
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: 12USC2278b-6]

 
                       TITLE 12--BANKS AND BANKING
 
                     CHAPTER 23--FARM CREDIT SYSTEM
 
             SUBCHAPTER VI--ASSISTANCE TO FARM CREDIT SYSTEM
 
                Part B--Financial Assistance Corporation
 
Sec. 2278b-6. Debt obligations


(a) Issuance

    During the period beginning 61 days after January 6, 1988, and 
ending September 30, 1992, the Financial Assistance Corporation, subject 
to the approval of the Assistance Board, may issue uncollateralized 
bonds, notes, debentures, and similar obligations, guaranteed as to the 
timely payment of principal and interest by the Secretary of the 
Treasury as set forth in subsection (d) of this section, with semiannual 
interest coupon payments and a maturity period of 15 years--
        (1) in an aggregate amount not to exceed $2,800,000,000; and
        (2) beginning January 1, 1989, in an additional amount, not to 
    exceed $1,200,000,000, if--
            (A) debt obligations have been issued by the Corporation to 
        the full extent authorized under paragraph (1);
            (B) the Assistance Board determines that such additional 
        funds are needed to carry out this subchapter; and
            (C) at least 90 days before the issuance of any debt 
        obligations under this paragraph, the Assistance Board submits a 
        report to Congress that sets forth the determination of the 
        Assistance Board that such additional debt obligations should be 
        issued, and that contains a detailed evaluation supporting the 
        determination.

(b) Conditions

    The debt obligations shall be in such forms and denominations, bear 
such rates of interest, be subject to such conditions, be issued in such 
manner, and be sold at such prices as may be prescribed by the Financial 
Assistance Corporation.

(c) Interest payments

         (1) Payment of interest during first 5-year period

        During each year of the first 5-year period of the 10-year 
    period beginning on the date of issuance of each obligation under 
    subsection (a) of this section, the Financial Assistance Corporation 
    shall pay, without recourse to System institutions, other than that 
    described in paragraph (5), all of the interest due on such 
    obligation.

         (2) Payment of interest during second 5-year period

        (A) In general

            During each year of the second 5-year period of the 10-year 
        period beginning on the date of issuance of each obligation 
        under subsection (a) of this section, the Financial Assistance 
        Corporation shall pay all of the interest due on such 
        obligation.

        (B) Payment by System banks to Financial Assistance Corporation

            During each year of the second 5-year period, System banks 
        shall pay to the Financial Assistance Corporation 50 percent of 
        the interest due on the obligations, except that System banks 
        shall pay an additional 10 percent of the interest expense for 
        each 1 percent that the unallocated retained earnings of the 
        System (as determined under generally accepted accounting 
        principles) exceed 5 percent of net assets (total assets less 
        allowance for loan losses) based on a year-end financial 
        statement for the preceding year.

        (C) Allocation

            During each year of the second 5-year period, each System 
        bank shall pay to the Financial Assistance Corporation a 
        proportion, as calculated by the Financial Assistance 
        Corporation, of the interest due from System banks under this 
        paragraph equal to--
                (i) the amount of the average accruing retail loan 
            volume of the bank and its affiliated associations for the 
            preceding year; divided by
                (ii) the total average accruing retail loan volume of 
            all such banks and their affiliated associations for the 
            preceding year.

                      (3) Payments by Treasury

        The Secretary of the Treasury, in accordance with section 2278b-
    8 of this title, shall pay to the Financial Assistance Corporation, 
    in a timely manner, the balance of each interest payment not made by 
    the System banks.

         (4) Payment of interest after first 10-year period

        During each year of the third 5-year period of the 15-year 
    period beginning on the date of the issuance of each obligation 
    under subsection (a) of this section, the Financial Assistance 
    Corporation shall pay all of the interest due on such obligation. 
    During each year of such 5-year period, System banks shall pay the 
    entire amount of interest due on the obligation allocated in the 
    same manner as under paragraph (2)(C). Such payments shall be made 
    to the Financial Assistance Corporation at such times as the 
    Financial Assistance Corporation shall determine.

               (5) Repayment of Treasury-paid interest

        (A) In general

            On the maturity date of the last-maturing debt obligation 
        issued under subsection (a) of this section, the Financial 
        Assistance Corporation shall repay to the Secretary of the 
        Treasury the total amount of any annual interest charges on the 
        debt obligations that Farm Credit System institutions (other 
        than the Financial Assistance Corporation) have not previously 
        paid, and the Financial Assistance Corporation shall not be 
        required to pay any additional interest charges on the payments.

        (B) Assessment

            In order to provide for the orderly funding by the banks of 
        the System of the repayment by the Financial Assistance 
        Corporation to the Secretary of the Treasury, the Financial 
        Assistance Corporation shall assess each System bank, on or 
        about December 31 of each year beginning in 1992, and each 
        System bank shall promptly pay to the Financial Assistance 
        Corporation, an annual annuity type payment in an amount 
        designed to accumulate, in total, including earnings thereon, 
        the amount of the bank's ultimate obligation (as determined by 
        the Corporation on a fair and equitable basis), and no greater 
        than .0006 nor less than .0004 times the bank's and its 
        affiliated associations' average accruing retail loan volume for 
        the preceding year, subject to--
                (i) upward or downward adjustment, as appropriate, by 
            the Financial Assistance Corporation during each of the last 
            5 years prior to the date the Financial Assistance 
            Corporation is obligated to make the repayment, in order to 
            ensure that the Financial Assistance Corporation will have 
            the amount of funds needed to make the repayment on the due 
            date; and
                (ii) reduction or termination in any year when the funds 
            paid to the Financial Assistance Corporation, including any 
            anticipated future earnings on the funds, are sufficient to 
            make the repayment on the due date.

        (C) Investment of funds

            The Financial Assistance Corporation shall invest funds 
        derived from the investment in eligible investments as defined 
        in section 2278b-5(a)(1) of this title. The funds and the 
        earnings on the funds shall be available only for the repayment 
        to the Secretary of the Treasury provided for in subparagraph 
        (A).

        (D) Pass through

            A bank may (and, to the extent necessary to satisfy its 
        obligations, shall) pass on (either directly, or indirectly 
        through loan pricing or otherwise) all or part of the 
        assessments to its affiliated direct lender associations based 
        on proportionate average accruing retail loan volumes for the 
        preceding year, but the bank shall remain primarily liable for 
        the amounts.

        (E) Liability

            (i) Banks terminating System status or in 
                    liquidation

                Any bank terminating System status pursuant to section 
            2279d of this title shall be required, under regulations of 
            the Farm Credit Administration, to pay to the Financial 
            Assistance Corporation the estimated present value of all 
            future such assessments against the bank had the bank 
            remained in the System. A liability to the Financial 
            Assistance Corporation in this amount (calculated as if the 
            bank had left the System on the date the bank was placed in 
            liquidation) shall be recognized as a claim in favor of the 
            Financial Assistance Corporation against the estate of any 
            bank undergoing liquidation.
            (ii) No anticipatory reductions in other obligations

                The obligations of other banks shall not be reduced in 
            anticipation of any recoveries under this subparagraph from 
            banks leaving the System or in liquidation.
            (iii) Refund of recoveries

                The Financial Assistance Corporation shall apply the 
            recoveries, when received, and all earnings on the 
            recoveries, to reduce the other banks' payment obligations, 
            or, to the extent the recoveries are received after the 
            other banks have met their entire payment obligation, shall 
            refund the recoveries, when received, to the other banks in 
            proportion to the other banks' payments.

        (F) Associations terminating System status or in liquidation

            Any association terminating System status pursuant to 
        section 2279d of this title shall be required, under regulations 
        of the Farm Credit Administration, to pay to its supervising 
        bank a share, based on the association's retail loan volume 
        relative to the retail loan volume of the bank and its 
        affiliated associations had the association remained in the 
        System, of the estimated present value of all future such 
        assessments against the bank. A liability to the bank in this 
        amount (calculated as if the association had left the System on 
        the date it was placed in liquidation) shall be recognized as a 
        claim in favor of the bank against the estate of any association 
        undergoing liquidation.

        (G) Capital requirements

            (i) In general

                Until the date that is 5 years prior to the date on 
            which the Financial Assistance Corporation is required to 
            repay the Secretary of the Treasury pursuant to subparagraph 
            (A), all assessments paid by banks to the Financial 
            Assistance Corporation pursuant to subparagraph (B), and any 
            part of the obligation to pay future assessments to the 
            Financial Assistance Corporation under subparagraph (B) that 
            is recognized as an expense on the books of any System bank 
            or association, shall nonetheless be included in the capital 
            of the bank or association for purposes of determining its 
            compliance with regulatory capital requirements.
            (ii) During the final 5 years prior to repayment

                During the--
                    (I) period beginning 5 years, and ending 4 years, 
                prior to the date on which the Financial Assistance 
                Corporation is required to repay the Secretary of the 
                Treasury pursuant to subparagraph (A), 60 percent;
                    (II) period beginning 4 years, and ending 3 years, 
                prior to the date on which the Financial Assistance 
                Corporation is required to repay the Secretary of the 
                Treasury pursuant to subparagraph (A), 30 percent; and
                    (III) period beginning 3 years prior to the date on 
                which the Financial Assistance Corporation is required 
                to repay the Secretary of the Treasury pursuant to 
                subparagraph (A), 0 percent,

          of all assessments paid by banks to the Financial Assistance 
            Corporation pursuant to subparagraph (B), and of any part of 
            the obligation to pay future assessments to the Financial 
            Assistance Corporation under subparagraph (B) that is 
            recognized as an expense on the books of any System bank or 
            association, shall nonetheless be included in the capital of 
            the bank or association for purposes of determining its 
            compliance with regulatory capital requirements.

(d) Refinancing and payment of principal; defaults

                           (1) In general

        (A) Time of repayment

            On maturity of an obligation issued under subsection (a) of 
        this section, the obligation shall be repaid by the Financial 
        Assistance Corporation.

        (B) Payments by institutions

            (i) In general

                Except as provided in subparagraph (C), in order to 
            enable the Financial Assistance Corporation to repay the 
            obligation referred to in subparagraph (A), each institution 
            that issued preferred stock under section 2278b-7(a) of this 
            title with respect to the obligation (or the successor to 
            the institution) shall pay to the Financial Assistance 
            Corporation, before the maturity date of the obligation, an 
            amount equal to the par value of the stock outstanding for 
            the institution.
            (ii) Annual appropriation

                Except as provided in clause (iii), each year beginning 
            in 1992, as soon as practicable following the end of the 
            prior year, each such institution (except institutions in 
            receivership and institutions that have previously redeemed 
            their preferred stock) shall appropriate from its earnings 
            in the prior year to an appropriated unallocated surplus 
            account with respect to preferred stock, the sum of--
                    (I) the greater of--
                        (aa) such amount as the institution may be 
                    required to appropriate under any assistance 
                    agreement the institution has with the Farm Credit 
                    System Assistance Board or the Farm Credit System 
                    Insurance Corporation; or
                        (bb) the amount that, if appropriated to the 
                    account in equal amounts in each year thereafter 
                    until the maturity of the obligation referred to in 
                    subparagraph (A), would cause the amount in the 
                    account to equal the par value of the preferred 
                    stock issued by the institution with respect to the 
                    obligation; plus

                    (II) any amount that had been appropriated to the 
                account in a previous year but had thereafter been 
                offset by losses.
            (iii) Limitation

                An annual appropriation shall not be made to the extent 
            that the appropriation would exceed the institution's net 
            income (as determined pursuant to generally accepted 
            accounting principles) in that year or to the extent that 
            the appropriation would cause the institution's preferred 
            stock to be impaired.
            (iv) Use

                The amount in the appropriated unallocated surplus 
            account shall be unavailable to pay dividends or other 
            allocations or distributions to shareholders or holders of 
            participation certificates. The account shall be senior to 
            all other unallocated surplus accounts but junior to all 
            preferred and common stock for purposes of the application 
            of operating losses.
            (v) Preferred stock

                The appropriations of surplus by an institution shall 
            not affect the treatment of its preferred stock (and of the 
            appropriated unallocated surplus) as equity for purposes of 
            regulatory permanent capital requirements.

        (C) Systemwide repayment

            (i) In general

                In order to enable the Financial Assistance Corporation 
            to repay the obligations issued to provide assistance under 
            subsections (c) and (e) of section 410 of the Agricultural 
            Credit Act of 1987 (12 U.S.C. 2011 note) and section 2162(c) 
            of this title, or issued to provide funds to cover the 
            expenses of the Assistance Board or the Financial Assistance 
            Corporation under sections 2278a-7(a) and 2278b-4, 
            respectively, of this title, each System bank shall pay to 
            the Financial Assistance Corporation a proportion, as 
            calculated by the Financial Assistance Corporation, of the 
            obligation equal to--
                    (I) the average accruing retail loan volume of the 
                bank and its affiliated associations for the preceding 
                15 years; divided by
                    (II) the average accruing retail loan volume of all 
                such banks and their affiliated associations for the 
                same period.
            (ii) Expense item

                The annual increase in the present value of the 
            estimated obligation of each bank to the Financial 
            Assistance Corporation under this subparagraph shall be 
            recorded each year as an expense item, in accordance with 
            generally accepted accounting principles, on the books of 
            the bank.
            (iii) Pass through

                A bank may (and, to the extent necessary to satisfy its 
            obligations, shall) pass on (either directly, or indirectly 
            through loan pricing or otherwise) all or part of the amount 
            necessary to satisfy the payment requirement to its 
            affiliated direct lender associations based on proportionate 
            average accruing retail loan volumes for the preceding 15 
            years, except that the bank shall remain primarily liable 
            for the amount.
            (iv) Banks leaving System

                Any bank leaving the Farm Credit System pursuant to 
            section 2279d of this title shall be required, under 
            regulations of the Farm Credit Administration, to pay to the 
            Financial Assistance Corporation the estimated present value 
            of the payment required under this subparagraph had the bank 
            remained in the System. A liability to the Financial 
            Assistance Corporation in this amount (calculated as if the 
            bank had left the System on the date it was placed in 
            liquidation) shall be recognized as a claim in favor of the 
            Financial Assistance Corporation against the estate of any 
            bank undergoing liquidation. The obligations of other banks 
            shall not be reduced in anticipation of any such recoveries 
            from banks leaving the System or in liquidation, but the 
            Financial Assistance Corporation shall apply the recoveries, 
            when received, and all earnings on the recoveries, to reduce 
            the other banks' payment obligations, or, to the extent the 
            recoveries are received after the other banks have met their 
            entire payment obligation, shall refund the recoveries, when 
            received, to the other banks in proportion to the other 
            banks' payments.
            (v) Associations terminating System status or in 
                    liquidation

                Any association leaving the Farm Credit System pursuant 
            to section 2279d of this title shall be required, under 
            regulations of the Farm Credit Administration, to pay to its 
            supervising bank a share, based on the association's retail 
            loan volume relative to the retail loan volume of the bank 
            and its affiliated associations had the association remained 
            in the System, of the present value of the future payment 
            obligation of its supervising bank. A liability to the bank 
            in this amount (calculated as if the association had left 
            the System on the date it was placed in liquidation) shall 
            be recognized as a claim in favor of the bank against the 
            estate of any association undergoing liquidation.

        (D) Funds for payments

            Payments under subparagraphs (B) and (C) shall be made by 
        each such institution from the funds of the institution or from 
        funds raised by the institution through the issuance of debt 
        obligations, which may be issued without a collateral 
        requirement and without any guarantee by the Secretary of the 
        Treasury.

                     (2) Refinanced obligations

        The refinanced obligations issued under paragraph (1) shall be 
    solely the obligations of the institutions refinancing such, and 
    sections 2154 and 2155 of this title shall not apply to such 
    obligations.

                            (3) Defaults

        (A) Certain principal and interest obligations

            (i) Payment by Corporation

                If a System bank defaults on the payment of interest due 
            under subsection (c) of this section during the first 15 
            years after an obligation is issued under subsection (a) of 
            this section, on the payment of principal or interest due 
            under subparagraphs (B) and (C) of section 2278a-9(e)(3) of 
            this title, on the payment of principal due under paragraph 
            (1)(C), or on the payment of an assessment due under 
            subsection (c)(5)(B) of this section, the Financial 
            Assistance Corporation shall pay the amount due by the 
            System bank out of the Trust Fund, and shall recover the 
            amount due from the defaulting System bank, and such amount 
            shall be paid to the Trust Fund.
            (ii) Payment by Insurance Fund

                If the Financial Assistance Corporation has not 
            recovered the full amount due from a defaulting bank by the 
            end of the 12-month period beginning on the date of default, 
            any uncollected amount shall be paid to the Trust Fund from 
            the Insurance Fund established under section 2277a-9 of this 
            title, to the full extent of funds available in the 
            Insurance Fund as of the date the Financial Assistance 
            Corporation notified the Farm Credit System Insurance 
            Corporation of amounts due under this section.
            (iii) Payment by remaining institutions

                To the extent that the payment from the Insurance Fund 
            is insufficient to reimburse the Trust Fund, the remaining 
            balance shall be allocated to other System banks in 
            accordance with the allocation mechanism applicable under 
            this chapter to the particular defaulted obligation.

        (B) Principal of bonds issued to fund purchase of preferred 
                stock

            (i) Evaluation

                Not later than 90 days before the maturity of any 
            obligation issued under subsection (a) of this section, the 
            Farm Credit Administration shall complete an evaluation of 
            the general financial condition of each System institution 
            that issued preferred stock under section 2278b-7(a) of this 
            title with respect to such obligation to determine whether 
            such System institution will be able to redeem such stock at 
            par value on the maturity of the obligation, and remain a 
            viable institution capable of providing credit to eligible 
            borrowers at equitable and competitive interest rates.
            (ii) Availability of evaluation

                A copy of the evaluation required under clause (i) shall 
            be furnished to the Secretary of the Treasury and the 
            appropriate committees of Congress.
            (iii) Redemption by institution; purchase by 
                    Secretary of the Treasury

                If the Farm Credit Administration determines, in 
            consultation with the Secretary of the Treasury, on the 
            basis of the evaluation required under clause (i), that the 
            redemption of such stock at par value would impair the other 
            stock or equities of such institution or render such 
            institution incapable of meeting its capital adequacy 
            standards, the institution shall be prohibited from 
            redeeming the preferred stock it issued under section 2278b-
            7 of this title with respect to the maturing obligation. If 
            the Farm Credit Administration determines, in consultation 
            with the Secretary of the Treasury, on the basis of the 
            evaluation required under clause (i), that such institution 
            will be able to redeem, in a timely manner and at par value, 
            the preferred stock it issued under section 2278b-7 of this 
            title with respect to the maturing obligation, and remain a 
            viable and competitive institution, such institution shall 
            have the option of redeeming or not redeeming such stock. If 
            such institution is prohibited from redeeming or elects not 
            to redeem such stock, the Financial Assistance Corporation 
            shall withdraw funds from the Trust Fund in an amount equal 
            to the par value of the preferred stock issued by such 
            institution under section 2278b-7 of this title so as to 
            enable the Financial Assistance Corporation to pay the 
            principal of the maturing obligation. Simultaneously with 
            such withdrawal of funds from the Trust Fund, the Financial 
            Assistance Corporation shall transfer to the Insurance Fund 
            an equal amount, at par value, of preferred stock of such 
            institution. To the extent that the Trust Fund is 
            insufficient to enable the Financial Assistance Corporation 
            to pay the full principal of the maturing obligation, the 
            Insurance Fund shall be used by the Farm Credit System 
            Insurance Corporation to purchase, at par value, the 
            preferred stock issued by such institution under section 
            2278b-7(a) of this title to enable the Financial Assistance 
            Corporation to pay the principal of the maturing obligation. 
            To the extent that the Insurance Fund is insufficient to 
            enable the Financial Assistance Corporation to pay the full 
            principal of the maturing obligation, the Secretary of the 
            Treasury shall purchase, at par value, the remaining 
            quantity of the preferred stock issued by such institution 
            to enable the Financial Assistance Corporation to make such 
            full payment. For that purpose, the Secretary of the 
            Treasury may use, as a public debt transaction, the proceeds 
            from the sale of any securities issued under chapter 31 of 
            title 31. The purposes for which such securities may be 
            issued under such chapter are extended to include such 
            purchases of stock. Any preferred stock transferred to, or 
            purchased by, the Farm Credit System Insurance Corporation 
            under this clause shall be retired by the issuing 
            institution at such times and under such terms and 
            conditions as are agreed to between the Insurance 
            Corporation and such institution.

        (C) Recourse by other System banks

            A defaulting bank shall be liable to the remaining System 
        banks for any amounts paid by the remaining banks under this 
        paragraph.

                    (4) Payment by United States

        (A) Inability to pay

            Notwithstanding any other provision of this chapter, if the 
        Financial Assistance Corporation is unable to pay the principal 
        or interest of any obligation issued under subsection (a) of 
        this section or section 2278a-9(e)(3)(A) of this title, the 
        Secretary of the Treasury shall pay to the Financial Assistance 
        Corporation the amount due which shall be used by the Financial 
        Assistance Corporation to pay the obligation.

        (B) Recovery

            (i) Certain principal and interest obligations

                In each instance in which the Secretary of the Treasury 
            is required to make a payment under subparagraph (A) to the 
            Financial Assistance Corporation as a result of a default 
            made by a System bank on interest due from such System bank 
            under subsection (c) of this section, on the payment of 
            principal or interest due under subparagraphs (B) and (C) of 
            section 2278a-9(e)(3) of this title, on the payment of 
            principal due under paragraph (1)(C), or on the payment of 
            an assessment due under subsection (c)(5)(B) of this 
            section, the Secretary of the Treasury shall recover the 
            amount of the payments the Secretary made, with respect to 
            each defaulting bank, from such defaulting bank. If the 
            Secretary has not recovered the full amount due from the 
            defaulting bank by the end of the 12-month period beginning 
            on the date of payment by the Secretary, the uncollected 
            amount shall be paid to the Secretary from the Insurance 
            Fund established under section 2277a-9 of this title.
            (ii) Principal of bonds issued to fund purchase of 
                    preferred stock

                In each instance in which the Secretary of the Treasury 
            is required under paragraph (3)(B)(iii) to purchase 
            preferred stock issued by a System institution under section 
            2278b-7(a) of this title, the Farm Credit System Insurance 
            Corporation shall use funds deposited in the Insurance Fund 
            to repurchase, at par value, from the Secretary of the 
            Treasury such stock required to be purchased under paragraph 
            (3)(B)(iii) as funds become available for such repurchase.
            (iii) Priority

                Notwithstanding any other provision of this chapter 
            except for section 2277a-9(c)(2)(B) of this title, during 
            any year in which payments are due to the Secretary of the 
            Treasury from the Insurance Fund under clause (i), or 
            preferred stock held by the Secretary is due to be 
            repurchased by the Insurance Fund under clause (ii), the 
            funds in such Fund, and all funds deposited in such Fund 
            during such year, shall be used first for the purposes 
            specified in clauses (i) and (ii).

(e) Administration

                 (1) ``Retail loan volume'' defined

        As used in this section, the term ``retail loan volume'' means 
    all loans (as defined in accordance with generally accepted 
    accounting principles) by a System bank or association, excluding 
    loans by such a bank or association to another System institution.

           (2) Calculation of average annual loan volumes

        For purposes of this section and section 2278a-9 of this title, 
    average annual loan volumes shall be calculated using month-end 
    balances.

            (3) Exclusion of banks undergoing liquidation

        For purposes of this section and section 2278a-9 of this title, 
    the term ``bank'' shall not include a bank that had entered 
    liquidation prior to October 28, 1992.

(Pub. L. 92-181, title VI, Sec. 6.26, as added Pub. L. 100-233, title 
II, Sec. 201, Jan. 6, 1988, 101 Stat. 1597; amended Pub. L. 100-399, 
title II, Sec. 201(p)-(x), Aug. 17, 1988, 102 Stat. 991, 992; Pub. L. 
102-552, title III, Secs. 302-304(a), 305, 306, Oct. 28, 1992, 106 Stat. 
4109-4111, 4114.)


                               Amendments

    1992--Subsec. (c)(2)(B). Pub. L. 102-552, Sec. 305(1)(A), (B), 
substituted ``banks'' for ``institutions'' wherever appearing in heading 
and text.
    Subsec. (c)(2)(C), (D). Pub. L. 102-552, Sec. 305(1)(C), added 
subpar. (C) and struck out former subpars. (C) and (D) which read as 
follows:
    ``(C) Allocation.--During each year of the second 5-year period, 
each System institution shall pay to the Financial Assistance 
Corporation a proportion of the interest due from System institutions 
under this paragraph equal to--
        ``(i) the amount of the performing loan volume of the 
    institution (based on the average loan volume for the preceding 
    year); divided by
        ``(ii) the total performing loan volume of the System for the 
    preceding year.
    ``(D) Special rule.--For purposes of determining the average loan 
volume of Farm Credit Banks, loan volume shall consist of loans made by 
such banks with the exception of loans made to associations.''
    Subsec. (c)(3), (4). Pub. L. 102-552, Sec. 305(1)(B), substituted 
``banks'' for ``institutions''.
    Subsec. (c)(5). Pub. L. 102-552, Sec. 304(a), amended par. (5) 
generally, substituting present provisions for provisions relating to 
repayments by System institutions generally, time of payments, and terms 
of payments.
    Subsec. (d)(1)(B). Pub. L. 102-552, Sec. 302, amended subpar. (B) 
generally. Prior to amendment, subpar. (B) read as follows: ``Except as 
provided in subparagraph (C), in order to enable the Financial 
Assistance Corporation to repay the obligation referred to in 
subparagraph (A), each institution that issued preferred stock under 
section 2278b-7(a) of this title with respect to such obligation (or the 
successor thereto) shall pay to the Financial Assistance Corporation, 
before the maturity date of such obligation, an amount equal to the par 
value of such stock outstanding for such institution.''
    Subsec. (d)(1)(C). Pub. L. 102-552, Sec. 303, amended subpar. (C) 
generally. Prior to amendment, subpar. (C) read as follows: ``In order 
to enable the Financial Assistance Corporation to repay the obligations 
issued to provide assistance under section 410(c) of the Agricultural 
Credit Act of 1987 and section 2162(c) of this title, or issued to 
provide funds to cover the expenses of the Assistance Board under 
section 2278a-7(a) of this title, each System institution shall pay to 
the Financial Assistance Corporation a proportion of such obligation 
equal to--
        ``(i) the average performing loan volume of the institution for 
    the preceding 15 years; divided by
        ``(ii) the average performing loan volume of all of the System 
    institutions for the same period.''
    Subsec. (d)(1)(D), (E). Pub. L. 102-552, Sec. 305(2), redesignated 
subpar. (E) as (D) and struck out former subpar. (D) which read as 
follows: ``(D) Special rule.--For purposes of determining the average 
loan volume of Farm Credit Banks, loan volume shall consist of loans 
made by such banks with the exception of loans made to associations.''
    Subsec. (d)(3)(A). Pub. L. 102-552, Sec. 306(1)(A), inserted heading 
and struck out former heading ``Interest'', in cl. (i), inserted ``on 
the payment of principal or interest due under subparagraphs (B) and (C) 
of section 2278a-9(e)(3) of this title, on the payment of principal due 
under paragraph (1)(C), or on the payment of an assessment due under 
subsection (c)(5)(B) of this section,'', struck out ``of the interest'' 
after ``the amount'' in two places, and substituted ``bank'' for 
``institution'' wherever appearing, in cl. (ii), struck out ``of 
interest'' after ``the full amount'', and substituted ``defaulting 
bank'' for ``defaulting institution'' and ``any uncollected amount'' for 
``such uncollected interest'', and in cl. (iii), substituted ``allocated 
to other System banks in accordance with the allocation mechanism 
applicable under this chapter to the particular defaulted obligation.'' 
for ``added to the amount of interest due from remaining System 
institutions, under subsection (c) of this section, and each remaining 
System institution, subject to the special rule provided in subsection 
(c)(2)(D) of this section, shall pay to the Trust Fund a proportion of 
the uncollected interest equal to--
        ``(I) the amount of the performing loan volume of the 
    institution (based on the average loan volume for the preceding 
    year); divided by
        ``(II) the total performing loan volume of the System.''
    Subsec. (d)(3)(B). Pub. L. 102-552, Sec. 306(1)(B), inserted heading 
and struck out former heading ``Principal''.
    Subsec. (d)(3)(C). Pub. L. 102-552, Sec. 306(1)(C), substituted 
``banks'' for ``institutions'' wherever appearing in heading and text, 
``bank'' for ``institution'', and ``any amounts'' for ``the amount of 
any interest''.
    Subsec. (d)(4)(A). Pub. L. 102-552, Sec. 306(2)(A), inserted ``or 
section 2278a-9(e)(3)(A) of this title''.
    Subsec. (d)(4)(B)(i). Pub. L. 102-552, Sec. 306(2)(B)(i), inserted 
heading and struck out former heading ``Interest payments'', substituted 
``bank'' for ``institution'' wherever appearing, and inserted ``on the 
payment of principal or interest due under subparagraphs (B) and (C) of 
section 2278a-9(e)(3) of this title, on the payment of principal due 
under paragraph (1)(C), or on the payment of an assessment due under 
subsection (c)(5)(B) of this section,''.
    Subsec. (d)(4)(B)(ii). Pub. L. 102-552, Sec. 306(2)(B)(ii), inserted 
heading and struck out former heading ``Principal payments''.
    Subsec. (e). Pub. L. 102-552, Sec. 305(3), added subsec. (e).
    1988--Subsec. (c)(2)(D). Pub. L. 100-399, Sec. 201(q), substituted 
``Farm Credit Banks'' for ``Federal intermediate credit banks and 
Federal land banks''.
    Pub. L. 100-399, Sec. 201(p), inserted ``and Federal land banks'' 
after ``credit banks'' and struck out ``production credit'' before 
``associations''.
    Subsec. (c)(5)(B). Pub. L. 100-399, Sec. 201(r)(1), substituted 
``payments under this paragraph'' for ``interest payments''.
    Pub. L. 100-399, Sec. 201(r)(2), substituted ``referred to in 
subsection (d)(1)(E)'' for ``issued under subsection (d)(1)(C)''.
    Subsec. (c)(5)(C)(i). Pub. L. 100-399, Sec. 201(r)(1), substituted 
``payments under this paragraph'' for ``interest payments''.
    Subsec. (d). Pub. L. 100-399, Sec. 201(s), inserted ``; defaults'' 
after ``principal'' in heading.
    Subsec. (d)(1)(C). Pub. L. 100-399, Sec. 201(t), in introductory 
provisions substituted ``issued to provide assistance under section 
410(c) of the Agricultural Credit Act of 1987 and section 2162(c) of 
this title, or issued to provide funds to cover the expenses of the 
Assistance Board under section 2278a-7(a) of this title,'' for 
``referred to in section 410(c) of the Agricultural Credit Act of 
1987,'' and ``such obligation'' for ``such principal'', in cl. (i) 
substituted ``institution'' for ``bank'', and in cl. (ii) substituted 
``institutions'' for ``banks''.
    Subsec. (d)(1)(D). Pub. L. 100-399, Sec. 201(q), substituted ``Farm 
Credit banks'' for ``Federal intermediate credit banks and Federal land 
banks''.
    Pub. L. 100-399, Sec. 201(p), inserted ``and Federal land banks'' 
after ``credit banks'' and struck out ``production credit'' before 
``associations''.
    Subsec. (d)(1)(E). Pub. L. 100-399, Sec. 201(u), substituted 
``subparagraphs (B) and (C)'' for ``subparagraph (B)''.
    Subsec. (d)(3)(A)(i), (iii). Pub. L. 100-399, Sec. 201(v), 
substituted ``subsection (c) of this section'' for ``this subsection''.
    Subsec. (d)(3)(B)(iii). Pub. L. 100-399, Sec. 201(w), inserted ``is 
prohibited from redeeming or'' after ``If such institution''.
    Subsec. (d)(4)(B)(iii). Pub. L. 100-399, Sec. 201(x), substituted 
``section 2277a-9(c)(2)(B) of this title'' for ``section 2277a-9 of this 
title''.


                    Effective Date of 1988 Amendment

    Amendment by section 201(q) of Pub. L. 100-399 effective immediately 
after amendment made by section 401 of Pub. L. 100-233, which was 
effective 6 months after Jan. 6, 1988, and amendment by section 201(p), 
(r)-(x) of 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 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 2277a-9, 2278a-9, 2278a-13, 
2278b-1, 2278b-5, 2278b-7, 2278b-8, 2278b-9, 2278b-11 of this title.
