§2015 Lending Authority

Summary

Farm Credit Banks may make or join in long-term real estate mortgage loans in rural areas or to people who produce or harvest aquatic products. They can promise to make these loans for terms of at least 5 years and no more than 40 years. They can also help Federal land bank associations by buying or discounting notes or other obligations the association guaranteed when the money was used for eligible borrowers and purposes. Farm Credit Banks can also lend to or buy obligations from production credit associations and other banks and agricultural lenders that make loans to farmers, ranchers, or aquatic producers. They may partner with other Farm Credit System institutions on such loans. A bank may not buy paper or make loans if doing so would push the borrower’s direct and contingent liabilities above ten times its paid-in and unimpaired capital and surplus, or above the legal limit where it was created—whichever is lower. A national bank that is already indebted under these purchases may not take on more debt if that would break this limit. The Farm Credit Administration will make rules for these transactions, including any needed collateral, allowing reasonable fees, treating an institution and its affiliates as one for limits, and ensuring services are available to lenders that mainly do agricultural or aquatic lending, need extra funds, have limited access to big capital markets, and will not use the funds for other purposes. Existing discount relationships on December 24, 1980, do not have to end.