§2279f Merger of similar banks

Summary

Banks under this chapter may merge with banks in other districts under the same subchapter if several approvals are met. The Farm Credit Administration Board must approve. Each bank’s board must approve. A majority of the stockholders who vote at a proper meeting must approve, with each association’s votes equal to its number of voting stockholders. For a bank for cooperatives, a majority of the total equity interests voting (including allocated, but not unallocated, surplus and reserves) must approve. Sections 2279a–2 and 2279a–3 of this title apply to merged banks. After the merger, a new board of directors must be set up. Each former bank’s board elects two directors, and at least one director from each bank must be chosen by eligible stockholders or guaranty-fund subscribers. Those directors then elect one outside director. The outside director must have experience in financial services and credit and, for the 2-year period before election, must not have been a borrower, shareholder, or officer, director, employee, or agent of any Farm Credit System institution. If the board fails to pick an outside director, the Farm Credit Administration Board will appoint a qualified person until the board elects one. With Farm Credit Administration approval, the merged bank’s bylaws can set a different board size or selection method, but they must include at least one outside director.