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Title 12 — Banks and BankingRelease 119-73

§2016 Interest rates and other charges

Title 12 › Chapter CHAPTER 23— - FARM CREDIT SYSTEM › Subchapter SUBCHAPTER I— - FARM CREDIT BANKS › § 2016

Last updated Apr 6, 2026|Official source

Summary

The Farm Credit Bank's board of directors sets the interest and discount rates and the rules for its loans and discounts. The board can change those rates and terms over time. When choosing rates and fees, the board must try to give eligible borrowers the credit they need at the lowest reasonable cost while keeping the bank financially sound. It must consider the bank’s cost of funds, required reserves, the bank and its associations’ expenses, and services to members. Loan papers can allow interest rates to change during the repayment period.

Full Legal Text

Title 12, §2016

Banks and Banking — Source: USLM XML via OLRC

(a)Loans and discounts made by a Farm Credit Bank shall bear such rate or rates of interest or discount, and be on such terms and conditions, as may be determined by the board of directors of the bank from time to time.
(b)In setting rates and charges, it shall be the objective to provide the types of credit needed by eligible borrowers at the lowest reasonable costs on a sound business basis taking into consideration the cost of money to the bank, necessary reserve and expenses of the bank and associations, and providing services to members. The loan documents or discounting and financing agreements, may provide for the interest rate or rates to vary from time to time during the repayment period of the loan or agreement.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

A prior section 2016, Pub. L. 92–181, title I, § 1.8, Dec. 10, 1971, 85 Stat. 586; Pub. L. 96–592, title I, § 105, Dec. 24, 1980, 94 Stat. 3438, related to eligibility, prior to the general amendment of this subchapter by Pub. L. 100–233, § 401.

Amendments

1988—Subsec. (a). Pub. L. 100–399 substituted “such rate or rates of interest or discount, and be” for “interest at a rate or rates, and”.

Statutory Notes and Related Subsidiaries

Effective Date

of 1988 AmendmentAmendment by 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, see section 1001(b) of Pub. L. 100–399, set out as a note under section 2002 of this title.

Effective Date

Pub. L. 100–233, title IV, § 401, Jan. 6, 1988, 101 Stat. 1622, provided that this section is effective 6 months after Jan. 6, 1988.

Reference

Citations & Metadata

Citation

12 U.S.C. § 2016

Title 12 — Banks and Banking

Last Updated

Apr 6, 2026

Release point: 119-73