12 U.S.C. § 2279aa–5: Certification of…

Summary

The Corporation must issue rules within 120 days after the permanent board first meets with a quorum. The rules set who can be certified as an agricultural mortgage marketing facility (not the Corporation itself). To be eligible, a facility must be a Farm Credit System institution or a U.S./state legal entity; meet capital levels set by the Board; have a purpose of selling securities backed by pools of loans the Corporation guarantees; show it can manage underwriting, servicing, and marketing of farm mortgage loans; use underwriting, appraisal, and servicing procedures that meet Board standards; let Corporation examiners access records needed to review the facility’s securities and loan pools the Corporation guaranteed; and adopt loan administration and borrower disclosure rules that follow Corporation standards. The rules must not favor Farm Credit System applicants over others. The Corporation must decide on applications within 60 days and certify facilities that meet the rules. A certification can last up to 5 years. After notice and a hearing, the Corporation can revoke a certification if the facility no longer meets the rules, but revocation does not undo any pool guarantees already given. Farm Credit System institutions may set up affiliate facilities and may agree to sell their qualified loans exclusively through a certified facility.

Title 12, §2279aa–5

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(a)Eligibility standards

(1)Establishment required

Within 120 days after the date on which the permanent board first meets with a quorum present, the Corporation shall issue standards for the certification of agricultural mortgage marketing facilities (other than the Corporation), including eligibility standards in accordance with paragraph (2).

(2)Minimum requirements

To be eligible to be certified under the standards referred to in paragraph (1), an agricultural mortgage marketing facility (other than the Corporation) shall—

(A)be an institution of the Farm Credit System or a corporation, association, or trust organized under the laws of the United States or of any State;

(B)meet or exceed capital standards established by the Board;

(C)have as one of the purposes of the facility, the sale or resale of securities representing interests in, or obligations backed by, pools of qualified loans that have been provided guarantees by the Corporation;

(D)demonstrate managerial ability with respect to agricultural mortgage loan underwriting, servicing, and marketing that is acceptable to the Corporation;

(E)adopt appropriate agricultural mortgage loan underwriting, appraisal, and servicing standards and procedures that meet or exceed the standards established by the Board;

(F)for purposes of enabling the Corporation to examine the facility, agree to allow officers or employees of the Corporation to have access to all books, accounts, financial records, reports, files, and all other papers, things, or property, of any type whatsoever, belonging to or used by the Corporation that are necessary to facilitate an examination of the operations of the facility in connection with securities, and the pools of qualified loans that back securities, for which the Corporation has provided guarantees; and

(G)adopt appropriate minimum standards and procedures relating to loan administration and disclosure to borrowers concerning the terms and rights applicable to loans for which guarantee is provided, in conformity with uniform standards established by the Corporation.

(3)Nondiscrimination requirement

The standards established under this subsection shall not discriminate between or against Farm Credit System and non-Farm Credit System applicants.

(b)Certification by Corporation

Within 60 days after receiving an application for certification under this section, the Corporation shall certify the facility if the facility meets the standards established by the Corporation under subsection (a)(1).

(c)Maximum time period for certification

Any certification by the Corporation of an agricultural mortgage marketing facility shall be effective for a period determined by the Corporation of not to exceed 5 years.

(d)Revocation

(1)In general

After notice and an opportunity for a hearing, the Corporation may revoke the certification of an agricultural mortgage marketing facility if the Corporation determines that the facility no longer meets the standards referred to in subsection (a).

(2)Effect of revocation

Revocation of a certification shall not affect any pool guarantee that has been issued by the Corporation.

(e)Affiliation of FCS institutions with facility

(1)Establishment of affiliate authorized

Notwithstanding any other provision of this chapter, any Farm Credit System institution, acting for such institution alone or in conjunction with one or more other such institutions, may establish and operate, as an affiliate, an agricultural mortgage marketing facility if, within a reasonable time after such establishment, such facility obtains and thereafter retains certification under subsection (b) as a certified facility.

(2)Exclusive agency agreement authorized

Any number of Farm Credit System institutions (other than the Corporation) may enter into an agreement with any certified facility (including an affiliate established under paragraph (1)) to sell the qualified loans of such institutions exclusively to or through the facility.

Notes & Related Subsidiaries

Editorial Notes

Amendments

1996—Subsec. (a)(1). Pub. L. 104–105, § 106(1)(A), inserted “(other than the Corporation)” after “facilities”. Subsec. (a)(2). Pub. L. 104–105, § 106(1)(B), inserted “(other than the Corporation)” after “facility” in introductory provisions. Subsec. (e)(1). Pub. L. 104–105, § 106(2), struck out “(other than the Corporation)” after “System institution”.

§2279aa–5 Certification of Agricultural Mortgage Marketing Facilities

Summary

Title 12, §2279aa–5

Notes & Related Subsidiaries

Editorial Notes

Amendments

Citations & Metadata