
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: 12USC2162]

 
                       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. 2162. Protection of borrower stock


(a) Retirement of stock

    Notwithstanding any other section of this chapter, each institution 
of the Farm Credit System, when retiring eligible borrower stock in 
accordance with this chapter, shall retire such stock at par value.

(b) Certain powers not affected

    This section does not affect the authority of any institution of the 
Farm Credit System--
        (1) to retire or cancel borrower stock at par value for 
    application against a loan in default;
        (2) to cancel borrower stock at par value under section 2202b of 
    this title; or
        (3) to apply, against any outstanding indebtedness to a System 
    association arising out of or in connection with a liquidation 
    referred to in subsection (d)(2) of this section, the par value of 
    borrower stock frozen in such liquidation.

(c) Inability to retire stock at par value

    If an institution is unable to retire eligible borrower stock at par 
value due to the liquidation of the institution, the receiver of the 
institution shall retire such stock at par value as would have been 
retired in the ordinary course of business of the institution, and--
        (1) during the 5-year period beginning on January 6, 1988, the 
    Assistance Board shall direct the Financial Assistance Corporation 
    to provide the receiver with sufficient funds to enable the receiver 
    to carry out this subsection; and
        (2) after such 5-year period, the Farm Credit System Insurance 
    Corporation shall provide the receiver with sufficient funds from 
    the Farm Credit Insurance Fund to enable the receiver to carry out 
    this subsection.

(d) Definitions

    For purposes of this section:

                         (1) Borrower stock

        The term ``borrower stock'' means voting and nonvoting stock, 
    equivalent contributions to a guaranty fund, participation 
    certificates, allocated equities, and other similar equities that 
    are subject to retirement under a revolving cycle issued by any 
    System institution and held by any person other than any System 
    institution.

                     (2) Eligible borrower stock

        The term ``eligible borrower stock'' means borrower stock that--
            (A) is outstanding on January 6, 1988;
            (B) is issued or allocated after January 6, 1988, but prior 
        to the earlier of--
                (i) in the case of each bank and association, the date 
            of approval, by the stockholders of such bank or 
            association, of the capitalization requirements of the 
            institution in accordance with section 2154a of this title; 
            or
                (ii) the date that is 9 months after January 6, 1988;

            (C) was, after January 1, 1983, but before January 6, 1988, 
        frozen by an institution that was placed in liquidation; or
            (D) was retired at less than par value by an institution 
        that was placed in liquidation after January 1, 1983, but before 
        January 6, 1988.

                           (3) Institution

        The term ``institution'' means a bank or association chartered 
    under this chapter.

                            (4) Par value

        The term ``par value'' means--
            (A) in the case of stock, par value;
            (B) in the case of participation certificates and other 
        equities and interests not described in subparagraph (C), face 
        or equivalent value; or
            (C) in the case of participation certificates and allocated 
        equities subject to retirement under a revolving cycle but that 
        a System institution elects to retire out of order for 
        application against a loan in default or otherwise as provided 
        in this chapter, par or face value discounted, at a rate 
        determined by the institution, to reflect the present value of 
        the equity or interest as of the date of such retirement.

(Pub. L. 92-181, title IV, Sec. 4.9A, as added Pub. L. 100-233, title I, 
Sec. 101, Jan. 6, 1988, 101 Stat. 1572; amended Pub. L. 100-399, title 
I, Sec. 101(b)-(d), Aug. 17, 1988, 102 Stat. 989.)


                            Prior Provisions

    A prior section 4.9A of Pub. L. 92-181, which authorized a central 
reserve for Farm Credit System, was classified to section 2161 of this 
title and was repealed by Pub. L. 100-399, Sec. 101(a).


                               Amendments

    1988--Subsec. (a). Pub. L. 100-399, Sec. 101(b), struck out 
provision that an institution whose capital stock is impaired coordinate 
retirement of stock under this section with the activities of the 
Assistance Board and the Financial Assistance Corporation.
    Subsec. (c). Pub. L. 100-399, Sec. 101(c), inserted ``stock'' in 
subsec. heading and amended text generally. Prior to amendment, text 
read as follows: ``If an institution is unable to retire eligible 
borrower stock at par value due to the freezing of such stock during a 
liquidation of the institution, the receiver of the institution shall 
retire such stock at par value as would have been retired in the 
ordinary course of business of the institution and the Financial 
Assistance Corporation, on request of the Assistance Board, shall 
provide the receiver with sufficient funds to enable the receiver to 
carry out this subsection.''
    Subsec. (d)(2)(B). Pub. L. 100-399, Sec. 101(d), in introductory 
provision substituted ``issued or allocated'' for ``required to be 
purchased, and is purchased, as a condition of obtaining a loan made'' 
and in cl. (i) substituted ``section 2154a of this title'' for ``section 
4.9B''.


                    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 2154a, 2199, 2277a-9, 2278b-
6 of this title.
