US Code

Public Law 119-73 (01/23/2026)

12 U.S.C. § 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)
section 2202b of this title to cancel borrower stock at par value under ; 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), the par value of borrower stock frozen in such liquidation.
(c)

Inability to retire stock at par value

(1)

In general

If an institution is unable to retire eligible borrower stock at par value due to the liquidation of the institution, the Farm Credit System Insurance Corporation, acting as receiver, shall retire such stock at par value as would have been retired in the ordinary course of business of the institution.

(2)

Funding

The Farm Credit System Insurance Corporation shall use such funds from the Farm Credit Insurance Fund as are sufficient to carry out this section.

(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 ;
(B)
is issued or allocated after , but prior to the earlier of—
(i)
section 2154a of this title 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 ; or
(ii)
the date that is 9 months after ;
(C)
was, after , but before , 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 , but before .
(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, § 4Pub. L. 100–233, title I, § 101101 Stat. 1572Pub. L. 100–399, title I, § 101(b)102 Stat. 989Pub. L. 115–334, title V, § 5411(20)132 Stat. 4681(.9A, as added , , ; amended –(d), , ; , , .)

Editorial Notes

Prior Provisions

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§ 101(a)A prior section 4.9A of , which authorized a central reserve for Farm Credit System, was classified to and was repealed by .

Amendments

Pub. L. 115–3342018—Subsec. (c). inserted par. (1) designation and heading before “If an institution”, substituted “the Farm Credit System Insurance Corporation, acting as receiver,” for “the receiver of the institution” and “business of the institution.” for “business of the institution, and—”, added par. (2), and struck out former pars. (1) and (2) which read as follows:

“(1) during the 5-year period beginning on , 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.”

Pub. L. 100–399, § 101(b)1988—Subsec. (a). , 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.

Pub. L. 100–399, § 101(c)Subsec. (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.”

Pub. L. 100–399, § 101(d)section 2154a of this titleSubsec. (d)(2)(B). , 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 “” for “section 4.9B”.

Statutory Notes and Related Subsidiaries

Effective Date of 1988 Amendment

Pub. L. 100–399Pub. L. 100–233section 1001(a) of Pub. L. 100–399section 2002 of this titleAmendment by effective as if enacted immediately after enactment of , which was approved , see , set out as a note under .