12 U.S.C. § 2160: Federal Farm Credit Banks…

Summary

Creates the Federal Farm Credit Banks Funding Corporation as part of the Farm Credit System and gives it the job of issuing, marketing, and handling the System banks’ debt and moving funds between banks. The Corporation must set amounts, maturities, interest rates, terms, and how each bank takes part in joint, consolidated, or System-wide sales of debt, but those choices need approval from the Farm Credit Administration. The Corporation also keeps the other powers the old funding corporation had before January 6, 1988. The board may name officers and form committees, and a committee can act for the board when issuing System debt. The board has nine voting members and one nonvoting member. Four voting members are current or former System bank directors chosen by the Corporation’s shareholders. Three voting members are System bank chief executives or presidents chosen by the shareholders. Two voting members are appointed by the elected members after getting recommendations and consulting the Secretary of the Treasury and the Chairman of the Federal Reserve; those appointees must be U.S. citizens who are not borrowers, shareholders, employees, agents, or affiliated with the Farm Credit Administration, are not active with organizations that sell System-wide securities, and who have experience in corporate or public finance, agricultural economics, and financial reporting. The Corporation’s president is the nonvoting member. The Corporation automatically takes over all assets, debts, contracts, instruments, and stock of the predecessor funding corporation (including stock issued before January 6, 1988) without any extra action, and those changes are not treated as taxable events under state or local law.

Title 12, §2160

Banks and Banking, Source: USLM XML via OLRC

(a)Establishment

There is hereby established the Federal Farm Credit Banks Funding Corporation (hereinafter in this section referred to as the “Corporation”), which shall be an institution of the Farm Credit System.

(b)Duties

The Corporation—

(1)shall issue, market, and handle the obligations of the banks of the Farm Credit System, and interbank or intersystem flow of funds as may from time to time be required;

(2)acting for the banks of the Farm Credit System, subject to approval of the Farm Credit Administration, shall determine the amount, maturities, rates of interest, terms, and conditions of participation by the several banks in each issue of joint, consolidated, or System-wide obligations; and

(3)shall exercise such other powers as were provided to the predecessor Federal Farm Credit Banks Funding Corporation in accordance with its charter issued under section 2211 of this title, in effect immediately before January 6, 1988.

(c)Officers and committees

(1)Designation

The board of directors may designate such officers and committees for such terms and such purposes as may be agreed on by the board.

(2)Issuance of obligations

When appropriate to the board’s functions under this section, a committee of the board of directors of the Corporation, or representatives thereof, may act on behalf of the board in connection with the issuance of joint, consolidated, and System-wide obligations.

(d)Board of directors

(1)Composition

The board of directors shall be composed of nine voting members and one nonvoting member, as follows:

(A)Four voting members shall be current or former directors of the System banks elected by the shareholders of the Corporation.

(B)Three voting members shall be chief executive officers or presidents of System banks elected by the shareholders of the Corporation.

(C)Two voting members shall be appointed by the members elected under subparagraphs (A) and (B) after the elected members have received recommendations for such appointments from, and consulted with, the Secretary of the Treasury and the Chairman of the Board of Governors of the Federal Reserve System. The appointed members shall be selected from United States citizens—

(i)who are not borrowers from, shareholders in, or employees or agents of any System institution, who are not affiliated with the Farm Credit Administration, and who are not actively engaged with a bank or investment organization that is a member of the Corporation’s selling group for System-wide securities; and

(ii)who are experienced or knowledgeable in corporate and public finance, agricultural economics, and financial reporting and disclosure.

(D)The president of the Corporation shall serve as a nonvoting member of the board.

(2)Considerations

In selecting candidates under subparagraphs (A) and (B) of paragraph (1), due consideration shall be given to choosing individuals knowledgeable in agricultural economics, public and corporate finance, and financial reporting and disclosure.

(3)Representation of board

The Farm Credit System Insurance Corporation shall not have representation on the board of directors of the Corporation.

(e)Succession

(1)Assets and liabilities

The Corporation shall, by operation of law and without any further action by the Farm Credit Administration, the predecessor Federal Farm Credit Banks Funding Corporation (hereinafter referred to in this subsection as “the predecessor corporation”) chartered under this chapter, or any court, succeed to the assets of and assume all debts, obligations, contracts, and other liabilities of the predecessor corporation, matured or unmatured, accrued, absolute, contingent or otherwise, and whether or not reflected or reserved against on balance sheets, books of account, or records of the predecessor corporation.

(2)Contracts

The existing contractual obligations, security instruments, and title instruments of the predecessor corporation shall, by operation of law and without any further action by the Farm Credit Administration, the predecessor corporation, or any court, become and be converted into obligations, entitlements, and instruments of the Corporation.

(3)Stock

The stock of the predecessor corporation issued before January 6, 1988, shall, by operation of law and without any further action by the Farm Credit Administration, the predecessor corporation, or any court, become and be converted into stock of the Corporation established by this section.

(4)Taxation

The succession to assets, assumption of liabilities, conversion of obligations, instruments, and stock, and effectuation of any other transaction by the Corporation to carry out this subsection shall not be treated as a taxable event under the laws of any State or political subdivision thereof.

Notes & Related Subsidiaries

Editorial Notes

References in Text

January 6, 1988, referred to in subsec. (e)(3), was in the original “the date of the enactment of this section”, which was translated as meaning the date of enactment of Pub. L. 100–233, which amended this section generally, to reflect the probable intent of Congress.

Amendments

Subsec. (d)(2). Pub. L. 115–334, § 5411(19)(A), designated concluding provisions of subsec. (d)(1) as par. (2), inserted heading, inserted “of paragraph (1)” after “(A) and (B)”, and struck out former par. (2) which related to Assistance Board non-voting representatives and post-termination representation on the board of directors of the Corporation. Subsec. (d)(3). Pub. L. 115–334, § 5411(19)(A)(i), added par. (3). Subsecs. (e), (f). Pub. L. 115–334, § 5411(19)(B), (C), redesignated subsec. (f) as (e) and struck out former subsec. (e) which set out transitional authority until a majority of the voting members of the board of directors of the Corporation was elected. 1992—Subsec. (d)(2). Pub. L. 102–552 amended par. (2) generally. Prior to amendment, par. (2) read as follows: “(A) Assistance board.—During the period in which the Assistance Board is in existence, the board of directors of the Assistance Board shall designate one of its directors to serve as a nonvoting representative to the board of directors of the Corporation. “(B) Insurance corporation.—After such period, the board of directors of the Farm Credit System Insurance Corporation may designate one of its directors to serve as a nonvoting representative to the board of directors of the Corporation. “(C) Meetings.—The persons so designated by the Assistance Board and by the Farm Credit System Insurance Corporation may attend and participate in all deliberations of the board of directors of the Corporation.” 1988—Pub. L. 100–233 amended section generally. Prior to amendment, section read as follows: “A fiscal agency shall be established by the banks for such of their functions relating to the issuance, marketing, and handling of their obligations, and interbank or intersystem flow of funds as may from time to time be required.” Subsec. (b)(3). Pub. L. 100–399, § 203(b), inserted “predecessor Federal Farm Credit Banks” before “Funding Corporation”. Subsec. (d)(2)(B), (C). Pub. L. 100–399, § 203(c), substituted “directors of the Corporation” for “directors of the Federal Farm Credit Banks Funding Corporation”. Subsec. (e). Pub. L. 100–399, § 203(d), amended subsec. (e) generally. Prior to amendment, subsec. (e) read as follows: “Until a quorum of the board of directors of the Corporation is elected or appointed, the finance committee established under section 2156 of this title in effect before

January 6, 1988, and the fiscal agency established under section 2160 of this title in effect before

January 6, 1988, shall continue to operate as if this section had not been enacted.” Subsec. (f). Pub. L. 100–399, § 203(a), added subsec. (f).

Statutory Notes and Related Subsidiaries

Effective Date

of 1988 AmendmentAmendment by Pub. L. 100–399 effective as if enacted immediately after enactment of Pub. L. 100–233, which was approved Jan. 6, 1988, see section 1001(a) of Pub. L. 100–399, set out as a note under section 2002 of this title.

§2160 Federal Farm Credit Banks Funding Corporation