§2277a–14 Prohibitions

Summary

No one may pretend to be connected with the Farm Credit System Insurance Corporation or use its name to make people think there is a link. No person or company may falsely say their bonds, notes, or other debt are insured or guaranteed by the Corporation, and an insured Farm Credit bank may not mislead buyers about how its obligations are insured. Willfully doing any of these things can lead to a fine of up to $1,000, up to 1 year in jail, or both. A Farm Credit bank that is in default on premium payments to the Corporation must not pay dividends, make profit-only interest payments on certain capital notes or debentures, or distribute capital assets while the default continues. Directors or officers who knowingly allow such payments face the same $1,000 fine and 1-year jail penalty. If a bank willfully refuses to file required certified statements or pay premiums, it may be fined $100 per day, which the Corporation can collect and use. These payment rules do not apply when the parties are disputing the premium amount and the bank has posted security the Corporation accepts to cover the final payment. Anyone convicted of a crime involving dishonesty or a breach of trust cannot serve as a director, officer, or employee of a System institution unless the Farm Credit Administration gives prior written permission; violating institutions face $100 per day fines. The Corporation may not use administrative account money or the Insurance Fund to help or support the Federal Agricultural Mortgage Corporation.