HR 4379 RDS
SEC. 2. PARTICIPATION DEFINED.
Section 3.1(11)(B) of the Farm Credit Act of 1971
(12 U.S.C. 2122(11)(B)) is amended by adding at the end
the following new clause:
‘‘(iv) As used in this subparagraph, the term
‘participate’ or ‘participation’ refers to multilender
transactions, including syndications, assignments,
loan participations, subparticipations, or other forms
of the purchase, sale, or transfer of interests in
loans, other extensions of credit, or other technical
and financial assistance.’’.
SEC. 3. AGRICULTURAL EXPORT FINANCING.
Section 3.7(b) of the Farm Credit Act of 1971 (12
U.S.C. 2128(b)) is amended—
(A) in paragraph (1)—
(i) by striking ‘‘assistance to (A)’’ and in-
serting ‘‘assistance to’’;
(ii) by striking ‘‘the export or’’ and insert-
ing ‘‘the’’; and
(iii) by striking ‘‘and (B)’’ and all that fol-
lows through ‘‘subparagraph (A): Provided,
That a’’ and inserting ‘‘if the’’; and
(B) by striking paragraph (2) and inserting the
following new paragraph:
HR 4379 RDS
‘‘(2)(A) A bank for cooperatives may make or partici-
pate in loans and commitments to, and extend other tech-
nical and financial assistance to—
‘‘(i) any domestic or foreign party for the ex-
port, including (where applicable) the cost of freight,
of agricultural commodities or products thereof,
farm supplies, or aquatic products from the United
States under policies and procedures established by
the bank to ensure that the commodities, products,
or supplies are originally sourced, where reasonably
available, from one or more eligible cooperative asso-
ciations described in section 3.8(a) on a priority
basis, except that if the total amount of the balances
outstanding on loans made by a bank under this
clause that—
‘‘(I) are made to finance the export of
commodities, products, or supplies that are not
originally sourced from a cooperative, and
‘‘(II) are not guaranteed or insured, in an
amount equal to at least 95 percent of the
amount loaned, by a department, agency, bu-
reau, board, commission, or establishment of
the United States or a corporation wholly-
owned directly or indirectly by the United
States,
HR 4379 RDS
exceeds an amount that is equal to 50 percent of the
bank’s capital, then a sufficient interest in the loans
shall be sold by the bank for cooperatives to com-
mercial banks and other non-System lenders to re-
duce the total amount of such outstanding balances
to an amount not greater than an amount equal to
50 percent of the bank’s capital; and
‘‘(ii) except as provided in subparagraph (B),
any domestic or foreign party in which an eligible
cooperative association described in section 3.8(a)
(including, for the purpose of facilitating its domes-
tic business operations only, a cooperative or other
entity described in section 3.8(b)(1)(A)) has an own-
ership interest, for the purpose of facilitating the do-
mestic or foreign business operations of the associa-
tion, except that if the ownership interest by an eli-
gible cooperative association, or associations, is less
than 50 percent, the financing shall be limited to the
percentage held in the party by the association or
associations.
‘‘(B) A bank for cooperatives shall not use the au-
thority provided in subparagraph (A)(ii) to provide finan-
cial assistance to a party for the purpose of financing the
relocation of a plant or facility from the United States
to another country.’’.
HR 4379 RDS
SEC. 4. CONFORMING AMENDMENT.
Section 3.8(b)(1) of the Farm Credit Act of 1971 (12
U.S.C. 2129(b)(1)) is amended—
(A) by striking subparagraph (B);
(B) by redesignating subparagraphs (C), (D),
and (E) as subparagraphs (B), (C), and (D), respec-
tively; and
(C) by aligning the margin of subparagraph (D)
(as so redesignated) so as to align with the margin
of subparagraph (C) (as so redesignated).
SEC. 5. LOAN 
PARTICIPATION 
AUTHORITY 
FOR 
FARM
CREDIT BANKS AND DIRECT LENDER ASSO-
CIATIONS.
(a) IN GENERAL.—Title IV of the Farm Credit Act
of 1971 (12 U.S.C. 2151 et seq.) is amended by inserting
after section 4.18 (12 U.S.C. 2206) the following new sec-
tion:
‘‘SEC. 4.18A. AUTHORITY OF FARM CREDIT BANKS AND DI-
RECT LENDER ASSOCIATIONS TO PARTICI-
PATE IN LOANS TO SIMILAR ENTITIES FOR
RISK MANAGEMENT PURPOSES.
‘‘(a) DEFINITIONS.—As used in this section:
‘‘(1) PARTICIPATE
AND
PARTICIPATION.—The
terms ‘participate’ and ‘participation’ shall have the
meaning provided in section 3.1(11)(B)(iv).
HR 4379 RDS
‘‘(2) SIMILAR ENTITY.—The term ‘similar en-
tity’ means a person that—
‘‘(A) is not eligible for a loan from the
Farm Credit Bank or association; and
‘‘(B) has operations that are functionally
similar to a person that is eligible for a loan
from the Farm Credit Bank or association in
that the person derives a majority of the income
of the person from, or has a majority of the as-
sets of the person invested in, the conduct of
activities that are functionally similar to the ac-
tivities that are conducted by an eligible person.
‘‘(b) LOAN PARTICIPATION AUTHORITY.—Notwith-
standing any other provision of this Act, any Farm Credit
Bank or direct lender association chartered under this Act
may participate in any loan of a type otherwise authorized
under title I or II made to a similar entity by any person
in the business of extending credit, except that a Farm
Credit Bank or direct lender association may not partici-
pate in a loan under this section if—
‘‘(1) the participation would cause the total
amount of all participations by the Farm Credit
Bank or association under this section involving a
single credit risk to exceed 10 percent (or the appli-
cable higher lending limit authorized under regula-