Title 12, Banks and BankingRelease 119-110

§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 Sep 22, 2026|Official source

Summary

Gives the Farm Credit Administration the power to examine and supervise the Corporation and its affiliates through a new Office of Secondary Market Oversight. The Administration can use the powers in part C of subchapter V and, starting 6 months after December 13, 1991, the power in section 2252(a)(9) of this title. When acting, the Administration must keep in mind why the Corporation was created, what good secondary market practices look like, and that properly structured secondary market deals usually carry less risk. The Farm Credit Administration Board must create the Office within 180 days after December 13, 1991. The Office must have a full-time Director chosen by and reporting to the Board. Examiners will check the Corporation’s financial transactions under commercial rules. Exams must happen as often as the Board decides, but at least once a year. Examiners get full access to all books, records, reports, files, and anything needed to check dealings, and they can verify transactions with other firms the Corporation works with. The Corporation must publish an annual report with GAAP financial statements and an audit by an independent public accountant, plus any extra information the Administration requires. The Administration may bill the Corporation for the cost of these oversight activities. “Affiliate” means an entity the Corporation owns or controls, but not an originator. The Board must make sure the Office has enough trained staff and, when possible, that different people supervise the Corporation than those who supervise Farm Credit banks and associations.

Full Legal Text

Title 12, §2279aa–11

Banks and Banking, Source: USLM XML via OLRC

(a)Regulation
(1)Authority
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)Considerations
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)Office of Secondary Market Oversight
(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)Examinations and audits
(1)In general
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)Frequency
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)Access
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)Annual report of condition
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)FCA assessments to cover costs
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)“Affiliate” defined
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)Employees and personnel
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

Sep 22, 2026

Release point: 119-110