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Title 12 — Banks and BankingRelease 119-73not60

§2124 Stock of Banks for Cooperatives

Title 12 › Chapter 23— FARM CREDIT SYSTEM › Subchapter III— BANKS FOR COOPERATIVES › Part A— Banks for Cooperatives › § 2124

Last updated Apr 3, 2026|Official source

Summary

Banks for cooperatives must have whatever amount of capital stock the bank’s board of directors thinks is needed to meet borrowers’ credit needs. The board can raise or lower that amount over time. The stock is split into $100 par-value shares, which can be fractional and put into classes the board chooses. Only certain borrowers and other cooperative banks can hold voting stock, as set by the board and the rules in other laws. A voting-stock holder gets one vote and can vote only in the bank for its district, and only if it has borrowed from that bank within the two years before the voting date set by the Farm Credit Administration. Voting stock cannot be transferred, pledged, or used as collateral except with the issuing bank’s consent under Farm Credit Administration rules. The bank can also issue nonvoting investment stock (and trade it for voting stock with bank approval) and can give participation certificates to people who cannot hold voting stock.

Full Legal Text

Title 12, §2124

Banks and Banking — Source: USLM XML via OLRC

(a)The Capital stock of each bank for cooperatives shall be in such amount as its board determines is required for the purpose of providing adequate capital to permit the bank to meet the credit needs of borrowers from the bank and such amounts may be increased or decreased from time to time in accordance with such needs.
(b)The capital stock of each bank shall be divided into shares of par value of $100 each and may be of such classes as the board may determine. Such stock may be issued in fractional shares.
(c)Voting stock may be issued or transferred to and held only by (i) cooperative associations eligible to borrow from the banks 11 So in original. There probably should be a semicolon after “banks”. (ii) other categories of persons and entities described in section 2128 and 2129 of this title eligible to borrow from the bank, as determined by the bank’s board of directors; and (iii) other banks for cooperatives, and shall not be otherwise transferred, pledged, or hypothecated except as consented to by the issuing bank under regulations of the Farm Credit Administration.
(d)Each holder of one or more shares of voting stock which is eligible to borrow from a bank for cooperatives shall be entitled only to one vote and only in the affairs of the bank in the district in which its principal office is located unless otherwise authorized under regulations issued by the Farm Credit Administration, except that if such holder has not been a borrower from the bank in which it holds such stock within a period of two years next preceding the date fixed by the Farm Credit Administration prior to the commencement of voting, it shall not be entitled to vote.
(e)Nonvoting investment stock may be issued in such series and in such amounts as may be determined by the board and may be exchanged for voting stock or sold or transferred to any person subject to the approval of the issuing bank.
(f)Participation certificates may be issued to parties to whom voting stock may not be issued.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Codification Pub. L. 110–234 and Pub. L. 110–246 made identical

Amendments

to this section. The

Amendments

by Pub. L. 110–234 were repealed by section 4(a) of Pub. L. 110–246.

Amendments

2008—Subsec. (b). Pub. L. 110–246, § 5402, which directed substitution of “par” for “per”, could not be executed because “per” did not appear. Subsec. (c)(ii), (iii). Pub. L. 110–246, § 5403(a), added cl. (ii) and redesignated former cl. (ii) as (iii). 1988—Subsec. (a). Pub. L. 100–233, § 802(o)(1), struck out “, with the approval of Farm Credit Administration,” after “board determines”. Subsec. (b). Pub. L. 100–233, § 802(o)(2), struck out “with the approval of the Farm Credit Administration” after “board may determine”. Subsec. (d). Pub. L. 100–233, § 805(k), substituted “by” for “by by” after “

Regulations

issued”. Subsec. (e). Pub. L. 100–233, § 802(o)(3), struck out “and approved by the Farm Credit Administration” after “Board”. 1985—Subsec. (d). Pub. L. 99–205, § 205(e)(3), inserted “under

Regulations

issued by” after “authorized”. Subsec. (e). Pub. L. 99–205, § 205(e)(4), struck out “, except for stock held by the Governor,” before “may be exchanged”. 1980—Subsec. (f). Pub. L. 96–592 added subsec. (f).

Statutory Notes and Related Subsidiaries

Effective Date

of 2008 AmendmentAmendment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, see section 4 of Pub. L. 110–246, set out as an

Effective Date

note under section 8701 of Title 7, Agriculture.

Effective Date

of 1985 AmendmentAmendment by Pub. L. 99–205 effective thirty days after Dec. 23, 1985, see section 401 of Pub. L. 99–205, set out as a note under section 2001 of this title.

Reference

Citations & Metadata

Citation

12 U.S.C. § 2124

Title 12 — Banks and Banking

Last Updated

Apr 3, 2026

Release point: 119-73not60