12 U.S.C. § 2279c–1: Merger of associations

§2279c–1 Merger of Associations

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 2 — merger of like and unlike associations › § 2279c–1

Last updated Sep 22, 2026|Official source

Summary

Two or more associations in the same district can join into a single merged association if the merger plan is approved by four groups: the Farm Credit Administration Board, each association’s board of directors, a majority of each association’s shareholders voting at a proper stockholders’ meeting, and the Farm Credit Bank. The new merged association keeps the same powers and must follow the same duties the original associations had, unless another part of the law says otherwise. The Farm Credit Administration will make rules for how those powers and duties are combined and sorted out. Under section 2154a of this title, the merger plan decides how many shares the stockholders of each original association get and what rights those shares have (for example voting, liquidation preferences, and dividends). The merged association must also set up, in its bylaws and under Farm Credit Administration rules, how it is capitalized and how stock is issued, held, transferred, retired, and how earnings are shared.

Title 12, §2279c–1

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(a)In general

Two or more associations within the same district, whether or not organized under the same subchapter of this chapter, may merge into a single entity (hereinafter in this subchapter referred to as a “merged association”) if the plan of merger is approved by—

(1)the Farm Credit Administration Board;

(2)the boards of directors of the associations;

(3)a majority of the shareholders of each association voting, in person or by proxy, at a duly authorized stockholders’ meeting; and

(4)the Farm Credit Bank.

(b)Powers, obligations, and consolidation

(1)Powers and obligations

Except as otherwise provided by this subchapter, a merged association shall—

(A)possess all powers granted under this chapter to the associations forming the merged association; and

(B)be subject to all of the obligations imposed under this chapter on the associations forming the merged association.

(2)Consolidation

The Farm Credit Administration shall issue regulations that establish the manner in which the powers and obligations of the associations that form the merged association are consolidated and, to the extent necessary, reconciled in the merged association.

(c)Stock issuance

(1)Plan of merger

Subject to section 2154a of this title, the number of shares of capital stock issued by a merged association to the stockholders of any association forming such merged association, and the rights and privileges of such shares (including voting power, preferences on liquidation, and the right to dividends), shall be determined by the plan of merger adopted by the merged associations.

(2)Capitalization

In accordance with section 2154a of this title, each merged association shall provide, through bylaws and subject to Farm Credit Administration regulations, for the capitalization of the association and the manner in which association stock shall be issued, held, transferred, and retired, and association earnings shall be distributed.

Notes & Related Subsidiaries

Editorial Notes

Amendments

1988—Subsec. (b)(2). Pub. L. 100–399, § 408(k), struck out second sentence, which directed that, following a merger under subsection (a) of this section, the provisions of section 2154a of this title were to be applicable to the merged association. Subsec. (c)(2). Pub. L. 100–399, § 408(l), substituted “Capitalization” for “Plan of capitalization” as par. (2) heading and amended text generally. Prior to amendment, text read as follows: “The number of shares of capital stock, and the rights and privileges thereof, issued by a merged association after a merger shall be determined by the Board of Directors of the merged association, with the approval of the supervising bank, and shall be consistent with section 2154a of this title and the

Regulations

issued by the Farm Credit Administration.” Subsec. (c)(3). Pub. L. 100–399, § 408(l), struck out par. (3) which read as follows: “Voting stock of a merged association shall be issued to and held by farmers, ranchers, or producers or harvesters of aquatic products who are or were, immediately prior to the merger, direct borrowers from one of the associations forming the merged association or the supervising bank of such merged association.” Subsec. (d). Pub. L. 100–399, § 408(l), struck out subsec. (d) which read as follows: “The plan of merger shall provide for the issuance, transfer, and retirement of stock and the distribution of earnings in accordance with the provisions of section 2154a 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.