§2277a–14 Prohibitions

Summary

It is illegal for anyone to use the name "Farm Credit System Insurance Corporation" or similar words so people think they are connected to the Corporation. It is also illegal to say, in any way, that a person’s notes, bonds, or other obligations are insured or guaranteed by the Corporation when they are not, or for an insured System bank to misstate how its obligations are insured. Anyone who willfully breaks these rules can be fined up to $1,000, jailed up to 1 year, or both. An insured System bank may not pay dividends, interest paid only from profits, or give out capital while it is behind on premiums to the Corporation. Directors or officers who knowingly allow such payments face the same $1,000 fine and up to 1 year in jail. A bank that willfully refuses to file required statements or pay premiums can be fined $100 for each day the violation continues. These payment and filing rules do not apply if the bank and the Corporation are disputing the premium and the bank has put up security the Corporation accepts. Anyone convicted of a crime involving dishonesty or breach of trust may not serve as a director, officer, or employee of a System institution without prior written permission from the Farm Credit Administration, and institutions that allow it face $100 per day fines. The Corporation may not use money from its administrative accounts or the Insurance Fund to help or support the Federal Agricultural Mortgage Corporation.