§2183 Dissolution; voluntary or involuntary liquidation; mergers; receiverships or conservators

Summary

No Farm Credit System institution can go into voluntary liquidation unless the Farm Credit Administration (FCA) agrees, and then it must follow FCA rules. If an association liquidates voluntarily, the rules must tell the supervising bank to act to reduce harm to borrowers whose loans are bought or moved to another System institution. The FCA Board can also require an association to merge with another if, with the supervising bank’s board agreeing, the association has failed to meet its obligations or to run its operations properly under the law. The FCA Board can name a conservator or receiver for an institution when problems exist, such as insolvency (assets less than what is owed), big losses from illegal or unsafe practices, unsafe business conditions, willful violation of a final cease-and-desist order, hiding or refusing to give records, or failure to pay principal or interest on insured obligations. The FCA Board has the only authority to make that appointment. After the five-year period beginning January 6, 1988, the Farm Credit System Insurance Corporation serves as the conservator or receiver. The Board may appoint one without notice, but the institution has 30 days to ask the U.S. District Court where its main office is, or the U.S. District Court for the District of Columbia, to remove the conservator or receiver. While that removal case is pending, other enforcement actions against the institution are paused.