12 USC 2279 - Exemption from restructuring and borrowers rights provisions for pooled loans

Collapse to view only § 2279aa-9. Exemption from restructuring and borrowers rights provisions for pooled loans

§ 2279aa-1. Federal Agricultural Mortgage Corporation
§ 2279aa-2. Board of directors
§ 2279aa-3. Powers and duties of Corporation and Board
§ 2279aa-4. Stock issuance
§ 2279aa-5. Certification of agricultural mortgage marketing facilities
§ 2279aa-6. Guarantee of qualified loans
§ 2279aa-7. Repealed.
§ 2279aa-8. Standards for qualified loans
§ 2279aa-9. Exemption from restructuring and borrowers rights provisions for pooled loans
§ 2279aa-10. Funding for guarantee; reserves of Corporation
§ 2279aa-11. Supervision, examination, and report of condition
§ 2279aa-12. Securities in credit enhanced pools
§ 2279aa-13. Authority to issue obligations to cover guarantee losses of Corporation
§ 2279aa-14. Federal jurisdiction

§ 2279aa–1. Federal Agricultural Mortgage Corporation

(a) Establishment

(1) In general

(2) Institution within Farm Credit System

(3) Liability

(A) Corporation

(B) System institutions

(b) Duties

The Corporation shall—

(1) in consultation with originators, develop uniform underwriting, security appraisal, and repayment standards for qualified loans;

(2) determine the eligibility of agricultural mortgage marketing facilities to contract with the Corporation for the provision of guarantees for specific mortgage pools;

(3) provide guarantees for the timely repayment of principal and interest on securities representing interests in, or obligations backed by, pools of qualified loans; and

(4) purchase qualified loans and issue securities representing interests in, or obligations backed by, the qualified loans, guaranteed for the timely repayment of principal and interest.

(Pub. L. 92–181, title VIII, § 8.1, as added Pub. L. 100–233, title VII, § 702, Jan. 6, 1988, 101 Stat. 1687; amended Pub. L. 104–105, title I, § 103, Feb. 10, 1996, 110 Stat. 163.)

§ 2279aa–2. Board of directors

(a) In general

(1) Establishment

(2) CompositionThe Board shall consist of 15 members, of which—

(A) 5 members shall be elected by holders of common stock that are insurance companies, banks, or other financial institutions or entities;

(B) 5 members shall be elected by holders of common stock that are Farm Credit System institutions; and

(i) which members shall not be, or have been, officers or directors of any financial institutions or entities;

(ii) which members shall be representatives of the general public;

(iii) of which members not more than 3 shall be members of the same political party; and

(iv) of which members at least 2 shall be experienced in farming or ranching.

(3) Vacancy

(A) Elected members

(B) Appointed members

(4) Continuation of membershipIf—

(A) any member of the Board who was appointed or elected to the Board from among persons who are representatives of banks, other financial institutions or entities, insurance companies, or Farm Credit System institutions ceases to be such a representative; or

(B) any member who was appointed from persons who are not or have not been directors or officers of any financial institution or entity becomes a director or an officer of any financial institution or entity;

such member may continue as a member for not longer than the 45-day period beginning on the date such member ceases to be such a representative, officer, or employee or becomes such a director or officer, as the case may be.

(5) Terms

(A) Appointed members

(B) Elected members

(D) Service after expiration of term

(6) Quorum

(7) No additional pay for Federal officers or employees

(8) Chairperson

(9) Meetings

(b) Officers and staff

(Pub. L. 92–181, title VIII, § 8.2, as added Pub. L. 100–233, title VII, § 702, Jan. 6, 1988, 101 Stat. 1688; amended Pub. L. 100–399, title VI, § 601(b), Aug. 17, 1988, 102 Stat. 1005; Pub. L. 115–334, title V, § 5411(43), Dec. 20, 2018, 132 Stat. 4684.)

§ 2279aa–3. Powers and duties of Corporation and Board

(a) Guarantees

(b) Duties of Board

(1) In generalThe Board shall—

(A) determine the general policies that shall govern the operations of the Corporation;

(B) select, appoint, and determine the compensation of qualified persons to fill such offices as may be provided for in the bylaws of the Corporation; and

(C) assign to such persons such executive functions, powers, and duties as may be prescribed by the bylaws of the Corporation or by the Board.

(2) Executive officers and functions

(1) To operate under the direction of its Board.

(2) To issue stock in the manner provided in section 2279aa–4 of this title.

(3) To adopt, alter, and use a corporate seal, which shall be judicially noted.

(4) To provide for a president, 1 or more vice presidents, secretary, treasurer, and such other officers, employees, and agents, as may be necessary, define their duties and compensation levels, all without regard to title 5, and require surety bonds or make other provisions against losses occasioned by acts of such persons.

(5) To provide guarantees in the manner provided under section 2279aa–6 of this title.

(6) To have succession until dissolved by a law enacted by the Congress.

(7) To prescribe bylaws, through the Board, not inconsistent with law, that shall provide for—

(A) the classes of the stock of the Corporation; and

(B) the manner in which—

(i) the stock shall be issued, transferred, and retired;

(ii) the officers, employees, and agents of the Corporation are selected;

(iii) the property of the Corporation is acquired, held, and transferred;

(iv) the commitments and other financial assistance of the Corporation are made;

(v) the general business of the Corporation is conducted; and

(vi) the privileges granted by law to the Corporation are exercised and enjoyed;

(8) To prescribe such standards as may be necessary to carry out this subchapter.

(9) To enter into contracts and make payments with respect to the contracts.

(10) To sue and be sued in its corporate capacity and to complain and defend in any action brought by or against the Corporation in any State or Federal court of competent jurisdiction.

(11) To make and perform contracts, agreements, and commitments with persons and entities both inside and outside of the Farm Credit System.

(12) To acquire, hold, lease, mortgage or dispose of, at public or private sale, real and personal property, purchase or sell any securities or obligations, and otherwise exercise all the usual incidents of ownership of property necessary and convenient to the business of the Corporation.

(13) To purchase, hold, sell, or assign a qualified loan, to issue a guaranteed security, representing an interest in, or an obligation backed by, the qualified loan, and to perform all the functions and responsibilities of an agricultural mortgage marketing facility operating as a certified facility under this subchapter.

(14) To establish, acquire, and maintain affiliates (as such term is defined in section 2279aa–11(e) of this title) under applicable State laws to carry out any activities that otherwise would be performed directly by the Corporation under this subchapter.

(15) To exercise such other incidental powers as are necessary to carry out the powers, duties, and functions of the Corporation in accordance with this subchapter.

(d) Federal Reserve banks as depositaries and fiscal agents

(e) Access to book-entry system

(Pub. L. 92–181, title VIII, § 8.3, as added Pub. L. 100–233, title VII, § 702, Jan. 6, 1988, 101 Stat. 1691; amended Pub. L. 100–399, title VI, § 601(c), Aug. 17, 1988, 102 Stat. 1005; Pub. L. 102–237, title V, § 503(c), Dec. 13, 1991, 105 Stat. 1877; Pub. L. 102–552, title III, § 308(b)(1), Oct. 28, 1992, 106 Stat. 4116; Pub. L. 104–105, title I, §§ 104, 105, Feb. 10, 1996, 110 Stat. 163.)

§ 2279aa–4. Stock issuance

(a) Voting common stock

(1) Issue

(A) In general

(B) Number of votes

(i) In general

(ii) Requirements

The voting common stock shall be fairly and broadly offered to ensure that—

(I) no institution or institutions acquire a disproportionate share of the total quantity of the voting common stock outstanding of a class of stock; and(II) capital contributions and issuances of voting common stock for the contributions are fairly distributed between entities eligible to hold class A stock and class B stock.

(D) Classes of stock

(i) In general

(ii) Class A stock

(iii) Class B stock

(2) Limitation on issue

(3) Authority of Board to establish terms and procedures

(4) Transferability

(5) Maximum number of shares

(b) Required capital contributions

(1) In general

(2) Stock issued as consideration for contribution

(1) In general

(2) Reserves requirement

(3) Dividends prohibited while obligations are outstanding

(d) Nonvoting common stock

(e) Preferred stock

(1) Authority of Board

(2) Rights of preferred stock

(3) Preference on termination of business

(Pub. L. 92–181, title VIII, § 8.4, as added Pub. L. 100–233, title VII, § 702, Jan. 6, 1988, 101 Stat. 1692; amended Pub. L. 100–399, title VI, § 601(d), (e), Aug. 17, 1988, 102 Stat. 1005; Pub. L. 115–334, title V, § 5411(44), Dec. 20, 2018, 132 Stat. 4684.)

§ 2279aa–5. Certification of agricultural mortgage marketing facilities

(a) Eligibility standards

(1) Establishment required

(2) Minimum requirements

To be eligible to be certified under the standards referred to in paragraph (1), an agricultural mortgage marketing facility (other than the Corporation) shall—

(A) be an institution of the Farm Credit System or a corporation, association, or trust organized under the laws of the United States or of any State;

(B) meet or exceed capital standards established by the Board;

(C) have as one of the purposes of the facility, the sale or resale of securities representing interests in, or obligations backed by, pools of qualified loans that have been provided guarantees by the Corporation;

(D) demonstrate managerial ability with respect to agricultural mortgage loan underwriting, servicing, and marketing that is acceptable to the Corporation;

(E) adopt appropriate agricultural mortgage loan underwriting, appraisal, and servicing standards and procedures that meet or exceed the standards established by the Board;

(F) for purposes of enabling the Corporation to examine the facility, agree to allow officers or employees of the Corporation to have access to all books, accounts, financial records, reports, files, and all other papers, things, or property, of any type whatsoever, belonging to or used by the Corporation that are necessary to facilitate an examination of the operations of the facility in connection with securities, and the pools of qualified loans that back securities, for which the Corporation has provided guarantees; and

(G) adopt appropriate minimum standards and procedures relating to loan administration and disclosure to borrowers concerning the terms and rights applicable to loans for which guarantee is provided, in conformity with uniform standards established by the Corporation.

(3) Nondiscrimination requirement

(b) Certification by Corporation

(d) Revocation

(1) In general

(2) Effect of revocation

(e) Affiliation of FCS institutions with facility

(1) Establishment of affiliate authorized

(2) Exclusive agency agreement authorized

(Pub. L. 92–181, title VIII, § 8.5, as added Pub. L. 100–233, title VII, § 702, Jan. 6, 1988, 101 Stat. 1694; amended Pub. L. 104–105, title I, § 106, Feb. 10, 1996, 110 Stat. 164.)

§ 2279aa–6. Guarantee of qualified loans

(a) Guarantee authorized for certified facilities

(1) In generalSubject to the requirements of this section and on such other terms and conditions as the Corporation shall consider appropriate, the Corporation—

(A) shall guarantee the timely payment of principal and interest on the securities issued by a certified facility that represents interests solely in, or obligations fully backed by, any pool consisting solely of qualified loans which meet the applicable standards established under section 2279aa–8 of this title and which are held by such facility; and

(B) may issue a security, guaranteed as to the timely payment of principal and interest, that represents an interest solely in, or an obligation fully backed by, a pool consisting of qualified loans that—

(i) meet the applicable standards established under section 2279aa–8 of this title; and

(ii) have been purchased and held by the Corporation.

(2) Inability of facility to pay

(3) Power of Corporation

(b) Other responsibilities of and limitations on certified facilitiesAs a condition for providing any guarantees under this section for securities issued by a certified facility that represent interests in, or obligations backed by, any pool of qualified loans, the Corporation shall require such facility to agree to comply with the following requirements:

(1) Loan default resolution

(2) Subrogation of United States and Corporation to interests of facilityThe proceeds of any collateral, judgments, settlements, or guarantees received by the facility with respect to any loan in such pool, shall be applied, after payment of costs of collection—

(A) first, to reduce the amount of any principal outstanding on any obligation of the Corporation that was purchased by the Secretary of the Treasury under section 2279aa–13 of this title to the extent the proceeds of such obligation were used to make guarantees in connection with such securities; and

(B) second, to reimburse the Corporation for any such guarantee payments.

(3) Loan servicing

(4) Minority participation in public offerings

(5) No discrimination against States with borrowers rights

(c) Additional authority of BoardTo ensure the liquidity of securities for which guarantees have been provided under this section, the Board shall adopt appropriate standards regarding—

(1) the characteristics of any pool of qualified loans serving as collateral for such securities; and

(2) transfer requirements.

(d) Purchase of guaranteed securities

(1) Purchase authority

(2) Issuance of debt obligations

(3) Terms and limitations

(A) Terms

(B) Requirement

(Pub. L. 92–181, title VIII, § 8.6, as added Pub. L. 100–233, title VII, § 702, Jan. 6, 1988, 101 Stat. 1695; amended Pub. L. 100–399, title VI, § 601(f)–(h), Aug. 17, 1988, 102 Stat. 1005; Pub. L. 102–237, title V, § 503(d), Dec. 13, 1991, 105 Stat. 1877; Pub. L. 104–105, title I, §§ 107, 108(a), (c)(2), 109(a), (b)(4), Feb. 10, 1996, 110 Stat. 164, 165; Pub. L. 110–234, title V, § 5406(b), May 22, 2008, 122 Stat. 1158; Pub. L. 110–246, § 4(a), title V, § 5406(b), June 18, 2008, 122 Stat. 1664, 1920; Pub. L. 115–334, title V, § 5411(45), Dec. 20, 2018, 132 Stat. 4685.)

§ 2279aa–7. Repealed. Pub. L. 104–105, title I, § 108(b), Feb. 10, 1996, 110 Stat. 164

§ 2279aa–8. Standards for qualified loans

(a) Standards

(1) In general

(2) Supervision, examination, and report of condition

(3) Mortgage loans

(b) Minimum criteria

To further the purpose of this subchapter to provide a new source of long-term fixed rate financing to assist farmers and ranchers to purchase agricultural real estate, the standards established by the Board pursuant to subsection (a) with respect to loans secured by agricultural real estate shall, at a minimum—

(1) provide that no agricultural mortgage loan with a loan-to-value ratio in excess of 80 percent may be treated as a qualified loan;

(2) require each borrower to demonstrate sufficient cash-flow to adequately service the agricultural mortgage loan;

(3) contain sufficient documentation standards;

(4) contain adequate standards to protect the integrity of the appraisal process with respect to any agricultural mortgage loans;

(5) contain adequate standards to ensure that the farmer or rancher is or will be actively engaged in agricultural production, and require the borrower to certify to the originator that the borrower intends to continue agricultural production on the farm or ranch involved;

(6) minimize speculation in agricultural real estate for nonagricultural purposes; and

(7) in establishing the value of agricultural real estate, consider the purpose for which the real estate is taxed.

(1) In general

(2) Acreage exception

(d) Nondiscrimination requirement

(Pub. L. 92–181, title VIII, § 8.8, as added Pub. L. 100–233, title VII, § 702, Jan. 6, 1988, 101 Stat. 1700; amended Pub. L. 100–399, title VI, § 601(i), Aug. 17, 1988, 102 Stat. 1005; Pub. L. 104–105, title I, § 110, Feb. 10, 1996, 110 Stat. 165; Pub. L. 110–234, title V, § 5406(c), May 22, 2008, 122 Stat. 1158; Pub. L. 110–246, § 4(a), title V, § 5406(c), June 18, 2008, 122 Stat. 1664, 1920; Pub. L. 115–334, title V, § 5410(a), Dec. 20, 2018, 132 Stat. 4678.)

§ 2279aa–9. Exemption from restructuring and borrowers rights provisions for pooled loans

(a) Restructuring

(b) Borrowers rights

(Pub. L. 92–181, title VIII, § 8.9, as added Pub. L. 100–233, title VII, § 702, Jan. 6, 1988, 101 Stat. 1701; amended Pub. L. 100–399, title VI, § 601(j), Aug. 17, 1988, 102 Stat. 1005; Pub. L. 104–105, title II, § 208(b), Feb. 10, 1996, 110 Stat. 174; Pub. L. 115–334, title V, § 5411(46), Dec. 20, 2018, 132 Stat. 4685.)

§ 2279aa–10. Funding for guarantee; reserves of Corporation

(a) Guarantee

(b) Guarantee fees

(1) Initial fee

(2) Annual fees

(3) Determination of amount

(4) Review by GAO

(1) In general

(2) Exhaustion of reserve required

(d) Fees to cover administrative costs authorized

(Pub. L. 92–181, title VIII, § 8.10, as added Pub. L. 100–233, title VII, § 702, Jan. 6, 1988, 101 Stat. 1701; amended Pub. L. 104–316, title I, § 106(f), Oct. 19, 1996, 110 Stat. 3831.)

§ 2279aa–11. Supervision, examination, and report of condition

(a) Regulation

(1) AuthorityNotwithstanding any other provision of this chapter, the Farm Credit Administration shall have the authority to provide, acting through the Office of Secondary Market Oversight—

(A) for the examination of the Corporation and its affiliates; and

(B) for the general supervision of the safe and sound performance of the powers, functions, and duties vested in the Corporation and its affiliates by this subchapter, including through the use of the authorities granted to the Farm Credit Administration under—

(i) part C of subchapter V; and

(ii) beginning 6 months after December 13, 1991, section 2252(a)(9) of this title.

(2) ConsiderationsIn exercising its authority pursuant to this section, the Farm Credit Administration shall consider—

(A) the purposes for which the Corporation was created;

(B) the practices appropriate to the conduct of secondary markets in agricultural loans; and

(3) Office of Secondary Market Oversight

(A) Not later than 180 days after December 13, 1991, the Farm Credit Administration Board shall establish within the Farm Credit Administration the Office of Secondary Market Oversight.

(B) The Farm Credit Administration Board shall carry out the authority set forth in this section through the Office of Secondary Market Oversight.

(C) The Office of Secondary Market Oversight shall be managed by a full-time Director who shall be selected by and report to the Farm Credit Administration Board.

(b) Examinations and audits

(1) In general

(2) Frequency

(3) AccessThe examiners shall—

(A) have access to all books, accounts, financial records, reports, files, and all other papers, things, or property belonging to or in use by the Corporation and necessary to facilitate the audit; and

(B) be afforded full access for verifying transactions with certified facilities and other entities with whom the Corporation conducts transactions.

(d) FCA assessments to cover costs

(e) “Affiliate” defined

(f) Employees and personnelThe Farm Credit Administration Board shall ensure that—

(1) the Office of Secondary Market Oversight has access to a sufficient number of qualified and trained employees to adequately supervise the secondary market activities of the Corporation; and

(2) the supervision of the powers, functions, and duties of the Corporation is performed, to the extent practicable, by personnel who are not responsible for the supervision of the banks and associations of the Farm Credit System.

(Pub. L. 92–181, title VIII, § 8.11, as added Pub. L. 100–233, title VII, § 702, Jan. 6, 1988, 101 Stat. 1702; amended Pub. L. 101–624, title XVIII, § 1840, Nov. 28, 1990, 104 Stat. 3835; Pub. L. 102–237, title V, § 503(a), Dec. 13, 1991, 105 Stat. 1870; Pub. L. 102–552, title III, § 308(b)(2), Oct. 28, 1992, 106 Stat. 4116; Pub. L. 104–105, title I, § 111, Feb. 10, 1996, 110 Stat. 165; Pub. L. 115–334, title V, § 5411(47), Dec. 20, 2018, 132 Stat. 4685.)

§ 2279aa–12. Securities in credit enhanced pools

(a) Federal laws

(1) Applicability of certain Federal securities laws

(2) No full faith and credit of the United States

(b) State securities laws

(1) General exemption

(2) State override

The provisions of paragraph (1) shall not be applicable to any State that, during the 8-year period beginning on January 6, 1988, enacts a law that—

(A) specifically refers to this subsection; and

(B) expressly provides that paragraph (1) shall not apply to the State.

(1) In general

(2) State limitations on purchase, holding, or investment

(3) Nonapplicability of provisions

(A) Subsequent State law

(B) Effect of subsequent State law

(d) State usury laws superseded

A provision of the Constitution or law of any State shall not apply to an agricultural loan made by an originator or a certified facility in accordance with this subchapter for sale to the Corporation or to a certified facility for inclusion in a pool for which the Corporation has provided, or has committed to provide, a guarantee, if the loan, not later than 180 days after the date the loan was made, is sold to the Corporation or included in a pool for which the Corporation has provided a guarantee, if the provision—

(1) limits the rate or amount of interest, discount points, finance charges, or other charges that may be charged, taken, received, or reserved by an agricultural lender or a certified facility; or

(2) limits or prohibits a prepayment penalty (either fixed or declining), yield maintenance, or make-whole payment that may be charged, taken, or received by an agricultural lender or a certified facility in connection with the full or partial payment of the principal amount due on a loan by a borrower in advance of the scheduled date for the payment under the terms of the loan, otherwise known as a prepayment of the loan principal.

(Pub. L. 92–181, title VIII, § 8.12, as added Pub. L. 100–233, title VII, § 702, Jan. 6, 1988, 101 Stat. 1703; amended Pub. L. 100–399, title VI, § 601(k), (l), Aug. 17, 1988, 102 Stat. 1006; Pub. L. 104–105, title I, § 112, Feb. 10, 1996, 110 Stat. 165.)

§ 2279aa–13. Authority to issue obligations to cover guarantee losses of Corporation

(a) Sale of obligations to Treasury

(1) In general

(2) Certification

The Secretary of the Treasury may purchase obligations of the Corporation under paragraph (1) only if the Corporation certifies to the Secretary that—

(A) the requirements of section 2279aa–10(c) of this title have been fulfilled; and

(B) the proceeds of the sale of such obligations are needed to fulfill the obligations of the Corporation under any guarantee provided by the Corporation under this subchapter.

(b) Expeditious transaction required

(d) Terms of obligation

(1) Interest

(2) Redemption

(e) Coordination with title 31

(1) Authority to use proceeds from sale of Treasury securities

(2) Treatment of transactions

(f) Authorization of appropriations

(Pub. L. 92–181, title VIII, § 8.13, as added Pub. L. 100–233, title VII, § 702, Jan. 6, 1988, 101 Stat. 1704; amended Pub. L. 104–105, title I, § 109(b)(2), Feb. 10, 1996, 110 Stat. 165.)

§ 2279aa–14. Federal jurisdictionNotwithstanding section 1349 of title 28 or any other provision of law:

(1) The Corporation shall be considered an agency under sections 1345 and 1442 of such title.

(2) All civil actions to which the Corporation is a party shall be deemed to arise under the laws of the United States and, to the extent applicable, shall be deemed to be governed by Federal common law. The district courts of the United States shall have original jurisdiction of all such actions, without regard to amount of value.

(3) Any civil or other action, case, or controversy in a court of a State or any court, other than a district court of the United States, to which the Corporation is a party may at any time before trial be removed by the Corporation, without the giving of any bond or security—

(A) to the District Court of the United States for the district and division embracing the place where the same is pending; or

(B) if there is no such district court, to the District Court of the United States for the district in which the principal office of the Corporation is located;

by following any procedure for removal for causes in effect at the time of such removal.

(4) No attachment or execution shall be issued against the Corporation or any of the property of the Corporation before final judgment in any Federal, State, or other court.

(Pub. L. 92–181, title VIII, § 8.14, as added Pub. L. 100–233, title VII, § 702, Jan. 6, 1988, 101 Stat. 1705.)