Farm Credit Act Amendments of 1980
PL 96-592 (S.1465), enacted 12/24/1980

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 u s e 2001 
note. 
SEC. 101. Section 1.4 of 
the Farm Credit Act of 1971 is amended by— 1
2 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 para-
graph (15) and inserting in lieu thereof "and, as m ^ be author-
ized 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 insert-
ing 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 Admuiistra-
tion, 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 use 2014. 
12 u s e 2015. 
Post, p. 3446. 
12 use 2016. 
Loan security. 
12 use 2017. 
12 use 2018. 
12 u s 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, participa-
tion 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 -
C
D 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. 
b y -
(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 certifi-
cates 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 prefer-
ence.". 
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 institu-
tions" 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 subsec-
tion (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 pro-
ducers 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 guaran-
tee, 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 partici-
pate 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 author-
ized 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 subsec-
tion, a financing institution together with its subsidiaries and affili-
ates 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". 
1
2 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. 
1
2 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 accord-
ance 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 Adminis-
tration, 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 
b y -
(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 institu-
tion 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". 
1
2 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 prod-
ucts: 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 1
2 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— 1
2 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 1
2 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 assist-
ance 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 perform-
ing 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 1
2 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 
1
2 use 2126. 
SEC. 303. Section 3.5 of 
the Farm Credit Act of 1971 is amended b y -
C
D 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 
1
2 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 author-
ized by the Farm Credit Administration. When those require-
ments 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 retire-
ment. ; and 
(2) striking out in the fourth sentence "fair book value not 
exceeding". 
1
2 use 2128. 
SEC. 304. Section 3.7 of 
the Farm Credit Act of 1971 is amended b y -
C
D 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 C
b
) 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 techni-
cal 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 C
e
) 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 C
D 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 C
2
) 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 C
D 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 
C
b
) 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 implement-
ing subsection C
b
) of this section and the other provisions of this title 
relating to the authority under subsection O
a
) of this section may not 
confer upon the banl^ for cooperatives powers and authorities 
greater than those specified in this title. The Farm Credit Adminis-
tration 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— 1
2 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 suppli-
ers 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 estab-
lished by the district board, is held by farmers, producers or harvest-
ers 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 1
2 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 1
2 use 2131. 
b y -
(1) inserting before the period in the first sentence of subsec-
tion (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 sen-
tence 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 1
2 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 deter-
mined 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 b y -
C
D 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 institu-
tions 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 associ-
ations 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 coordina-
tion 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 pro-
gram 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, 1
2 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 oper-
ations 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 organiza-
tion of any corporation chartered under this part include, but are not 
limited to approval o
f
— 
"(1) corporate title; 
"(2) general corporate powers; 
"(3) eligibility for membership on, and the powers, composi-
tion, 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 1
2 use 2213. 
organized under this part shall be institutions of the Farm Credit 
94 STAT. 3448 
PUBLIC LAW 96-592—DEC. 24, 1980 
12 u s e 2214. 
12 u s e 2055, 
2079, 2134. 
12 u s e 2218. 
12 u s e 2019, 
2033, 
2076, 2097. 
Regulations. 
Existing 
coverage, 
continuation. 
Virgin Islands, 
extension of 
credit 
and services. 
12 u s 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 associ-
ation, 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 pro-
gram 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 oper-
ations; and 
"(3) no bank or association shall directly or indirectly discrimi-
nate 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 insur-
ance 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 Agricul-
ture of the House of Representatives and the Committee on Agricul-
ture, 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 u s e 2223. 
12 u s e 2242. 
12 u s e 2244. 
12 u s e 2153. 
Property 
disposal. 
12 u s e 2249. 
12 u s e 2250. 
Property 
interests, 
sale and 
disposal. 
12 u s e 2251. 
Annual reports. 
12 u s e 2252. 
Ante, p. 3446. 
Proposed and 
final 
regulations. 
12 u s 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 u s e 2121. 
Ante, p. 3440. 
12 u s 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 promulga-
tion 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.