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Title 12, Banks and BankingRelease 119-73not60

§2279aa–11 Supervision, Examination, and Report of Condition

Title 12 › Chapter 23— FARM CREDIT SYSTEM › Subchapter VIII— AGRICULTURAL MORTGAGE SECONDARY MARKET › Part A— Establishment and Activities of Federal Agricultural Mortgage Corporation › § 2279aa–11

Last updated Apr 3, 2026|Official source

Summary

The Farm Credit Administration must examine and oversee the Corporation and its affiliates by using an Office of Secondary Market Oversight. The Administration can use its existing powers under part C of subchapter V and, starting 6 months after December 13, 1991, under section 2252(a)(9). When it acts, the Administration must keep in mind why the Corporation was created, proper practices for agricultural loan secondary markets, and that well‑structured deals carry less risk. Within 180 days after December 13, 1991, the Farm Credit Administration Board must create the Office, run the work through it, and pick a full‑time Director who reports to the Board. Financial transactions must be examined by FCA examiners under commercial rules at times the Board sets, but at least once a year. Examiners get full access to books and can verify transactions with counterparties. The Corporation must publish an annual report with GAAP financial statements audited by an independent accountant. The FCA will charge the Corporation for supervision costs. An “affiliate” means an entity the Corporation controls or owns, but not an originator (see section 2279aa). The Board must make sure the Office has enough trained staff and, when possible, use staff who do not also supervise the Farm Credit System’s banks and associations.

Full Legal Text

Title 12, §2279aa–11

Banks and Banking, Source: USLM XML via OLRC

(a)(1)Notwithstanding any other provision of this chapter, the Farm Credit Administration shall have the authority to provide, acting through the Office of Secondary Market Oversight—
(A)for the examination of the Corporation and its affiliates; and
(B)for the general supervision of the safe and sound performance of the powers, functions, and duties vested in the Corporation and its affiliates by this subchapter, including through the use of the authorities granted to the Farm Credit Administration under—
(i)part C of subchapter V; and
(ii)beginning 6 months after December 13, 1991, section 2252(a)(9) of this title.
(2)In exercising its authority pursuant to this section, the Farm Credit Administration shall consider—
(A)the purposes for which the Corporation was created;
(B)the practices appropriate to the conduct of secondary markets in agricultural loans; and
(C)the reduced levels of risk associated with appropriately structured secondary market transactions.
(3)(A)Not later than 180 days after December 13, 1991, the Farm Credit Administration Board shall establish within the Farm Credit Administration the Office of Secondary Market Oversight.
(B)The Farm Credit Administration Board shall carry out the authority set forth in this section through the Office of Secondary Market Oversight.
(C)The Office of Secondary Market Oversight shall be managed by a full-time Director who shall be selected by and report to the Farm Credit Administration Board.
(b)(1)The financial transactions of the Corporation shall be examined by examiners of the Farm Credit Administration in accordance with the principles and procedures applicable to commercial corporate transactions under such rules and regulations as may be prescribed by the Administration.
(2)The examinations shall occur at such times as the Farm Credit Administration Board may determine, but in no event less than once each year.
(3)The examiners shall—
(A)have access to all books, accounts, financial records, reports, files, and all other papers, things, or property belonging to or in use by the Corporation and necessary to facilitate the audit; and
(B)be afforded full access for verifying transactions with certified facilities and other entities with whom the Corporation conducts transactions.
(c)The Corporation shall make and publish an annual report of condition as prescribed by the Farm Credit Administration. Each report shall contain financial statements prepared in accordance with generally accepted accounting principles and contain such additional information as the Farm Credit Administration may by regulation prescribe. The financial statements of the Corporation shall be audited by an independent public accountant.
(d)The Farm Credit Administration shall assess the Corporation for the cost to the Administration of any regulatory activities conducted under this section, including the cost of any examination.
(e)As used in this subchapter, the term “affiliate” shall mean an entity effectively controlled or owned by the Corporation, except that such term shall not include an originator (as defined in section 2279aa of this title).
(f)The Farm Credit Administration Board shall ensure that—
(1)the Office of Secondary Market Oversight has access to a sufficient number of qualified and trained employees to adequately supervise the secondary market activities of the Corporation; and
(2)the supervision of the powers, functions, and duties of the Corporation is performed, to the extent practicable, by personnel who are not responsible for the supervision of the banks and associations of the Farm Credit System.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Amendments

2018—Subsec. (e). Pub. L. 115–334 substituted “2279aa of this title)” for “2279aa(7) of this title)”. 1996—Subsec. (e). Pub. L. 104–105 substituted “section 2279aa(7) of this title” for “paragraphs (3) and (7), respectively, of section 2279aa of this title” and struck out “a certified facility or” before “an originator”. 1992—Subsec. (a)(1)(B)(ii). Pub. L. 102–552 substituted “December 13, 1991” for “the date of enactment of this section”. 1991—Subsec. (a)(1). Pub. L. 102–237, § 503(a)(1), amended par. (1) generally. Prior to amendment, par. (1) read as follows: “Notwithstanding any other provision of this chapter, the Farm Credit Administration shall have the authority to— “(A) provide for the examination of the condition of the Corporation and its affiliates; and “(B) provide for the general supervision of the safe and sound performance of the powers, functions, and duties vested in the Corporation and its affiliates by this subchapter, including through the use of the

Enforcement

powers of the Farm Credit Administration under part C of subchapter V of this chapter.” Subsec. (a)(3). Pub. L. 102–237, § 503(a)(2), added par. (3). Subsec. (f). Pub. L. 102–237, § 503(a)(3), added subsec. (f). 1990—Subsec. (a)(1). Pub. L. 101–624, § 1840(1), amended par. (1) generally. Prior to amendment, par. (1) read as follows: “Notwithstanding any other provision of this chapter, the regulatory authority of the Farm Credit Administration with respect to the Corporation shall be confined to— “(A) providing for the examination of the condition of the Corporation; and “(B) providing for the general supervision of the safe and sound performance of the powers, functions, and duties vested in the Corporation by this subchapter, including through the use of the

Enforcement

powers of the Farm Credit Administration under part C of subchapter V of this chapter.” Subsec. (e). Pub. L. 101–624, § 1840(2), added subsec. (e).

Reference

Citations & Metadata

Citation

12 U.S.C. § 2279aa–11

Title 12, Banks and Banking

Last Updated

Apr 3, 2026

Release point: 119-73not60