§2124 Stock of banks for cooperatives

Summary

Each bank’s board decides how much capital stock the bank needs to meet borrowers’ credit needs and can raise or lower that amount over time. Stock is sold in $100 shares (fractional shares allowed) and can be split into classes the board chooses. Voting stock can only go to eligible cooperative borrowers, other eligible groups listed in sections 2128 and 2129 as the board allows, or to other cooperative banks. Voting stock can’t be transferred, pledged, or used as collateral unless the issuing bank agrees under Farm Credit Administration rules. Each eligible holder of voting stock gets only one vote, and that vote applies only to the bank where the holder’s main office is, unless FCA rules say otherwise. If the holder has not borrowed from that bank in the two years before the voting date set by the FCA, it cannot vote. The board can create nonvoting investment stock in series and amounts it decides; that stock can be turned into voting stock or sold or transferred with the issuing bank’s approval. Participation certificates may be issued to people who cannot hold voting stock.