§2279b — Title 12 Banks and Banking | U.S. Code

§2279b Transfer of Lending Authority

Title 12 › Chapter 23— FARM CREDIT SYSTEM › Subchapter VII— RESTRUCTURING OF SYSTEM INSTITUTIONS › Part B— Mergers, Transfers of Assets, and Powers of Associations Within a District › Subpart 1— transfers by federal land banks to federal land bank associations › § 2279b

Last updated Apr 3, 2026|Official source

Summary

A Federal land bank can give its power to make long-term real estate mortgage loans in an area to a local Federal land bank association, and the association can take over that power. The transfer must be approved by the Farm Credit Administration Board, both institutions’ boards of directors, and a majority of each institution’s stockholders under their voting rules. After the transfer, the association gets all direct long-term lending power in its territory. The bank may still help the association with money and may buy or discount loans or notes the association has endorsed or guaranteed. The Farm Credit Administration must make rules for how the banks’ powers and duties are combined. If production credit associations merge with Federal land bank associations, the supervising bank must transfer its direct lending authority in that area to the merged association.

Title 12, §2279b

Banks and Banking — Source: USLM XML via OLRC

(a)A Federal land bank or a merged bank having a Federal land bank as one of its constituents, may transfer to a Federal land bank association, and the association may assume, the authority of the transferring bank in the territorial area served by the association, to make and participate in long-term real estate mortgage loans under this chapter if the transfer is approved by—

(1)the Farm Credit Administration Board;

(2)the Board of Directors of both institutions; and

(3)a majority of the stockholders of the bank and of the association, in accordance with the voting provisions of section 2279a and 2279c–1 of this title, respectively.

(b)After a transfer described in subsection (a) or (d)—

(1)the Federal land bank association shall possess all of the direct long-term real estate mortgage loan authority, formerly possessed by the transferring bank, in the territory served by the association; and

(2)the bank may provide and extend financial assistance to, and discount for, or purchase from, the transferee Federal land bank association any note, draft, or other obligation with the endorsement or guarantee of the association, the proceeds of which have been advanced to persons eligible and for purposes of financing by the association under subsection (a).

(c)The Farm Credit Administration shall issue regulations that establish the manner in which the powers and obligations of the banks that make transfers are consolidated and, to the extent necessary, reconciled in the association referred to in subsection (a).

(d)On the merger of one or more production credit associations with one or more Federal land bank associations, the bank supervising the Federal land bank association shall transfer all of the direct lending authority of the bank in the territory served by such Federal land bank association to such merged association.

Notes & Related Subsidiaries

Editorial Notes

Codification Pub. L. 100–399, § 408(j), transferred section 7.7 of Pub. L. 92–181, which was classified to section 2279c of this title, to subsec. (d) of this section.

Amendments

1988—Subsec. (a). Pub. L. 100–399, § 408(f), substituted “Voluntary transfers” for “Assignments” as subsection heading, and in text substituted “may transfer” for “may assign”, “this chapter” for “sections 2014 through 2017 of this title”, and “transfer is approved” for “assignment is approved” in introductory provisions, and “section 2279a and 2279c–1 of this title, respectively” for “section 2279a and 2279b of this title” in par. (3). Subsec. (b). Pub. L. 100–399, § 408(g), substituted “a transfer described in subsection (a) or (d)” for “an assignment described in subsection (a)” in introductory provisions and “the bank may provide” for “the Federal land bank may provide” in par. (2). Subsec. (c). Pub. L. 100–399, § 408(h), struck out “assignments or” before “transfers are consolidated” and struck out second sentence, which provided that, following a transfer or assignment under subsection (a) of this section, the provisions of section 2154a of this title were to be applicable to the association. Subsec. (d). Pub. L. 100–399, § 408(i), (j), transferred section 2279c of this title to subsec. (d) of this section, substituted heading for former section heading, and amended text generally. Prior to amendment, text read as follows: “On the merger of one or more production credit associations with one or more Federal land bank associations, the bank supervising the Federal land bank association shall transfer all of its direct lending authority of the bank to such association under section 2279c–1 of this title.”

Statutory Notes and Related Subsidiaries

Effective Date

of 1988 AmendmentAmendment by Pub. L. 100–399 effective as if enacted immediately after enactment of Pub. L. 100–233, which was approved Jan. 6, 1988, see section 1001(a) of Pub. L. 100–399, set out as a note under section 2002 of this title.