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Title 12, Banks and BankingRelease 119-73not60

§2279aa–10 Funding for Guarantee; Reserves of Corporation

Title 12 › Chapter 23— FARM CREDIT SYSTEM › Subchapter VIII— AGRICULTURAL MORTGAGE SECONDARY MARKET › Part A— Establishment and Activities of Federal Agricultural Mortgage Corporation › § 2279aa–10

Last updated Apr 3, 2026|Official source

Summary

The Corporation must guarantee securities that are backed by pools of qualified loans. When a guarantee is issued, the certified facility must pay a one-time fee of no more than 0.5% of the pool’s original principal. Starting in the second year, the Corporation can charge an annual fee of up to 0.5% of the principal still in the pool. The Corporation must set fees based on the risk it takes and on an actuarially sound basis. The Comptroller General may review and report to Congress on those fees. The Board must put as much of those fees as it needs into a separate reserve to cover losses from guarantees. The Corporation cannot borrow from the Treasury under the cited law to pay guarantee obligations until that reserve is used up. The Corporation may also charge reasonable fees to recover its administrative costs.

Full Legal Text

Title 12, §2279aa–10

Banks and Banking, Source: USLM XML via OLRC

(a)The Corporation shall provide guarantees for securities representing interests in, or obligations backed by, pools of qualified loans through commitments issued by the Corporation providing for guarantees.
(b)(1)At the time a guarantee is issued by the Corporation, the Corporation shall assess the certified facility a fee of not more than ½ of 1 percent of the initial principal amount of each pool of qualified loans.
(2)Beginning in the second year after the date the guarantee is issued under paragraph (1), the Corporation may, at the end of each year, assess the certified facility an annual fee of not more than ½ of 1 percent of the principal amount of the loans then constituting the pool.
(3)The Corporation shall establish such fees on the amount of risk incurred by the Corporation in providing the guarantees with respect to which such fee is assessed, as determined by the Corporation. Fees assessed under paragraphs (1) and (2) shall be established on an actuarially sound basis.
(4)The Comptroller General of the United States may review, and submit to the Congress a report regarding, the actuarial soundness and reasonableness of the fees established by the Corporation under this subsection.
(c)(1)So much of the fees assessed under this section as the Board determines to be necessary shall be set aside by the Corporation in a segregated account as a reserve against losses arising out of the guarantee activities of the Corporation.
(2)The Corporation may not issue obligations to the Secretary of the Treasury under section 2279aa–13 of this title in order to meet the obligations of the Corporation with respect to any guarantees provided under this subchapter until the reserve established under paragraph (1) has been exhausted.
(d)The Corporation may impose charges or fees in reasonable amounts in connection with the administration of its activities under this subchapter to recover its costs for performing such administration.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Amendments

1996—Subsec. (b)(4). Pub. L. 104–316 substituted “Review” for “Annual review” in heading and “may review” for “shall annually review” in text.

Reference

Citations & Metadata

Citation

12 U.S.C. § 2279aa–10

Title 12, Banks and Banking

Last Updated

Apr 3, 2026

Release point: 119-73not60