Title 12, Banks and BankingRelease 119-110

§2277a–10a Oversight Actions by Corporation

Title 12 › CHAPTER 23 — FARM CREDIT SYSTEM › SUBCHAPTER V — FARM CREDIT ADMINISTRATION ORGANIZATION › Part E — Farm Credit System Insurance Corporation › § 2277a–10a

Last updated Sep 22, 2026|Official source

Summary

Defines "institution" and requires the Farm Credit Administration (FCA) to work with the Farm Credit System Insurance Corporation before approving certain actions by banks that do not meet capital rules. "Institution" means an insured System bank or a production credit association (or similar lender) whose direct loan to its funding bank is 20 percent or more of that bank’s total loan volume, excluding nonaccrual loans. The FCA must consult the Corporation before approving an insured obligation issued by, on behalf of, or participated in by any insured System bank that fails to meet minimum capital levels. When the FCA gets an application for a merger or restructuring, it must send a copy to the Corporation. If the merger or restructuring involves an institution that fails to meet capital requirements, the Corporation has 30 days to send its views and any recommended conditions. The FCA must seriously consider the Corporation’s views before deciding.

Full Legal Text

Title 12, §2277a–10a

Banks and Banking, Source: USLM XML via OLRC

(a)“Institution” defined

In this section, the term “institution” means—

(1)an insured System bank; and

(2)a production credit association or other association making loans under section 2279b of this title with a direct loan payable to the funding bank of the association that comprises 20 percent or more of the funding bank’s total loan volume net of nonaccrual loans.

(b)Consultation regarding participation of undercapitalized banks in issuance of insured obligations

The Farm Credit Administration shall consult with the Corporation prior to approving an insured obligation that is to be issued by or on behalf of, or participated in by, any insured System bank that fails to meet the minimum level for any capital requirement established by the Farm Credit Administration for the bank.

(c)Consultation regarding applications for mergers and restructurings

(1)Corporation to receive copy of transaction applications

On receiving an application for a merger or restructuring of an institution, the Farm Credit Administration shall forward a copy of the application to the Corporation.

(2)Consultation required

If the proposed merger or restructuring involves an institution that fails to meet the minimum level for any capital requirement established by the Farm Credit Administration applicable to the institution, the Farm Credit Administration shall allow 30 days within which the Corporation may submit the views and recommendations of the Corporation, including any conditions for approval. In determining whether to approve or disapprove any proposed merger or restructuring, the Farm Credit Administration shall give due consideration to the views and recommendations of the Corporation.

Reference

Citations & Metadata

Citation

12 U.S.C. § 2277a–10a

Title 12, Banks and Banking

Last Updated

Sep 22, 2026

Release point: 119-110