12 U.S.C. § 2279d: Termination of System…

§2279d Termination of System Institution Status

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 4 — termination and dissolution of institutions › § 2279d

Last updated Sep 22, 2026|Official source

Summary

A Farm Credit System institution can stop being a System institution if it meets several conditions. It must give written notice to the Farm Credit Administration Board at least 90 days before the planned date, get the Board’s approval, get a federal or state charter to become a bank, savings and loan, or other financial institution, pay to the Farm Credit Insurance Fund any amount by which its total capital is over 6 percent of its assets, pay or provide for all its debts, get a majority vote of stockholders at a proper meeting held before giving notice, and meet any other rules the Board requires. When the institution’s System status ends, the Farm Credit Administration Board will revoke its charter, and the institution will no longer be an instrumentality of the United States under this chapter.

Title 12, §2279d

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(a)Conditions

A System institution may terminate the status of the institution as a System institution if—

(1)the institution provides written notice to the Farm Credit Administration Board not later than 90 days prior to the proposed termination date;

(2)the termination is approved by the Farm Credit Administration Board;

(3)the appropriate Federal or State authority grants approval to charter the institution as a bank, savings and loan association, or other financial institution;

(4)the institution pays to the Farm Credit Insurance Fund the amount by which the total capital of the institution exceeds 6 percent of the assets;

(5)the institution pays or makes adequate provision for payment of all outstanding debt obligations of the institution;

(6)the termination is approved by a majority of the stockholders of the institution voting, in person or by written proxy, at a duly authorized stockholders’ meeting, held prior to giving notice to the Farm Credit Administration Board; and

(7)the institution meets such other conditions as the Farm Credit Administration Board by regulation considers appropriate.

(b)Effect

On termination of its status as a System institution—

(1)the Farm Credit Administration Board shall revoke the charter of the institution; and

(2)the institution shall no longer be an instrumentality of the United States under this chapter.

Notes & Related Subsidiaries

Editorial Notes

Amendments

2018—Subsec. (a)(4). Pub. L. 115–334 added par. (4) and struck out former par. (4) which read as follows: “the institution pays to the Farm Credit Assistance Fund, as created under section 2278b–5 of this title, if the termination is prior to January 1, 1992, or pays to the Farm Credit Insurance Fund, if the termination is after such date, the amount by which the total capital of the institution exceeds, 6 percent of the assets;”.