liable


(a) Joint and several liability of banks

    (1) Each bank of the System shall be fully liable on notes, bonds, 
debentures, or other obligations issued by it individually, and shall be 
liable for the interest payments on long-term notes, bonds, debentures, 
or other obligations issued by other banks operating under the same 
subchapter of this chapter.
    (2)(A) Each bank shall also be primarily liable for the portion of 
any issue of consolidated or System-wide obligations made on its behalf 
and be jointly and severally liable for the payment of any additional 
sums as called upon by the Farm Credit Administration in order to make 
payments of interest or principal which any bank primarily liable 
therefor shall be unable to make.
    (B) Such calls first shall be made on all nondefaulting banks in 
proportion to each such bank's proportionate share of the aggregate 
available collateral held by all such banks.
    (C) For purposes of this paragraph, the term ``available 
collateral'' means the amount (determined at the close of the last 
calendar quarter ending before such call) by which a bank's collateral 
as described in section 2154 of this title exceeds the collateral 
required to support the bank's outstanding notes, bonds, debentures, and 
other similar obligations.
    (D) If the Farm Credit Administration makes any such call and the 
available collateral of all such banks does not fully satisfy the 
liability necessitating such calls, such calls shall be made on all 
nondefaulting banks in proportion to each such bank's remaining assets.
    (E) Any System bank that, pursuant to a call by the Farm Credit 
Administration, makes a payment of principal or interest to the holder 
of any consolidated or System-wide obligation issued on behalf of 
another System bank shall be subrogated to all rights of the holder 
against such other bank to the extent of such payment.
    (F) On making such a call with respect to obligations issued on 
behalf of a System bank, the Farm Credit Administration shall appoint a 
receiver for the bank, which shall expeditiously liquidate or otherwise 
wind up the affairs of the bank.

(b) Resolutions as to liability; execution of obligations

    Each bank participating in an issue shall by appropriate resolution 
undertake such responsibility as provided in subsection (a) of this 
section, and in the case of consolidated or System-wide obligations 
shall authorize the execution of such long-term notes, bonds, 
debentures, or other obligations on its behalf. When a consolidated or 
System-wide issue is approved, the notes, bonds, debentures, or other 
obligations shall be executed and the banks shall be liable thereon as 
provided herein.

(c) United States liability

    The United States shall not be liable or assume any liability 
directly or indirectly thereon.

(d) Insurance Fund called on before invoking joint and several liability

    Beginning 5 years after January 6, 1988, the Farm Credit 
Administration shall not call on any System institution to satisfy the 
liability of the institution on any joint, consolidated, or System-wide 
obligation participated in by the institution or with respect to which 
the institution is primarily, or jointly and severally, liable, before 
the Farm Credit Insurance Fund is exhausted, even if the Fund is only 
able to make a partial payment because of insufficient amounts in the 
Fund.

(Pub. L. 92-181, title IV, Sec. 4.4, Dec. 10, 1971, 85 Stat. 611; Pub. 
L. 99-205, title I, Sec. 101(4), title II, Sec. 205(f)(2), Dec. 23, 
1985, 99 Stat. 1679, 1706; Pub. L. 100-233, title II, Sec. 207(c), title 
III, Sec. 303, Jan. 6, 1988, 101 Stat. 1608, 1620; Pub. L. 100-399, 
title III, Sec. 303, Aug. 17, 1988, 102 Stat. 995.)


                               Amendments

    1988--Subsec. (a). Pub. L. 100-233, Sec. 303(a), amended subsec. (a) 
generally. Prior to amendment, subsec. (a) read as follows: ``Each bank 
of the System shall be fully liable on notes, bonds, debentures, or 
other obligations issued by it individually, and shall be liable for the 
interest payments on long-term notes, bonds, debentures, or other 
obligations issued by other banks operating under the same subchapter of 
this chapter. Each bank shall also be primarily liable for the portion 
of any issue of consolidated or System-wide obligations made on its 
behalf and be jointly and severally liable for the payment of any 
additional sums as called upon by the Farm Credit Administration in 
order to make payments of interest or principal which any bank primarily 
liable therefor shall be unable to make. Such calls shall be made first 
upon the other banks operating under the same subchapter of this chapter 
as the defaulting bank, and second upon banks operating under other 
subchapters of this chapter, taking into consideration the capital, 
surplus, bonds, debentures, or other obligations which each may have 
outstanding at the time of such assessment.''
    Subsec. (c). Pub. L. 100-233, Sec. 207(c), redesignated subsec. (d) 
as (c), and struck out former subsec. (c) which provided that for 
purposes of this part, the term ``bank'' included the Capital 
Corporation.
    Subsec. (d). Pub. L. 100-399 redesignated subsec. (e) as (d).
    Pub. L. 100-233, Sec. 207(c), redesignated subsec. (d) as (c).
    Subsec. (e). Pub. L. 100-399 redesignated subsec. (e) as (d).
    Pub. L. 100-233, Sec. 303(b), added subsec. (e).
    1985--Subsec. (b). Pub. L. 99-205, Sec. 205(f)(2), substituted 
``execution of'' for ``Governor to execute'' in first sentence and 
struck out ``by the Governor'' after ``shall be executed'' in second 
sentence.
    Subsecs. (c), (d). Pub. L. 99-205, Sec. 101(4), added subsec. (c) 
and redesignated former subsec. (c) as (d).


                    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.

                  Section Referred to in Other Sections

    This section is referred to in section 2278b-6 of this title.
