Title 12, Banks and BankingRelease 119-110

§2279bb–5 Mandatory Actions Applicable to Level Ii

Title 12 › CHAPTER 23 — FARM CREDIT SYSTEM › SUBCHAPTER VIII — AGRICULTURAL MORTGAGE SECONDARY MARKET › Part B — Regulation of Financial Safety and Soundness of Federal Agricultural Mortgage Corporation › § 2279bb–5

Last updated Sep 22, 2026|Official source

Summary

If the Corporation is in level II, it must give the Director a capital restoration plan on the Director’s schedule, get it approved, and carry it out. It may not pay any dividends that would move it into level III or IV. If it fails to submit an approved plan or fails in good faith to follow the approved schedule, the Director must immediately reclassify it to level III. This took effect when the 30-month period beginning on December 13, 1991, expired.

Full Legal Text

Title 12, §2279bb–5

Banks and Banking, Source: USLM XML via OLRC

(a)Capital restoration plan

If the Corporation is classified as within level II, the Corporation shall, within the time period determined by the Director, submit to the Director a capital restoration plan and, after approval, carry out the plan.

(b)Restriction on dividends

If the Corporation is classified as within level II, the Corporation may not make any payment of dividends that would result in the Corporation being reclassified as within level III or IV.

(c)Reclassification from level II to level III

The Director shall immediately reclassify the Corporation as within level III (and the Corporation shall be subject to the provisions of section 2279bb–6 of this title), if—

(1)the Corporation is within level II; and

(2)(A)the Corporation does not submit a capital restoration plan that is approved by the Director; or

(B)the Director determines that the Corporation has failed to make, in good faith, reasonable efforts necessary to comply with such a capital restoration plan and fulfill the schedule for the plan approved by the Director.

(d)Effective date

This section shall take effect upon the expiration of the 30-month period beginning on December 13, 1991.

Reference

Citations & Metadata

Citation

12 U.S.C. § 2279bb–5

Title 12, Banks and Banking

Last Updated

Sep 22, 2026

Release point: 119-110