
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: 12USC2278a-5]

 
                       TITLE 12--BANKS AND BANKING
 
                     CHAPTER 23--FARM CREDIT SYSTEM
 
             SUBCHAPTER VI--ASSISTANCE TO FARM CREDIT SYSTEM
 
                        Part A--Assistance Board
 
Sec. 2278a-5. Assistance


(a) In general

    The Assistance Board shall assist an institution that has been 
certified under section 2278a-4 of this title by--
        (1) authorizing the institution to issue preferred stock under 
    section 2278b-7 of this title, in amounts necessary to maintain the 
    book value of stock, participation certificates, and other similar 
    equities of the institution, at the level provided for in subsection 
    (c) of this section;
        (2) in the case of high-cost debt for which the institution is 
    primarily liable, authorizing the institution to issue preferred 
    stock under section 2278b-7 of this title, in an amount equal to the 
    premium that would be required by the holder of the debt for the 
    institution to retire the debt at the then current market value;
        (3) on a request by the institution, authorizing the issuance of 
    preferred stock under section 2278b-7 of this title to facilitate 
    the merger of the requesting institution with one or more other 
    System institutions; or
        (4) providing assistance by such other methods as the Assistance 
    Board determines appropriate.

(b) ``High-cost debt'' defined

    For purposes of subsection (a)(2) of this section, the term ``high-
cost debt'' means securities or similar obligations issued before 
January 1, 1986, that mature on or after December 31, 1987, and bear a 
rate of interest in excess of the then current market rate for similar 
securities or obligations.

(c) Minimum equity value

    The Assistance Board shall authorize a certified institution to 
issue amounts of preferred stock under section 2278b-7 of this title 
sufficient to--
        (1) maintain the value of stock, participation certificates and 
    other similar equities at no less than 75 percent of the par value 
    of the stock or the face value of the certificates or equities, as 
    determined under generally accepted accounting principles; and
        (2) strengthen the institution to a point where it is 
    economically viable, and capable of delivering credit at reasonable 
    and competitive rates.

(d) Limitation

    Except as provided in section 410(c) of the Agricultural Credit Act 
of 1987, no assistance shall be provided in connection with a merger 
until the stockholders and the institutions involved have approved the 
merger and the Farm Credit Administration has given final approval to 
the merger plan.

(Pub. L. 92-181, title VI, Sec. 6.5, as added Pub. L. 100-233, title II, 
Sec. 201, Jan. 6, 1988, 101 Stat. 1588; amended Pub. L. 100-399, title 
II, Sec. 201(d), (e), Aug. 17, 1988, 102 Stat. 991.)

                       References in Text

    Section 410(c) of the Agricultural Credit Act of 1987, referred to 
in subsec. (d), is section 410(c) of Pub. L. 100-233, which is set out 
as a note under section 2011 of this title.


                               Amendments

    1988--Subsecs. (a)(1) to (3), (c). Pub. L. 100-399, Sec. 201(e), 
struck out ``the appropriate provision of'' after ``under'' wherever 
appearing.
    Subsec. (d). Pub. L. 100-399, Sec. 201(d), substituted ``Except as 
provided in section 410(c) of the Agricultural Credit Act of 1987, no'' 
for ``No''.


                    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.
