PUBLIC LAW 96-592—DEC. 24, 1980 94 STAT. 3437 

Public Law 96-592 

96th Congress 

An Act 

To amend the Farm Credit Act of 1971 to permit Farm Credit System institutions to 

improve their services to borrowers, and for other purposes. 

Be it enacted by the Senate and House of Representatives of the 

United States of America in Congress assembled. That this Act may be 

cited as the "Farm Credit Act Amendments of 1980". 

TITLE I-FEDERAL LAND BANKS AND ASSOCIATIONS 

Dec. 24, 1980 

[S. 1465] 

Farm Credit Act 

Amendments of 

1980. 

12 us e 2001 

note. 

SEC. 101. Section 1.4 of the Farm Credit Act of 1971 is amended by— 12 use 2012. 

(1) striking out in paragraph (6) "loans and" and inserting in 

lieu thereof and participate in loans, make"; 

(2) inserting before the period at the end of paragraph (12) 

", participate with one or more other Farm Credit System 

institutions in loans made under this title or other titles of this 

Act on the basis prescribed in section 4.18 of this Act, and Post, p. 3446. 

participate with lenders which are not Farm Credit System 

institutions in loans that the bank is authorized to make under 

this title"; 

(3) inserting after "System" in the first sentence of paragraph 

(14) "or any insured State nonmember bank as defined in section 

2 of the Federal Deposit Insurance Act"; 

(4) striking out everything after the second comma in paragraph (15) and inserting in lieu thereof "and, as m ^ be authorized by its board of directors and approved by the Farm Credit 

Administration, (i) sell to lenders which are not Farm Credit 

System institutions interests in loans, (ii) buy from and sell to 

Farm Credit System institutions interests in loans and in other 

financial assistance extended and nonvoting stock, and (iii) make 

other investments."; and 

(5) adding new paragraphs (22) and (23) as follows: 

"(22) Accept contributions to its capital from Federal land bank 

associations and account therefor as authorized by the Farm Credit 

Administration. 

"(23) As may be authorized by its board of directors and approved 

by the Farm Credit Administration, agree with other Farm Credit 

System institutions to share loan and other losses, whether to protect 

against capital impairment or for any other purpose.". 

SEC. 102. Section 1.5 of the Farm Credit Act of 1971 is amended by— 12 use 2013. 

(1) striking out in subsection (b) "hypotheticated" and inserting in lieu thereof "hypothecated"; 

(2) striking out the first sentence of subsection (d) and inserting 

in lieu thereof two new sentences as follows: "Nonvoting stock 

may be issued to the Governor of the Farm Credit Admuiistration, to borrowers as patronage refunds, and may also be issued 

to Federal land bank associations in amounts that will permit 

the bank to extend financial assistance to eligible persons other 

than farmers, ranchers, and producers or harvesters of aquatic 

products. Nonvoting stock also may be issued to and shall be 

Nonvoting stock, 

issuance. 
94 STAT. 3438 PUBLIC LAW 96-592—DEC. 24, 1980 

Patronage 

refunds. 

Equities, 

issuance. 

12 us e 2014. 

12 us e 2015. 

Post, p. 3446. 

12 us e 2016. 

Loan security. 

12 us e 2017. 

12 us e 2018. 

12 us e 2019. 

retired for other Farm Credit System institutions as may be 

authorized by its board of directors and approved by the Farm 

Credit Administration."; and 

(3) adding new subsections (f) and (g) as follows: 

"(f) Patronage refunds may be paid in nonvoting stock, participation certificates, allocated surplus, and other equities of the bank, or 

cash, or in both equities and cash, as determined by the board of the 

bank, to borrowers of the fiscal year for which such patronage 

refunds are distributed. All patronage refunds shall be paid in the 

proportion that the amount of interest on the loans to each borrower 

during the year bears to the interest on the loeuis of all borrowers 

during the year or on such other proportionate patronage basis as the 

Farm Credit Administration may approve, 

"(g) Equities to evidence contributions to capital may be issued to 

Federal land bank associations when the bylaws of the bank so 

provide.". 

SEC. 103. Section 1.6 of the Farm Credit Act of 1971 is amended to 

read as follows: 

"SEC. 1.6. REAL ESTATE MORTGAGE LOANS.—The Federal land banks 

are authorized to make or participate with other lenders in long-term 

real estate mortgage loans in rural areas, as defined by the Farm 

Credit Administration, or to producers or harvesters of aquatic 

products, and make continuing commitments to make such loans 

under specified circumstances, or extend other financial assistance of 

a similar nature to eligible borrowers, for a term of not less than five 

nor more than forty years.". 

SEC. 104. Section 1.7 of the Farm Credit Act of 1971 is amended by 

inserting before the period in the first sentence "as provided in 

section 4.17 of this Act . 

SEC. 105. Section 1.8 of the Farm Credit Act of 1971 is amended by 

striking out in clause (1) "and ranchers" and inserting in lieu thereof 

", ranchers, or producers or harvesters of aquatic products". 

SEC. 106. Section 1.9 of the Farm Credit Act of 1971 is amended by 

striking out the first sentence and inserting in lieu thereof the 

following: "Loans originated by a Federal land bank or in which it 

participates with a lender which is not a Farm Credit System 

institution shall not exceed 85 per centum of the appraised value of 

the real estate security, or such greater amount, not to exceed 97 per 

centum of the appraised value of the real estate securitj^, as may be 

authorized under regulations of the Farm Credit Administration for 

loans guaranteed by Federal, State, or other governmental agencies, 

and shall be secured by first liens on interest in real estate of such 

classes as may be approved by the Farm Credit Administration.". 

SEC. 107. Section 1.10 of the Farm Credit Act of 1971 is amended by 

striking out the first sentence and inserting in lieu thereof the 

following: "Loans made by the Federal land banks to farmers, 

ranchers, and producers or harvesters of aquatic products may be for 

any agricultural or aquatic purpose and other credit needs of the 

applicant, including financing for basic processing and marketing 

directly related to the applicant's operations ana those of other 

eligible farmers, ranchers, and producers or harvesters of aquatic 

products: Provided, That the applicant's operations shall supply at 

least 20 per centum, or such larger per centum that is required by the 

board of directors of the bank under regulations of the Farm Credit 

Administration, of the total processing or marketing for which 

financing is extended.". 

SEC. 108. Section 1.11 of the Farm Credit Act of 1971 is amended by 

inserting "and aquatic" before "operations". 
PUBLIC LAW 96-592—DEC. 24, 1980 94 STAT. 3439 

SEC. 109. Section 1.12 of the Farm Credit Act of 1971 is amended by 12 use 2020. 

striking out the designation "(a)". 

SEC. 110. Section 1.15 of the Farm Credit Act of 1971 is amended 12 USC 2033. 

b y -

CD striking out in paragraph (13) "shall"; 

(2) striking out in paragraph (14) "may" the second time it 

appears; and 

(3) adding a new paragraph (21) as follows: 

"(21) Contribute to the capital of the bank.". 

SEC. 111. Section 1.16 of the Farm Credit Act of 1971 is amended 12 USC 2034. 

b y -

(1) striking out in the sixth sentence of subsection (a) "fair"; 

and 

(2) adding a new subsection (c) as follows: 

"(c) Notwithstanding the provisions of subsection (a) of this section, 

the purchase of stock need not be required with respect to that part of 

any loan (1) made by a Federal land bank which it sells to a lender 

which is not a Farm Credit System institution, or (2) that such lender 

retains or acquires in participating in the loan with a Federal land 

bank.". 

SEC. 112. Section 1.17 of the Farm Credit Act of 1971 is amended 12 USC 2051. 

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(1) striking out in the last sentence of subsection (a) "exess ' 

and inserting in lieu thereof "excess"; and 

(2) amending subsection (b) by inserting ", and pay patronage 

refunds, or do any of them, as provided in its bylaws," after 

"dividends", and striking out "with" and inserting in lieu thereof 

"the". 

SEC. 113. Section 1.18(b) of the Farm Credit Act of 1971 is amended Dividends. 

to read as follows: 12 USC 2052. 

"(b) Any association may declare a dividend or dividends and pay 

patronage refunds, or do any of them, as provided in its bylaws, out of 

the whole or any part of its net earnings available therefor which 

remain after (1) maintenance of the reserve required in subsection (a) 

of this section and (2) bank approval. All patronage refunds shall be 

paid on the proportionate patronage basis approved by the bank. 

Dividends shall be noncumulative, and the rate of dividends may be 

different between classes and issues of stock and participation certificates on the basis of the comparative contributions of the holders 

thereof to the capital or earnings of the Federal land bank by such 

classes and issues, but otherwise dividends shall be without preference.". 

SEC.114. Section 1.19 of the Farm Credit Act of 1971 is amended by 12 USC 2053. 

adding at the end thereof a new sentence as follows: "As may be 

authorized by the bank in accordance with regulations of the Farm 

Credit Administration, associations also may enter into agreements 

with other Farm Credit System institutions to share loan and other 

losses, whether to protect against capital impairment or for any other [ 

purpose.". 

SEC. 115. Section 1.20 of the Farm Credit Act of 1971 is amended by 12 USC 2054. 

inserting after "stock" the second time it appears "or participation 

certificates," and inserting "or other Farm Credit System institutions" after "Administration". 

TITLE II—FEDERAL INTERMEDIATE CREDIT BANKS AND 

PRODUCTION CREDIT ASSOCIATIONS 

SEC. 201. Section 2.1 of the Farm Credit Act of 1971 is amended by— 12 USC 2072. 
94 STAT. 3440 PUBLIC LAW 96-592—DEC. 24, 1980 

(1) inserting after "System" in the first sentence of paragraph 

(12) "or any insured State nonmember bank as defined in section 

2 of the Federal Deposit Insurance Act"; 

(2) striking out in paragraph (13) everything after "agency" the 

second time it appears and inserting in lieu thereof ", and, as 

may be authorized by its board of directors and approved by the 

Farm Credit Administration, (i) buy from and sell to Farm Credit 

System institutions interests in loans and in other financial 

assistance extended and nonvoting stock, and (ii) make other 

investments."; 

(3) amending paragraph (18) to read as follows: 

"(18) As may be authorized by its board of directors and approved 

by the Farm Credit Administration, agree with other Farm Credit 

System institutions to share loan or other losses, whether to protect 

against capital impairment or for any other purposes,"; and 

(4) inserting before the period at the end of paragraph (20) 

", and participate with one or more other Farm Credit System 

institutions in loans made under this title or other titles of this 

Act on the bsisis prescribed in section 4.18 of this Act". 

12 use 2073. SEC. 202. Section 2.2 of the Farm Credit Act of 1971 is amended by— 

(1) inserting before the period at the end of the first sentence of 

subsection (d) ", and may be issued to and, notwithstanding the 

provisions of subsection (g) of this section, shall be retired for 

other Farm Credit System institutions as may be authorized 

by its board of directors and approved by the Farm Credit 

Administration"; 

(2) striking out in the second and fourth paragraphs of subsection (g) "fair"; 

(3) striking out everything through "Governor" in subsection 

(h) and inserting in lieu thereof "Except with regard to stock or 

participation certificates held by the Governor or other Farm 

Credit System institutions"; and 

(4) striking out in subsection (i) "fair". 

12 use 2074. SEC. 203. Section 2.3 of the Farm Credit Act of 1971 is amended to 

read as follows: 

"SEC. 2.3. LOANS; DISCOUNTS; PARTICIPATION; LEASING.—(a) The 

Federal intermediate credit banks are authorized to make loans and 

extend other similar financial assistance to, and to discount for or 

purchase from— 

"(1) any production credit association, or 

"(2) any national bank. State bank, trust company, agricultural 

credit corporation, incorporated livestock loan company, savings 

institution, credit union, or any association of agricultural producers engaged in the making of loans to farmers and ranchers, 

and any corporation engaged in the making of loans to producers 

or harvesters of aquatic products, 

any note, draft, or other obligation with its endorsement or guarantee, the proceeds of which note, draft, or other obligation have been 

advanced to persons and for purposes eligible for financing by 

production credit associations under section 2.15(a) (1), (2), and (3) of 

12 use 2096. this Act. 

"03) The Federal intermediate credit banks may participate with 

one or more production credit associations or intermediate credit 

banks in the making of loans to eligible borrowers and may participate with one or more other Farm Credit System institutions in loans 

made under this title or other titles of this Act on the basis prescribed 

Post, p. 3446. in section 4.18 of this Act. The banks may own and lease or lease with 
PUBLIC LAW 96-592—DEC. 24, 1980 94 STAT. 3441 

option to purchase to persons eligible for assistance under this 

title, equipment needed in the operations of such persons. 

"(c) No paper shall be purchased from or discounted for, and no 

loans shall be made or other similar financial assistance extended by 

a Federal intermediate credit bank to any entity identified in 

subsection (a) (1) and (2) of this section if the amount of such paper 

added to the aggregate liabilities of such entity, whether direct or 

contingent (other than bona fide deposit liabilities), exceeds ten times 

the paid-in and unimpaired capital and surplus of such entity or (in 

the case of financing institutions under subsection (a)(2) of this 

section) the amount of such liabilities permitted under the laws of the 

jurisdiction creating such institution, whichever is the lesser. It shall 

be unlawful for any national bank which is indebted to any Federal 

intermediate credit bank, upon paper discounted or purchased under 

subsection (a) of this section, to incur any additional indebtedness, if 

by virtue of such additional indebtedness its aggregate liabilities 

direct or contingent, will exceed the limitation herein contained. 

"(d) All of the loans, financial assistance, discounts, and purchases 

authorized by this section shall be subject to regulations of the Farm 

Credit Administration and shall be secured by collateral, if any, as 

may be required in such regulations. The regulations shall assure 

that such loans, financial assistance, discounts, and purchases are 

available on a reasonable basis to any financing institution authorized to receive such services under subsection (a)(2) of this section that 

(i) is significantly involved in lending for agricultural or aquatic 

purposes, (ii) demonstrates a continuing need for supplementary 

sources of funds to meet the credit requirements of its agricultural or 

aquatic borrowers, (iii) has limited access to national or regional 

capital markets, and (iv) does not use such services to expand its 

financing activities to persons and for purposes other than those 

authorized in section 2.15(a) (1), (2), and (3) of this Act. The regula- 12 USC 2096. 

tions may authorize a Federal intermediate credit bank to charge 

reasonable fees for any commitment to extend service under this 

section to such a financing institution. For purposes of this subsection, a financing institution together with its subsidiaries and affiliates may be considered as one but such determination to consider 

such institution together with its subsidiaries and affiliates as one 

shall be made in the first instance by the bank and in the event of a 

denial by the bank of its services to a financial institution, thereafter 

by the Farm Credit Administration on a case-by-case basis with due 

regard to the total relationship of the financing institution, its 

subsidiaries, and affiliates. 

"(e) Nothing in this section shall require termination of discount 

relationships in existence on the effective date of the Farm Credit Act 

Amendments of 1980.". 

SEC. 204. Section 2.4 of the Farm Credit Act of 1971 is amended by 12 USC 2075. 

striking out the first sentence and inserting in lieu thereof the 

following: "Loans, advances, or discounts made under section 2.3 of 

this Act shall be repayable in not more than seven years (fifteen years ^"^^' P- 3440. 

if made to producers or harvesters of aquatic products) from the time 

they are made or discounted by the Federal intermediate credit bank, 

except that the district farm credit board, under regulations of the 

Farm Credit Administration, may approve policies permitting loans, 

advances, or discounts (other than those made to producers or 

harvesters of aquatic products) to be repayable in not more than ten 

years from the time they are made or discounted by such bank. 

Loans, advances, and discounts shall bear such rate or rates of 

interest or discount as the board of directors of the bank shall from 
94 STAT. 3442 PUBLIC LAW 96-592—DEC. 24, 1980 

time to time determine with the approval of the Farm Credit 

Administration as provided in section 4.17 of this Act, but the rates 

charged financing institutions shall be the same as those charged 

production credit associations.". 

12 use 2076. SEC. 205. Section 2.5 of the Farm Credit Act of 1971 is amended by 

inserting "and aquatic" after "on-farm". 

12 use 2077. SEC. 206. Section 2.6(c) of the Farm Credit Act of 1971 is amended by 

striking out "of less than 25 per centum" in the second sentence. 

12 use 2091. SEC. 207. Section 2.10 of the Farm Credit Act of 1971 is amended by 

striking out the comma after "States" in the first sentence and 

inserting in lieu thereof a period. 

12 use 2093. SEC. 208. Section 2.12 of the Farm Credit Act of 1971 is amended 

b y -

(1) inserting before the period at the end of paragraph (11) "and 

buy from and sell to such banks interests in loans and in other 

financial assistance extended and nonvoting stock, as may be 

authorized by the Federal intermediate credit bank in accordance with regulations of the Farm Credit Administration"; 

(2) inserting before the period at the end of paragraph (13) "and 

when authorized by the bank participate with one or more other 

Farm Credit System institutions in loans made under this title or 

other titles of this Act on the basis prescribed in section 4.18 of 

Post, p. 3446. this Act"; and 

(3) amending paragraph (15) to read as follows: 

"(15) As may be authorized by the Federal intermediate credit 

bank in accordance with regulations of the Farm Credit Administration, agree with other Farm Credit System institutions to 

share loan or other losses, whether to protect against capital 

impairment or for any other purpose.". 

12 use 2094. SEC. 209. Section 2.13 of the Farm Credit Act of 1971 is amended 

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(1) inserting before the period at the end of subsection (e) "or in 

lieu of nonvoting stock"; 

(2) striking out in the first sentence of subsection (f) "fair"; 

(3) amending the last sentence of subsection (f) to read as 

follows: "Notwithstanding any other provisions of this section, 

for a loan in which an association participates with a commercial 

bank or other financial institution other than a Farm Credit 

System institution, nonvoting stock or participation certificates 

may be issued to the commercial bank or other financial institution in satisfaction of the requirement that the borrower own 

stock or participation certificates, which requirement shall 

apply only to the portion of the loan which is retained by the 

association."; 

(4) striking out in the first sentence in subsection (g) "fair"; 

(5) striking out everjrthing through "Governor" in subsection 

(j) and inserting in lieu thereof "Except with regard to stock or 

participation certificates held by the Governor or other Farm 

Credit Sjrstem institutions"; and 

(6) striking out in subsection (k) "fair". 

12 use 2096. SEC. 210. Section 2.15 of the Farm Credit Act of 1971 is amended 

b y -

(1) amending clause (1) in the first sentence of subsection (a) to 

read as follows: "(1) bona fide farmers and ranchers and the 

producers or harvesters of aquatic products, for agricultural or 

aquatic purposes and other requirements of such borrowers, 

including financing for basic processing and marketing directly 

related to the borrower's operations and those of other eligible 
PUBLIC LAW 96-592—DEC. 24, 1980 94 STAT. 3443 

farmers, ranchers, and producers or harvesters of aquatic products: Provided, That the borrower's operations shall supply at 

least 20 per centum, or such larger per centum that is required 

by the supervising bank under regulations of the Farm Credit 

Administration, of the total processing or marketing for which 

financing is extended,"; and 

(2) inserting in subsection 0?) after "Administration" in the 

first sentence "as provided in section 4.17 of this Act". 

SEC. 211. Section 2.16 of the Farm Credit Act of 1971 is amended by 12 use 2097. 

inserting "and aquatic" after "on-farm". 

TITLE III—BANKS FOR COOPERATIVES 

SEC. 301. Section 3.1 of the Farm Credit Act of 1971 is amended by— 12 use 2122. 

(1) inserting before the period at the end of paragraph (11) 

", and participate with one or more other Farm Credit System 

institutions in loans made under this title or other titles of this 

Act on the basis prescribed in section 4.18 of this Act"; Post, p. 3446. 

(2) inserting after "System" in the first sentence in paragraph 

(12) "or any insured State nonmember bank as defined in section 

2 oiFthe Federal Deposit Insurance Act or, to the extent necessary 12 use 264 note, 

to facilitate transactions which may be financed under section I811-1831. 

3.7(b) of this Act, any other financial organization, domestic or Post, p. 3444. 

foreign, as may be authorized by its board of directors and 

approved by the Farm Credit Administration"; 

(3) amending paragraph (13) by: 

(a) inserting immediately after "(13)" the designation 

"(A)"; 

(b) inserting after subparagraph (A) the following new 

subparagraphs (B) and (C): 

"(B) As may be authorized by its board of directors and approved by 

the Farm Credit Administration, buy from and sell to Farm Credit 

System institutions interests in loans and in other financial assistance extended and nonvoting stock. 

"(C) As may be authorized by its board of directors and approved by 

the Farm Credit Administration, and solely for the purposes of 

obtaining credit information and other services needed to facilitate 

transactions which may be financed under section 3.7(b) of this Act, 

invest in ownership interests in foreign business entities that are 

principally engaged in providing credit information to and performing such servicing functions for their members in connection with the 

members' international activities."; and 

(4) adding new paragraphs (18) and (19) as follows: 

"(18) As may be authorized by the board of directors and approved 

by the Farm Credit Administration, maintain credit balances and 

pay or receive fees or interest thereon, for the purpose of assisting in 

the transfer of funds to or from parties to transactions that may be 

financed under section 3.7(b) of this Act: Provided, however. That 

nothing herein shall authorize the banks for cooperatives to engage 

in the business of accepting domestic deposits. 

"(19) As may be authorized by its board of directors and approved 

by the Farm Credit Administration, agree with other Farm Credit 

System institutions to share loan or other losses, whether to protect 

against capital impairment or for any other purpose.". 

SEC. 302. Section 3.3 of the Farm Credit Act of 1971 is amended by 12 use 2124. 

adding a new subsection (f) as follows: 

"(f) Participation certificates may be issued to parties to whom 

voting stock may not be issued.". 
94 STAT. 3444 PUBLIC LAW 96-592—DEC. 24, 1980 

12 use 2126. SEC. 303. Section 3.5 of the Farm Credit Act of 1971 is amended by -

CD striking out the first three sentences and inserting in lieu 

thereof three new sentences as follows: "Any nonvoting stock 

held by the Governor of the Farm Credit Administration shall be 

12 use 2151. retired to the extent required by section 4.0(b) of this Act before 

any other outstanding voting or nonvoting stock or participation 

certificates shall be retired except as may be otherwise authorized by the Farm Credit Administration. When those requirements have been satisfied, nonvoting investment stock and 

participation certificates may be called for retirement at par. 

With the approval of the issuing bank, the holder may elect not 

to have the called stock or participation certificates retired in 

response to a call, reserving the right to have such stock or 

participation certificates included in the next call for retirement. ; and 

(2) striking out in the fourth sentence "fair book value not 

exceeding". 

12 use 2128. SEC. 304. Section 3.7 of the Farm Credit Act of 1971 is amended by -

CD adding the designation "Ca)" before the text, and inserting 

before "collateral custody" in the first sentence, "currency 

exchange necessary to service individual transactions that may 

be financed under subsection Cb) of this section,", and inserting 

before the period at the end of the third sentence "and may make 

or participate in loans or commitments and extend other technical and financial assistance to other domestic parties for the 

acquisition of equipment and facilities to be leased to such 

stockholders for use in their operations in the United States"; 

and 

Lending powers. (2) adding new subsections (b), Cc), Cd), and Ce) as follows: 

"Cb) A bank for cooperatives is authorized to make or participate in 

loans and commitments to, and to extend other technical and 

financial assistance to CD a domestic or foreign party with respect to 

its transactions with an association that is a voting stockholder of the 

bank for the export or import of agricultural commodities, farm 

supplies, or aquatic products through purchases, sales or exchanges, 

and C2) a domestic or foreign party in which such an association has at 

least the minimum ownership interest approved imder regulations of 

the Farm Credit Administration for the purpose of facilitating the 

association's export or import operations of the type described in 

clause CD of this subsection: Provided, That a bank for cooperatives 

determines, under regulations of the Farm Credit Administration, 

that the voting stockholder will benefit substantially as a result of 

such loan, commitment, or assistance. 

"Cc) Loans, commitments, and assistance authorized by subsection 

Cb) of this section shall be extended in accordance with policies 

adopted by the board of directors of the bank under regulations of the 

Farm Credit Administration. 

"Cd) The regulations of the Farm Credit Administration implementing subsection Cb) of this section and the other provisions of this title 

relating to the authority under subsection Oa) of this section may not 

confer upon the banl^ for cooperatives powers and authorities 

greater than those specified in this title. The Farm Credit Administration shall, during the formulation of such regulations, closely 

consult on a continuing basis with the Board of Governors of the 

Federal Reserve System to ensure that such regulations conform to 

national banking policies, objectives, and limitations. 

"Ce) Notwithstanding any other provision of this title, the banks for 

cooperatives shall not make or participate in loans or commitments 
PUBLIC LAW 96-592—DEC. 24, 1980 94 STAT. 3445 

for the purpose of financing speculative futures transactions by 

eligible borrowers in foreign currencies.". 

SEC. 305. Section 3.8 of the Farm Credit Act of 1971 is amended by— 12 use 2129. 

(1) in the first paragraph striking out the second comma and 

inserting "or aquatic" before "business"; 

(2) striking out in subsection (c) "or farm business services" 

and inserting in lieu thereof "farm or aquatic business services, 

or services to eligible cooperatives"; and 

(3) amending subsection (d) to read as follows: 

"(d) A percentage of the voting control of the association not less 

than 80 per centum (60 per centum (1) in the case of rural electric, 

telephone, public utility, and service cooperatives; (2) in the case of 

local farm supply cooperatives that have historically served needs of 

the community that would not adequately be served by other suppliers and have experienced a reduction in the percentage of farmer 

membership due to changed circumstances beyond their control such 

as, but not limited to, urbanization of the community; and (3) in the 

case of local farm supply cooperatives that provide or will provide 

needed services to a community and that are or will be in competition 

with a cooperative specified in paragraph (2)) or, with respect to any 

type of association or cooperative, such higher percentage as established by the district board, is held by farmers, producers or harvesters of aquatic products, or eligible cooperative associations as defined 

herein; . 

SEC. 306. Section 3.9(a) of the Farm Credit Act of 1971 is amended 12 use 2130. 

by striking out the first sentence and inserting in lieu thereof a new 

sentence as follows: "Each borrower entitled to hold voting stock 

shall, at the time a loan is made by a bank for cooperatives, own at 

least one share of voting stock and shall be required by the bank with 

the approval of the Farm Credit Administration to invest in 

additional voting stock or nonvoting investment stock at that time, or 

from time to time, as the lending bank may determine, but the 

requirement for investment in stock at the time the loan is closed 

shall not exceed an amount equal to 10 per centum of the face amount 

of the loan.". 

SEC. 307. Section 3.10 of the Farm Credit Act of 1971 is amended 12 use 2131. 

b y -

(1) inserting before the period in the first sentence of subsection (a) "as provided in section 4.17 of this Act"; and 

(2) striking out in the first sentence of subsection (d) "book" 

and inserting in lieu thereof "market" and adding a new sentence as follows: "In no event shall the bank's equities be retired 

or canceled if the retirement or cancellation would adversely 

affect the bank's capital structure, as determined by the Farm 

Credit Administration.". 

SEC. 308. Section 3.11 of the Farm Credit Act of 1971 is amended 12 use 2182. 

b y -

(1) striking out in the second sentence of subsection (b) "of less 

than 25 per centum" and "of not to exceed such per centum of net 

savings'; and 

(2) striking out the first sentence of subsection (c) and inserting 

in lieu thereof a new sentence as follows: "The net savings of 

each district bank for cooperatives, after the earnings for the 

fiscal year have been applied in accordance with subsection (a) or 

(b) of this section, whichever is applicable, shall be paid in stock, 

participation certificates, or cash, or in any of them, as determined by its board, as patronage refunds to borrowers to whom 

79-194 O—81—pt, 3 51 : QL3 
94 STAT. 3446 PUBLIC LAW 96-592—DEC. 24, 1980 

such refunds are payable who are borrowers of the fiscal year for 

which such patronage refunds are distributed.". 

TITLE IV—PROVISIONS APPLICABLE TO TWO OR MORE 

CLASSES OF INSTITUTIONS OF THE SYSTEM 

12 use 2156. SEC. 401. Section 4.5 of the Farm Credit Act of 1971 is amended by -

CD striking out in the first sentence "presidents of each bank" 

and inserting in lieu thereof "president of each bank or the 

president's designee"; and 

(2) striking out in the third sentence "subcommittee's" and 

inserting in lieu thereof "subcommittees". 

12 use 2181. SEC. 402. Section 4.10 of the Farm Credit Act of 1971 is amended by 

striking out "name" and inserting in lieu thereof "same". 

SEC. 403. Title IV of the Farm Credit Act of 1971 is amended by 

adding new sections 4.17,4.18,4.19, and 4.20 as follows: 

12 use 2205. "SEC. 4.17. INTEREST RATES.—Interest rates on loans from institutions of the Farm Credit System shall be determined with the 

approval of the Farm Credit Administration as provided in this Act, 

notwithstanding any interest rate limitation imposed by any State 

constitution or statute or other laws which are hereby preempted 

for purposes of this Act. Interest rates on loans made by agricultural 

credit corporations organized in conjunction with cooperative associations for the purpose of financing the ordinary crop operations of the 

members of such associations or other producers and eligible to 

discount with the Federal intermediate credit banks pursuant to 

Ante, p. 3440. section 2.3 of this Act shall be exempt from any interest rate 

limitation imposed by any State constitution or statute or other laws 

which are hereby preempted for purposes of this Act. 

12 use 2206. "SEC. 4.18. PARTICIPATION LOANS.—Notwithstanding any other 

provisions of this Act, the terms of any loan participated in by two or 

more Farm Credit System institutions operating under different 

titles of this Act, including provisions for capitalization of the portion 

of the loan participated in by each institution, shall be as may be 

agreed upon among such institutions and authorized by the Farm 

Credit Administration, except that for purposes of determining 

borrower eligibility, membership, term, amount, loan security, and 

purchase of stock or participation certificates by the borrower, the 

provisions of law applicable to the loan shall be the provisions in the 

title under which the institution that originates the loan operates. 

12 use 2207. "SEC. 4.19. YOUNG, BEGINNING, AND SMALL FARMERS AND 

RANCHERS.— 

"(a) Under policies of the district board, each Federal land bank 

association and production credit association shall prepare a program 

for furnishing sound and constructive credit and related services to 

young, beginning, and small farmers and ranchers. Such programs 

shall assure that such credit and services are available in coordination with other units of the Farm Credit System serving the territory 

and with other governmental and private sources of credit. Each 

program shall be subject to review and approval by the supervising 

bank. 

"(b) The Federal land bank and the Federal intermediate credit 

bank for each district shall annually obtain from associations under 

their supervision reports of activities under programs developed 

pursuant to subsection (a) of this section and progress toward program objectives. On the basis of such reports, the banks shall provide 

to the Farm Credit Administration a joint annual report summariz-
PUBLIC LAW 96-592—DEC. 24, 1980 94 STAT. 3447 

ing the operations and achievements in their district under such 

programs, 

"SEC. 4.20. TERMINATION OF PROVISIONS.—The provisions of (1) ^2 use 2208. 

section 2.3 authorizing the Federal intermediate credit banks to lend ^"^«' P 3440. 

to or discount paper for other financial institutions, and (2) section 

3.70t>) authorizing the financing of certain domestic or foreign entities Ante, p. 3444. 

in connection with the import or export activities of cooperatives 

which are borrowers from the banks for cooperatives, shall expire on 

September 30,1990, unless extended by Act of Congress prior to that 

date. Any contract or agreement entered into under the authority of 

either provision prior to its expiration shall remain in full force and 

effect notwithstanding such expiration.". 

SEC. 404. Title IV of the Farm Credit Act of 1971 is amended by 

adding at the end thereof new parts D and E as follows: 

"PART D—SERVICE ORGANIZATIONS 

"SEC. 4.25. ESTABLISHMENT.—Any bank of the Farm Credit System, 12 use 2211. 

or two or more of such banks acting together, may organize a 

corporation or corporations for the purpose of performing functions 

and services for or on behalf of the organizing bank or banks that the 

bank or banks may perform pursuant to this Act: Provided, That a 

corporation so organized shall have no authority either to extend 

credit or provide insurance services for borrowers from Farm Credit 

System institutions, nor shall it have any greater authority with 

respect to functions and services than the organizing bank or banks 

possess under this Act. The organizing bank or banks shall apply for a 

Federal charter for the corporation by forwarding to the Governor of 

the Farm Credit Administration a statement of the need for the 

corporation and proposed articles specifying in general terms the 

objectives for which the corporation is formed, the powers to be 

exercised by it in carrying out the functions and services, and the 

territory it is to serve. The Governor for good cause may deny the 

charter applied for. Upon the approval of articles by the Governor 

and the issuance of a charter, the corporation shall become as of such 

date a federally chartered body corporate and an instriunentality of 

the United States. 

"SEC. 4.26. POWERS OP THE GOVERNOR.—The Governor shall have 12 use 2212. 

power, under rules and regulations prescribed by the Governor or by 

prescribing in the terms of the charter or by approval of the bylaws of 

the corporation, to provide for the organization of anv corporation 

chartered under this part and the territory within which its operations may be carried on, and to direct at any time such changes in its 

charter as he finds necessary for the accomplishment of the purposes 

of this Act. The powers of the Governor to provide for the organization of any corporation chartered under this part include, but are not 

limited to approval of— 

"(1) corporate title; 

"(2) general corporate powers; 

"(3) eligibility for membership on, and the powers, composition, selection, terms, and compensation of the board of directors; 

"(4) classes, issuance, value, and retirement of stock; 

"(5) sources of operating funds; 

"(6) dissolution, liquidation, and distribution of assets on 

liquidation; and 

(7) application and distribution of earnings. 

"SEC. 4.27. SUPERVISION AND EXAMINATION.—The corporations 12 use 2213. 

organized under this part shall be institutions of the Farm Credit 
94 STAT. 3448 PUBLIC LAW 96-592—DEC. 24, 1980 

12 us e 2214. 

12 us e 2055, 

2079, 2134. 

12 us e 2218. 

12 us e 2019, 

2033, 

2076, 2097. 

Regulations. 

Existing 

coverage, 

continuation. 

Virgin Islands, 

extension of 

credit 

and services. 

12 us e 2221. 

System and shall be subject to the same supervision and examination 

by the Farm Credit Administration as are the organizing bank or 

banks under this Act. 

"SEC. 4.28. STATE LAWS.—State and other laws shall apply to 

corporations organized pursuant to this part to the same extent such 

laws would apply to the organizing banks engaged in the same 

activity in the same jurisdiction: Provided, however, That to the 

extent that sections L21, 2.8, and 3.13 of this Act may exempt banks 

of the Farm Credit System from taxation, such exemptions, other 

than with respect to franchise taxes, shall not extend to corporations 

organized pursuant to this part. 

"PART E—SALE OF INSURANCE 

"SEC. 4.29. LINES OF INSURANCE.—(a) The regulations of the Farm 

Credit Administration governing financially related services that the 

banks and associations of the Farm Credit System may provide under 

sections 1.11, 1.15, 2.5, and 2.16 of this Act may authorize the sale to 

any member of any such bank or association, on an optional basis, of 

credit or term life and credit disability insurance appropriate to 

protect the loan commitment in the event of death or disability of the 

debtors and other insurance necessary to protect the member's farm 

or aquatic unit, but limited to, hail and multiple-peril crop insurance, 

title insurance, and insurance to protect the facilities and equipment 

of aquatic borrowers. 

"(b) Such regulations shall provide that— 

"(1) in any case in which insurance is required as a condition 

for a loan or other financial assistance from a bank or association, notice be given that it is not necessary to purchase the 

insurance from the bank or association and that the borrower 

has the option of obtaining the insurance elsewhere; 

"(2) such insurance services may be offered only if— 

"(i) the bank or association has the capacity to render 

insurance service under this Act in an effective and efficient 

manner; 

"(ii) there exists the probability that any insurance program under this Act will generate sufficient revenue to 

cover all costs; and 

"(iii) rendering insurance service will not have an adverse 

effect on the bank's or association's credit or other operations; and 

"(3) no bank or association shall directly or indirectly discriminate in any manner against any agent, broker, or insurer that is 

not affiliated with such bank or association, or against any party 

who purchases insurance through any such nonaffiliated insurance agent, broker, or insurer. 

"(c) Notwithstanding any provision of this section to the contrary, 

any bank or association that on the date of enactment of the Farm 

Credit Act Amendments of 1980, is offering insurance coverages not 

authorized by this section may continue to sell such coverages for a 

period of not more than one year from such date of enactment and 

may continue to service such coverages until their expiration.". 

TITLE V—DISTRICT AND FARM CREDIT ADMINISTRATION 

ORGANIZATION 

SEC. 501. Section 5.0 of the Farm Credit Act of 1971 is amended by 

inserting before the period at the end of the first sentence the 
PUBLIC LAW 96-592—DEC. 24, 1980 94 STAT. 3449 

following: "and one of which districts may, if authorized by the 

Federal Farm Credit Board, include the Virgin Islands of the United 

States: Provided, That the extension of credit and other services 

authorized by this Act in the Virgin Islands of the United States shall 

be undertaken only if determined to be feasible under regulations of 

the Farm Credit Administration". 

SEC. 502. Section 5.2 of the Farm Credit Act of 1971 is amended by— 

(1) striking out in the last sentence of subsection (b) "three" 

and inserting in lieu thereof "two"; and 

(2) striking out in the first sentence of subsection (c) "three" 

and inserting in lieu thereof "two". 

SEC. 503. Section 5.8(h) of the Farm Credit Act of 1971 is amended 

by striking out in the first sentence "the sum of $100 a day" and 

inserting in lieu thereof "compensation at a rate equal to the daily 

equivalent of the rate prescribed for grade GS-18 under section 5332 

of title 5 of the United States Code". 

SEC. 504. Section 5.10 of the Farm Credit Act of 1971 is amended by 

inserting after the second sentence a new sentence as follows: 

"Pursuant to a policy statement adopted by the Federal Farm Credit 

Board, the Governor of the Farm Credit Administration shall consult 

on a regular basis with the Secretary of the Treasury in connection 

with the exercise by the System and the Governor of the powers 

conferred under section 4.2 of this Act, and with the Board of 

Governors of the Federal Reserve System in connection vdth the 

effect of System lending activities on national monetary policy.". 

SEC. 505. Section 5.15 of the Farm Credit Act of 1971 is amended by 

adding at the end thereof a new sentence as follows: "The Farm 

Credit Administration may dispose of property so acquired and any 

amounts collected from the disposition of such property shall be 

deposited in the special fund provided for in section 5.160t)) of this Act 

and shall be available to the Administration in the same manner and 

for the same purposes as the funds collected under section 5.16(a) of 

this Act." 

SEC. 506. Section 5.17 of the Farm Credit Act of 1971 is amended by 

adding at the end thereof the following new clause (5) and inserting a 

new sentence immediately thereafter: 

"(5) To sell or otherwise dispose of any interest in property leased 

or acquired under the foregoing if authorized by the Board. 

In actions undertaken by the banks pursuant to the foregoing 

provisions of this section, the Farm Credit Administration may act as 

agent for the banks.". 

SEC. 507. Section 5.18 of the Farm Credit Act of 1971 is amended by 

adding at the end of paragraph (3) a new sentence as follows: "The 

annual reports shall include a summary and analysis of the reports 

submitted to the Farm Credit Administration by the Federal land 

banks and Federal intermediate credit banks under section 4.19(b) of 

this Act relating to programs for serving young, beginning, and small 

farmers and ranchers.". 

SEC. 508. Section 5.18 of the Farm Credit Act of 1971 is amended by 

inserting "(a)" immediately after the section designation and adding 

at the end thereof the following new subsections (b) and (c): 

"Ob)(l) At least thirty days prior to publishing any proposed 

regulation in the Federal Register, the Farm Credit Administration 

shall transmit a copy of the regulation to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate. The Farm Credit 

Administration shall also transmit to such committees a copy of any 

final regulation prior to its publication in the Federal Register. 

12 us e 2223. 

12 us e 2242. 

12 us e 2244. 

12 us e 2153. 

Property 

disposal. 

12 us e 2249. 

12 us e 2250. 

Property 

interests, 

sale and 

disposal. 

12 us e 2251. 

Annual reports. 

12 us e 2252. 

Ante, p. 3446. 

Proposed and 

final 

regulations. 

12 us e 2252. 

Transmittal to 

congressional 

committees. 
94 STAT. 3450 PUBLIC LAW 96-592—DEC. 24, 1980 

Emergency 

effective date. 

Transmittal to 

Congress. 

Congressional 

approval. 

Ante, p. 3444. 

12 us e 2121. 

Ante, p. 3440. 

12 us e 2260. 

Except as provided in paragraph (2) of this subsection, no final 

regulation of the Farm Credit Administration shall become effective 

prior to the expiration of thirty calendar days after it is published in 

the Federal Register during which either or both Houses of the 

Congress are in session. 

"(2) In the case of an emergency, a final regulation of the Farm 

Credit Administration may become effective without regard to the 

last sentence of paragraph (1) of this subsection if the Farm Credit 

Administration notifies in writing the Committee on Agriculture of 

the House of Representatives and the Committee on Agriculture, 

Nutrition, and Forestry of the Senate setting forth the reasons why it 

is necessary to make the regulation effective prior to the expiration of 

the thirty-day period. 

"(c)(1) If there are any unresolved differences between the Farm 

Credit Administration and the Board of Governors of the Federal 

Reserve System as to whether any regulation implementing section 

3.7(b) of this Act or the other provisions of title III relating to the 

authority under section 3.7(b) conforms to national banking policies, 

objectives, and limitations, simultaneously with promulgation of any 

such regulation under this Act, and simultaneously with promulgation of any regulation implementing section 2.3 of tnis Act, the Farm 

Credit Administration shall transmit a copy thereof to the Secretary 

of the Senate and the Clerk of the House of Representatives. Except 

as provided in paragraph (2), the regulation shall not become effective 

if, within ninety calendar days of continuous session of Congress after 

the date of promulgation, both Houses of Congress adopt a concurrent 

resolution, the matter after the resolving clause of which is as 

follows: 'That Congress disapproves the regulation promulgated by 

the Farm Credit Administration dealing with the matter of 

, which regulation was transmitted to Congress on 

', the blank spaces therein being appropriately 

filled. 

"(2) If at the end of sixty calendar days of continuous session of 

Congress after the date of promulgation of a regulation, no committee 

of either House of Congress has reported or been discharged from 

further consideration of a concurrent resolution disapproving the 

regulation, and neither House has adopted such a resolution, the 

regulation may go into effect immediately. If, within such sixty 

calendar days, such a committee has reported or been discharged 

from further consideration of such a resolution, or either House has 

adopted such a resolution, the regulation may go into effect not 

sooner than ninety calendar days of continuous session of Congress 

after its promulgation unless disapproved as provided in paragraph 

(1). 

"(3) For the purposes of paragraphs (1) and (2) of this subsection— 

"(i) continuity of session is broken only by an adjournment of 

Congress sine die; and 

"(ii) the days on which either House is not in session because of 

an adjournment of more than three days to a day certain are 

excluded in the computation of sixty and ninety calendar days of 

continuous session of Congress. 

"(4) Congressional inaction on or rejection of a resolution of 

disapproval shall not be deemed an expression of approval of such 

regulation.". 

SEC. 509. Title V of the Farm Credit Act of 1971 is amended by 

adding the following section at the end thereof: 

"SEC. 5.30. GENERAL ACCOUNTING OFFICE AUDIT: REPORT TO 

CONGRESS.— 
PUBLIC LAW 96-592—DEC. 24, 1980 94 STAT. 3451 

"(a) The Comptroller General shall conduct an evaluation of the 

programs and activities authorized under the 1980 amendments to 

this Act, and shall make an interim report to the Congress no later 

than December 31, 1982, and a final report to the Congress no later 

than December 31, 1984. The Comptroller General shall include in 

such evaluation the effect that this Act, as amended, will have on 

agricultural credit services provided by the Farm Credit System, 

Federal agencies, and other entities. The Comptroller General may 

make such interim reports to the Congress on the programs and 

activities under these amendments as the Comptroller General 

deems necessary or as requested by Members of Congress. 

"(h) For the purpose of conducting program evaluations required in 

subsection (a) of this section, the Comptroller General or his duly 

authorized representatives shall have access to and the right to 

examine all books, documents, papers, records, or other recorded 

information within the possession or control of the Federal land 

banks and Federal land bank associations, Federal intermediate 

credit banks and production credit associations and banks for 

cooperatives.". 

SEC. 510. Paragraph (1) of section 1141b of title 12 of the United 

States Code is amended to read as follows: 

"(1) shall maintain its principal office within the Washington, 

D.C.-Maryland-Virginia standard metropolitan statistical area, 

and such other offices in the United States as in its judgment are 

necessary". 

SEC. 511. Section 3 of the Swine Health Protection Act (Public Law 

96-468, approved October 17,1980) is amended by— Ante, p. 2229. 

(1) striking "and" at the end of clause (2); 

(2) changing the period at the end of (jjause (3) to a semicolon 

and adding "and"; and 

(3) inserting a new clause (4) reading as follows: 

"(4) the term 'State' means the fifty States, the District of 

Columbia, Guam, Puerto Rico, the Virgin Islands of the United 

States, American Samoa, the Commonwealth of the Northern 

Mariana Islands, and the territories and possessions of the 

United States.". 

Approved December 24, 1980. 

LEGISLATIVE HISTORY: 

HOUSE REPORT No. 96-1287 accompanying H.R. 7548 (Comm. on Agriculture). 

SENATE REPORT No. 96-837 (Comm. on Agriculture, Nutrition, and Forestry). 

CONGRESSIONAL RECORD, Vol. 126 (1980): 

July 24, considered and passed Senate. 

Nov. 19, H.R. 7548 considered and passed House; passage vacated and S. 1465, 

amended, passed in lieu. 

Dec. 13, Senate agreed to House amendment. 

WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 16, No. 52: 

Dec. 24, Presidential statement.