
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: 12USC2278a-6]

 
                       TITLE 12--BANKS AND BANKING
 
                     CHAPTER 23--FARM CREDIT SYSTEM
 
             SUBCHAPTER VI--ASSISTANCE TO FARM CREDIT SYSTEM
 
                        Part A--Assistance Board
 
Sec. 2278a-6. Special powers


(a) In general

    In the case of a System institution that requests certification 
under section 2278a-4 of this title, the Assistance Board may--
        (1) require the institution to obtain approval from the 
    Assistance Board before implementing business, operating, and 
    investment plans and policies;
        (2) if one or more of the conditions described in section 
    2183(b) of this title are met, as determined by the Farm Credit 
    Administration, direct the Farm Credit Administration Board to 
    appoint a conservator for the institution, in accordance with such 
    section, and to instruct the conservator to evaluate the operations 
    of the institution and report to the Farm Credit Administration 
    Board and the Assistance Board on the possibility of restoring the 
    institution to sound financial condition;
        (3) request that the Farm Credit Administration Board or the 
    Farm Credit Administration, as appropriate--
            (A) approve or require a merger or consolidation of the 
        institution to the extent authorized under this chapter;
            (B) initiate action to appoint a receiver under section 
        2183(b) of this title; or
            (C) exercise any enforcement power authorized under this 
        chapter;

        (4) require the institution to obtain approval from the 
    Assistance Board before setting the terms and conditions of any debt 
    issuances of the institution;
        (5) require the institution to obtain approval from the 
    Assistance Board before setting the policy on credit standards to be 
    used, and the policy on rates of interest to be charged on loans, by 
    the institution, including requiring that--
            (A) the institution set interest rates at levels necessary 
        to ensure that the cost of money to the institution reflects the 
        marginal cost to the institution of borrowing an additional 
        amount of money at the time a new loan is made; and
            (B) loans primarily secured by real estate mortgages not 
        exceed 85 percent of the appraised agricultural value of the 
        real estate security, or 75 percent of the then current market 
        value of the real estate security, whichever is greater;

        (6) require the institution to obtain approval from the 
    Assistance Board for the design of management information and 
    accounting systems at the institution, and of the continued use by 
    the institution of regulatory accounting practices in accordance 
    with sections 2159(b) and 2254(b) of this title;
        (7) require that the plans and policies of the institution 
    resulting from the merger of System banks reduce the overhead costs 
    of such institution, to the maximum extent practicable, with respect 
    to the delivery of services to, and performance of duties for, 
    System associations in the district;
        (8) require the institution to obtain approval from the 
    Assistance Board of--
            (A) the hiring policies of the institution;
            (B) the compensation and retirement benefits of the chief 
        executive officer, other managers, and directors of the 
        institution;
            (C) any change in the management of the institution; and
            (D) policy decisions regarding continued employment and 
        promotion of the officials referred to in subparagraph (B);

        (9) suspend for any period of time, or terminate, any 
    certification granted to an institution under section 2278a-4 of 
    this title if the Farm Credit Administration notifies the Assistance 
    Board that the institution has substantially deviated from the 
    institution's business plan or has failed to comply with a term or 
    condition governing the use of any financial assistance provided to 
    the institution under this subchapter; and
        (10) take such other action as the Assistance Board determines 
    may be necessary to establish prudent operating practices at the 
    institution and to return the institution to a sound financial 
    condition.

(b) Suspension of assistance

                          (1) Notification

        The Assistance Board shall promptly notify the Farm Credit 
    Administration of any action taken by the Assistance Board under 
    subsection (a)(9) of this section.

                           (2) Enforcement

        The Farm Credit Administration may use any of its enforcement 
    powers, with respect to any institution to which the Assistance 
    Board has provided assistance or has certified the institution to 
    issue preferred stock under section 2278b-7 of this title, to obtain 
    the compliance of the institution with the terms or conditions 
    governing the use of financial assistance provided under this 
    subchapter.

(c) Undated letters of resignation

    The Assistance Board shall not, for any reason, request or require 
any member of the board of directors of any System institution to submit 
to the Assistance Board an undated letter of resignation. Immediately 
after January 6, 1988, the Assistance Board shall destroy all such 
letters over which it has control.

(d) Reports

    During the 5-year period beginning on January 6, 1988, the 
Assistance Board, in coordination with the Financial Assistance 
Corporation, shall report annually to the Committee on Agriculture of 
the House of Representatives and the Committee on Agriculture, 
Nutrition, and Forestry of the Senate on the extent to which System 
institutions translate the savings in the cost of the operations of such 
institutions due to the Federal assistance provided to the System under 
this subchapter into lower interest rates charged to System borrowers or 
enhanced financial solvency of such institutions.

(Pub. L. 92-181, title VI, Sec. 6.6, as added Pub. L. 100-233, title II, 
Sec. 201, Jan. 6, 1988, 101 Stat. 1589; amended Pub. L. 100-399, title 
II, Sec. 201(f)-(i), Aug. 17, 1988, 102 Stat. 991; Pub. L. 101-624, 
title XVIII, Sec. 1843(a)(2), Nov. 28, 1990, 104 Stat. 3836.)


                               Amendments

    1990--Subsec. (a)(8)(B). Pub. L. 101-624 struck out before semicolon 
at end ``notwithstanding the authority of the Farm Credit Administration 
to approve such matters''.
    1988--Subsec. (a)(8)(B). Pub. L. 100-399, Sec. 201(f), struck out 
``under sections 2226 and 2252(a)(15) of this title'' after ``such 
matters''.
    Subsec. (a)(9). Pub. L. 100-399, Sec. 201(g), struck out ``may'' 
before ``suspend''.
    Subsec. (b)(1). Pub. L. 100-399, Sec. 201(h), substituted ``(a)(9)'' 
for ``(a)(8)''.
    Subsec. (b)(2). Pub. L. 100-399, Sec. 201(i), struck out ``the 
appropriate provision of'' after ``stock under''.


                    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 2254, 2271, 2278a-4, 2278a-7 
of this title.
