An Act to provide for consumers a further means of minimizing the impact of inflation and economic depression by narrowing the price spread between costs to the producer and the consumer of needed goods, services, facilities, and commodities through the development and funding of specialized credit sources for, and technical assistance to, self-help, not-for-profit cooperatives, and for other purposes.
PL 95-351 (H.R.2777), enacted 08/20/1978

PUBLIC LAW 95-351—AUG. 20, 1978 
92 STAT. 499 
Public Law 95-351 
95th Congress 
An Act 
National 
Consumer 
Cooperative Bank 
Act 
12 u s e 3001 
note. 
12 u s e 3001. 
To provide for consumers a further means of minimizing the impact of inflation 
Aug. 20, 197a_ 
and economic depression by narrowing the price spread between costs to the 
[H.R. 2777] 
producer and the consumer of needed goods, services, facilities, and com-
modities through the development and funding of specialized credit sources 
for, and technical assistance to, self-help, not-for-profit cooperatives, and for 
other purposes. 
Be it enacted hy the Se7iate arid House of Representatives of the 
United States of America in Congress assembled^ That this Act may 
be cited as the "National Consumer Cooperative Bank Act". 
STATEMENT OF FINDINGS AND PURPOSE 
SEC. 2. The economic and financial structure of this country in com-
bination with the Nation's natural resources and the productivity of 
the American people has produced one of the highest average stand-
ards of living in the world. However, the Nation has been experienc-
ing inflation and unemployment together with an increasing gap 
between producers' prices and consumers' purchasing power. This has 
resulted in a growing number of our citizens, especially the elderly, 
the poor, and the inner city resident, being unable to share in the fruits 
of our Nation's highly efficient economic system. The Congress finds 
that user-owned cooperatives are a proven method for broadening 
ownership and control of the economic organizations, increasing the 
number of market participants, narrowing price spreads, raising the 
quality of goods and services available to their membership, and build-
ing bridges between producers and consumers, and their members and 
patrons. The Congress also finds that consumer and other types of self-
help cooperatives have been hampered in their formation and growth 
by lack of access to adequate cooperative credit facilities and lack of 
technical assistance. Therefore, the Congress finds a need for the 
establishment of a National Consumer Cooperative Bank which will 
make available necessary financial and technical assistance to coopera-
tive self-help endeavors as a means of strengthening the Nation's 
economy. 
TITLE I—NATIONAL CONSUMER COOPERATIVE BANK 
CREATION AND CHARTER OF BANK 
SEC. 101. There is hereby created and chartered a body corporate, 12 USC 3011. 
the National Consumer Cooperative Bank, hereinafter referred to as 
the "Bank", as an instrumentality of the United States, and until 
otherwise provided, shall be a mixed ownership Government corpora-
tion. The Bank shall have perpetual existence unless and until its 
charter is revoked or modified by Act of Congress. The right to revise, 
amend, or modify the charter of the Bank is specifically and exclu-
sively reserved to the Congress. The principal office of the Bank shall 
be in Washington, District of Columbia, and, for the purpose of 
venue, shall be considered a resident thereof. It shall make loans and 
92 STAT. 500 
PUBLIC LAW 95-351—AUG. 20, 1978 
offer its services throughout the United States, its territories and 
possessions, and in the Commonwealth of Puerto Rico. The Bank 
shall— 
(1) encourage the development of new and existing coopera-
tives eligible for its assistance by providing specialized credit and 
technical assistance; 
(2) maintain broad-based control of the Bank by its voting 
stockholders; 
(3) encourage broad-based ownership, control, and active par-
ticipation by members in eligible cooperatives; 
(4) assist in improving the quality and availability of goods 
and services to consumers; and 
(5) encourage ownership of its equity securities by cooperatives 
and others as provided in section 104, so that the date when all 
of the Bank's class A stock owned by the United States has been 
fully redeemed (the "Final Government Equity Redemption 
Date") occurs as early as practicable. 
GENERAL CORPORATE POWERS 
12 use 3012. 
SEC. 102. The Bank shall have the power to make and service loans, 
commitments for credit, guarantees, furnish financially related serv-
ices, technical assistance and the results of research, issue its obliga-
tions within the limitations imposed by section 107 in such amounts, 
at such times, and on such terms as the Bank may determine, and to 
exercise the other powers and duties prescribed in this Act, and shall 
have the power to— 
(1) operate under the direction of its Board of Directors; 
(2) adopt, alter, and use a corporate seal, which shall be judi-
cially noted; 
(3) elect by its Board of Directors a president, one or more 
vice presidents, a secretary, a treasurer, and provide for such 
other officers, employees, and agents as may be necessary, and 
define their duties in accordance with regulations and standards 
adopted by the Board, and require surety bonds or make other 
provisions against losses occasioned by acts of employees; 
(4) prescribe by its Board of Directors its bylaws not incon-
" 
sistent with law, which shall establish the terms of office and the 
procedure for election of elective members; provide in a manner 
not inconsistent with this Act for the classes of its stock and the 
manner in which its stock shall be issued, transferred, and retired; 
and prescribe the manner in which its officers, employees, and 
agents are elected or selected, its property acquired, held and 
transferred, its loans, commitments, other financial assistance, 
guarantees and appraisals may be made, its general business con-
ducted, and the privilege granted it by law exercised and enjoyed; 
(5) enter into contracts and make advance, progress, or other 
payments with respect to such contracts, without regard to the 
31 use 529. 
provisions of section 3648 of the Revised Statutes; 
(6) sue and be sued in its corporate name and complain and 
defend, in any court of competent jurisdiction. State or Federal; 
(7) acquire, hold, lease, mortgage, or dispose of, at public or 
private sale, real and personal property and sell or exchange any 
securities or obligations, and otherwise exercise all the usual inci-
dents of ownership of property necessary or convenient to its 
PUBLIC LAW 95-351—AUG. 20, 1978 
92 STAT. 501 
31 use 529. 
business: Provided^ That any such acquisition or ownership of 
real property shall not deprive a State or political subdivision 
thereof of its civil or criminal jurisdiction in and over such prop-
erty or impair the civil rights of the inhabitants of such property 
under Federal, State, or local laws; 
(8) obtain insurance against loss in connection with property 
and other assets; 
(9) modify or consent to the modification with respect to the 
rate of interest, time of payment of any installment of principal 
or interest, security, or any other term of any contract or agree-
ment to which it is a party or has an interest pursuant to this Act; 
(10) utilize and act through any Federal, State, or local public 
agency or instrumentality, or private agency or organization, 
with the consent of the agency or organization concerned, and 
contract with such agency, instrumentality, or organization for 
furnishing or receiving technical services and benefits of research, 
services, funds or facilities; and make advance, progress, or other 
payments wdth respect to such contracts without regard to section 
3648 of the Revised Statutes; 
(11) within the limitations of section 107, borrow money and 
issue notes, bonds and debentures or other obligations individ-
ually or in concert with other financial institutions, agencies 
or instrumentalities, of such character and such terms and con-
ditions and at rates of interest as may be determined; 
(12) issue certificates of indebtedness to its stockholders or 
members and pay interest on funds left with the Bank, and accept 
grants or interest free temporary use of funds made available to it; 
(13) participate with one or more other financial institutions, 
agencies, instrumentalities, or foundations in loans or guarantees 
under this Act on terms as may be agreed upon; 
(14) accept guarantees from other agencies for which loans 
made by the Bank may be eligible; 
(15) establish one or more branch offices and one or more advi-
sory councils in connection with any such branch offices, as may 
from time to time be authorized by the Board of Directors; 
(16) buy and sell obligations of, or insured by, the United 
States or any agency or instrumentalities thereof, or securities 
backed by the full faith and credit of any such agency or instru-
mentality and, after the final Government Equity Redemption 
Date, make such other investments as may be authorized by the 
Board of Directors; 
(17) approve the salary scale of officers and employees of the Regulations. 
Bank, in accordance with regulations and standards adopted by 
the Board of Directors, without regard to the provisions of 
chapter 51 and subchapter ITT of chapter 53 of such title relating 
to classification and General Schedule pay rates, but, except as 
otherwise provided in this Act, the General Schedule pay rates 
shall be applicable until all class A stock held by the Secretary of 
the Treasury has been retired: and 
(18) have such other incidental powers as may be necessary 
or expedient to carrv out its duties under this Act. 
The stock or other securities or instruments issued by the Bank shall, 
to the same extent as securities which are the direct obligations of the 
United States, be "exempt securities" within the meaning of the laws 
administered by the Securities and Exchange Commission. 
5 use 5101 
et seq. 
5 use 5331. 
92 STAT. 502 
PUBLIC LAW 95-351—AUG. 20, 1978 
BOARD OF DIRECTORS 
12 use 3013. 
SEC. 103. (a) The Bank shall be governed by a Board of Directors 
(hereinafter referred to as the "Board") which shall consist of thirteen 
members. Subject to the provisions of subsection (b) of this section, 
all members of the Board shall be appointed by the President, with 
the advice and consent of the Senate, for terms of three years or 
until their successors have been appointed and qualified. The Presi-
dent shall appoint seven membere of the Board from an\ong the 
officers of the agencies and departments of the United States Govern-
ment : Provided^ That at any one time no more than one member shall 
be from any one agency or department. The remaining members shall 
be from the general public (and not from the officers or employees 
of the United States Government) but shall have extensive experience 
in the cooperative field representative of the following classes of 
cooperatives: (1) housing, (2) consumer goods, (3) low-income coop-
eratives, (4) consumer services, and (5) all other eligible cooperatives, 
and for these appointments the President shall consider nominees sub-
mitted by national associations of cooperatives. Any member appointed 
by the President may be removed at any time with or without cause 
by the President. If a vacancy occurs on the Board for any reason 
other than a resignation pursuant to subsection (b) of this section, 
a new member shall be appointed by the President to serve until the 
next annual meeting of the Bank, at which time the vacancy shall be 
filled for the remainder of the unexpired term by the President or 
the holders of class B and class C stock, as provided in this section 104. 
(b) At the first annual meeting occurring after the time when the 
amount of paid-in capital of the Bank attributable to the shares of 
class B stock and class C stock equals or exceeds $3,000,000, three 
members of the Board appointed by the President from the general 
public shall resign. Similarly, when the amount of paid-in capital 
attributable to the shares of class B and class C stock equals or exceeds 
SfilO,000,000 the terms of the other three members appointed by the 
President from the general public shall terminate. An additional mem-
ber of the Board designated by the President (who shall be a member 
who had been appointed by the President) shall resign at each of the 
annual meetings occurring after the time when the amount of paid-in 
capital attributable to the class B and class C stock equals or exceeds 
seven-thirteenths and eight-thirteenths of the total amount of paid-in 
capital of the Bank. As members of the Board resign in accordance 
with the foregoing provisions, the directorships vacated shall be 
deemed shareholder directorships and shall be filled by the holders of 
class B stock and class C stock in accordance with the provisions of 
subsection (c) of this section. Five remaining members of the Board 
appointed by the President shall resign on the Final Government 
Equity Redemption Date. Thereafter, one member of the Board shall 
continue to be appointed by the President from among proprietors of 
small business concerns, as defined under section 3 of the Small Busi-
15 use 632. 
ness Act, which are manufacturers or retailers. 
(c) At all elections of Directors by holders of class B stock and 
class C stock, nominations shall be made by the classes of eligible 
cooperatives specified in subsection (a). Vacant shareholder director-
ships shall be filled, whether by appointment or election, so that at 
any time when there are three or more shareholder directors on the 
board, there shall be at least one director representing each of the 
classes of housing cooperatives, low-income cooperatives, and consumer 
goods and services cooperatives. Each nominee for shareholder direc-
PUBLIC LAW 95-351—AUG. 20, 1978 
92 STAT. 503 
torship of a particular class shall have at least three years experience 
as a director or senior officer in the class of cooperatives to be repre-
sented. No one class of cooperatives specified in subsection (a) shall 
be represented on the Board by more than three directors. 
(d) When all five remaining members of the Board appointed by 
the President have resigned pursuant to subsection (b) of this section, 
their successors and the successors to shareholder directors shall there-
after be elected pursuant to such rules as the Board may from time to 
time prescribe in the bylaws of the Bank. 
(e) No director shall be eligible to be elected for more than two 
consecutive full three-year terms. No officer of the Bank shall be 
eligible to serve simultaneously as a director on the Board of the 
Bank. The Bank shall give adequate advance notice to all voting stock-
holders of nominees and of the procedures for nominating other candi-
dates. Each voting stockholder shall make the information required 
in this paragraph available to its members. 
(f) The Board shall annually elect from among its membei's a chair-
man and vice chairman and select a secretary who need not be a mem-
ber. The Board shall establish the policies of the Bank governing its 
funding, lending, and other financial and technical assistance, and 
shall direct the management of the Bank. 
(g) The Board shall meet at least quarterly. Its meeting shall be Rules, 
open to members or representatives or all eligible cooperatives and 
other eligible organizations, as observers only, and to persons or repre-
sentatives of groups who identify their interest in the Bank and who 
are invited to attend a meeting, subject to such rules as the Board may 
establish for the conduct of such meetings. Those rules shall include 
the manner of giving notice of meetings, the procedure for the conduct 
of meetings, the manner of submitting topics for the agenda, the allo-
cation of time of presentations, and debate. The chairman, when sus-
tained by the majority of the Board present, may adjourn the open 
meeting into an executive session on motion of the chairman, any Board 
member, or at the request of any applicant, borrower, officer, or 
employee when the matter under discussion involves an application, a 
loan, a personnel action, or other matter which might tend to impinge 
on the right of privacy of any person. 
(h) Members of the Board appointed by the President from among 
the officers of the agencies and departments of the United States Gov-
ernment shall not receive any additional compensation by virtue of 
their service on the Board. Until the Final Government Equity 
Redemption Date, members of the Board appointed by the President 
from among the general public or elected by the holders of the class 
B and class C stock shall (1) receive compensation at a rate equal to 
the daily equivalent of the rate prescribed for grade GS-18 under sec-
tion 5332 of title 5, United States Code, for each day that they are 
engaged in the performance of their duties on the Board, and (2) be 
allowed travel expenses, including per diem in lieu of subsistence, in 
, 
the same manner as persons employed intermittently in the Govern-
ment service are allowed expenses under section 5703(b) of title 5, 
United States Code, for each day that they are away from their homes 
or regular places of business in the performance of their duties on the 
Board. 
CAPITALIZATION 
SEC. 104. (a) The capital of the Bank shall consist of capital sub- 12 USC 3014. 
scribed by borrowers from the Bank, by cooperatives eligible to 
become borrowers, by organizations owned and controlled by such bor-
5 USC 5332 
note. 
92 STAT. 504 
PUBLIC LAW 95-3i51—AUG. 20, 1978 
Appropriation 
authorization. 
rowers, by foundations, trust or charitable funds, by public bodies, and 
by the United States. Beginning with the fiscal year ending September 
30, 1979, the United States shall purchase class A stock and for that 
fiscal year there are authorized to be appropriated $100,000,000 for 
such purposes, and there are authorized to be appropriated for the 
next four succeeding fiscal years an amount not to exceed $200,000,000 
in the aggregate. Any amounts so authorized but not appropriated or 
not utilized to purchase such stock of the Bank in any such fiscal year 
is authorized to be appropriated or reappropriated and so used in 
subsequent fiscal years. 
(b) The capital stock of the Bank shall include class A, class B, and 
class C stock and such other classes with such rights, powers, priv-
ileges, and preferences of the separate classes as may be specified, 
not inconsistent with law, in the bylaws of the Bank. Class A pre-
ferred stock held by the United States shall be a preferred stock with 
first preference with respect to assets and dividends over all other 
classes of stock issued by the Bank. So lon^ as any class A stock is 
outstanding, the Bank shall not pay any dividend on any other class 
of stock at a rate greater than the statutory dividend payable on the 
class A stock. Class B and class C stock shall be common stock with 
voting rights as provided for herein and shall be issued only to eligible 
borrowers and organizations controlled by such borrowers or organiza-
tions eligible to borrow, and shall be transferable only on the books 
of the Bank and then only to another eligible borrower. No holder of 
voting stock of the Bank shall be entitled to more than one vote 
regardless of the number of shares of stock of other classes held, except 
as provided in subsection (g) of this section. 
(c) Class A stock with a par value of $100 per share shall be issued 
by the Bank to the Secretary of the Treasury on behalf of the United 
States in exchange for capital furnished pursuant to subsection (a) 
of this section. The holder of class A stock shall be entitled to dividends 
at a rate determined by the Secretary of the Treasury taking into 
consideration the average market yield, during the month preceding 
the close of each fiscal year, on outstanding marketable obligations of 
the United States of comparable maturity: Provided^ That until 
October 1, 1990, such dividends shall not exceed 25 per centum of 
gross revenues for the year less necessary operating expenses, includ-
ing a reserve for possible losses. Such dividends shall be payable 
annually into miscellaneous receipts of the Treasury and shall be 
cumulative. Any such dividend payment may be deferred by the 
Board of Directors with the approval of the Secretary of the Treasury, 
but any dividend payment so deferred shall bear interest at the same 
rate as the rate at w^hich dividends accumulate on the class A stock. 
Without the approval of the Secretary of the Treasury, the Bank 
shall not pay any dividend or distribution on, or make any redemption 
or repurchase of, any other class of stock at any time when the 
cumulative dividends on the class A stock shall not have been paid 
in full (together with any unpaid interest thereon). Upon any liqui-
dation or dissolution of the Bank, the holder of class A stock shall be 
entitled to receive out of the assets of the Bank available for distribu-
tion to its stockholders, prior to any payment to the holders of any 
other class of stock of the Bank, an amount not less than the aggregate 
par value of all class A stock outstanding, plus all accrued and unpaid 
dividends accrued thereon to and including the date of payment 
(together with all unpaid interest thereon). The class A stock shall 
be redeemed and retired as soon as practicable consistent with the 
purposes of this Act (such redemption to be at a price equal to the 
PUBLIC LAW 95-351—AUG. 20, 1978 
92 STAT. SO'S 
par value of the class A stock so redeemed plus cumulative dividends 
accrued thereon to the date of redemption) : Provided^ That begin-
ning on October 1, 1990, there shall be redeemed as a minimum with 
respect to each fiscal year a number of shares of class A stock having 
an aggregate par value equal to the aggregate consideration received 
by the Bank for the issue of its class B and class C stock during that 
fiscal year. Each such redemption shall take place not later than ninety 
days after the close of each fiscal year. 
(d) Class B stock shall be held only by recipients of loans under 
section 105 of this Act, and such borrowers shall be required to own 
class B stock in an amount not less than 1 per centum of the face 
amount of the loan at the time the loan is made. Such borrowers 
may be required by the Bank to own additional class B or class C 
stock at the time the loan is made, but not to exceed an amount equal 
to 10 per centum of the face amount of the loan, or from time to time, 
as the Bank may determine. Such additional stock ownership require-
ments may be on the basis of the face amount of the loan, the out-
standing balances, or on a percentage of interest payable during any 
year or any quarter thereof, as the Bank may determine will provide 
adequate capital for the operation of the Bank and equitable owner-
ship thereof among borrowers. 
(e) Class C stock shall be available for purchase and shall be held 
only by borrowers or by organizations eligible to borrow under section 
105 of this Act or by organizations controlled by such borrowers, and 
shall be entitled to dividends in the manner specified in the bylaws of 
the Bank. Such dividends shall be payable only from income, and, 
until all class A stock has been retired, the rate of such dividends shall 
not exceed the rate of the statutory dividend on class A stock. 
(f) Nonvoting stock of other classifications and other priorities may 
be issued at the discretion of the Board, to other investors, except that 
so long as any class A stock is outstanding, the Board shall not 
authorize or issue any class of stock, whether voting or nonvoting, that 
would rank prior or equal to the class A stock as to dividends or upon 
liquidation or dissolution. 
(g)(1) The bylaws of the Bank may provide for more than one vote 
on the basis of— 
(A) the amount of class B stock, class C stock, or both classes 
N , 
held, with such limitations as will encourage investments in class 
C stock; 
(B) the amount of patronage of the Bank; and 
(C) number of members in the cooperative. 
(2) Such bylaws shall avoid— 
, 
(A) voting control of the Bank from becoming concentrated 
with the larger affluent or smaller less affluent organizations; 
(B) a disproportionately larger vote in one or more of the 
groups of cooperatives referred to in section 103(c) of this Act; 
and 
(C) the concentration of more than 5 per centum of the total 
voting control in any one class B or class C stockholder. 
(h) The Bank may accept nonreturnable capital contributions on 
^ 
which no interest, dividend, or patronage refund shall be payable from 
associations, foundations, or funds or public bodies or agencies at the 
discretion of the Board. For the purpose of accepting such contribu-
tions, the Bank will be a governmental unit within tlie meaning of 
section 170(b) (1) (A) (v) of the Internal Revenue Code of 1954. 
26 USC 170. 
(i) After payment of all operating expenses of the Bank, including 
interest on its obligations, and after setting aside appropriate funds 
92 STAT. 506 
PUBLIC LAW 95-351—AUG. 20, 1978 
for reserves for losses, for cumulative dividends on class A stock and 
dividends on class C stock and for any redemption of class A stock in 
accordance with subsection (c), the Bank shall annually set aside the 
remaining earnings of the Bank for patronage refunds in the form 
of class B or C stock or allocated surplus in accordance with the bylaws 
of the Bank. After ten years from the date of issue of any such stock, or 
at such earlier time as all the Government-held stock is retired, patron-
age refunds may be made in cash, or partly in stock and partly in 
cash. 
ELIGIBILITY 
12 use 3015. 
SEC. 105. (a) For the purpose of all titles of this Act, subject to 
the limitations of subsection (d) of this section, an eligible coopera-
tive is an organization chartered or operated on a cooperative, not-
for-profit basis for producing or furnishing goods, services or facilities, 
primarily for the benefit of its members or voting stockholders who 
are ultimate consumers of such goods, services, or facilities, or a legally 
chartered entity entirely owned and controlled by any such organiza-
tion or organizations, if it— 
(1) makes such goods, services or facilities directly or indirectly 
available to its members or voting stockholders on a not-for-profit 
basis; 
(2) does not pay dividends on voting stock or membership 
capital in excess of such percentage per annum as may be approved 
under the bylaws of the Bank; 
(3) provides that its net savings shall be allocated or dis-
tributed to all members or patrons, in proportion to their patron-
age, or shall be retained for the actual or potential expansion of 
its services or the reduction of its charges to the patrons, or for 
such other purposes as may be authorized by its membership not 
inconsistent with its purposes; 
(4) makes membership available on a voluntary basis, without 
any social, political, racial, or religious discrimination and with-
out any discrimination on the basis of age, sex, or marital status, 
to all persons who can make use of its services and are willing 
to accept the responsibilities of membership, subject only to limi-
tations under applicable Federal or State laws or regulations; 
(5) in the case of primary cooperative organizations restricts 
its voting control to members or voting stockholders on a one 
vote per person basis and takes positive steps to insure economic 
democracy and maximum participation by members of the coop-
erative including the holding of annual meetings and, in the case 
of organizations owned by groups of cooperatives, provides posi-
tive protections to insure economic democracy; and 
(6) is not a credit union, mutual savings bank, or mutual sav-
ings and loan association. 
(b) No organization shall be ineligible because it produces, markets, 
or furnishes goods, services, or facilities on behalf of its members as 
primary producers, unless the dollar volume of loans made by the 
Bank to such organizations exceeds 10 per centum of the gross assets 
of the Bank. 
"Net savings." 
(c) As used in this section, the term "net savings" means, for any 
period, the borrower's gross receipts, less the operating and other 
expenses deductible therefrom in accordance with generally accepted 
accounting principles, including, without limitation, contributions to 
PUBLIC LAW 95-351—AUG. 20, 1978 
92 STAT. 507 
allowable reserves, and after deducting the amounts of any dividends 
on its capital stock or other membership capital payable during, or 
within forty-five days after, the close of such period. 
(d) An eligible cooperative which also has been determined to be 
eligible for credit assistance from the Eural Electrification Admin-
istration, the National Rural Utilities Cooperative Finance Corpora-
tion, the Rural Telephone Bank, the Banks for Cooperatives or other 
institutions of the Farm Credit System, or the Farmers Home Admin-
istration may receive the assistance authorized by this Act only (1) 
if the Bank determines that a request for assistance from any such 
source or sources has been rejected or denied solely because of the 
unavailability of funds from such source or sources, or (2) by agree-
ment between the Bank and the agency or agencies involved. 
(e) Notwithstanding any other provision of this section, a credit 
union serving predominantly low-income members (as defined by the 
Administrator of the National Credit Union Administration) may 
receive technical assistance under title II. 
ANNUAL 
MEETING 
SEC. 106. The Bank shall hold an annual meeting of its stockholders 12 U
S
C 3016. 
which shall be open to the public. At least 30 days' advance notice of 
the time and place of the annual meeting shall be given to all stock-
holders. Borrowers from the Bank shall also give notice of the meeting 
to their members, who shall be entitled to attend. At such meeting the 
Bank shall give a full report of its activities during the year and its 
financial condition and may present proposals for future action and 
other matters of general concern to borrowers and organizations eligi-
ble to borrow from the Bank. Members and representatives of bor-
rowers may present motions or resolutions relating to matters within 
the scope of this Act and may participate in the discussion thereof and 
other matters on the agenda. 
BORROWING AUTHORITY 
SEC. 107. (a) The Bank is authorized to obtain funds through the 12 USC 3017. 
public or private sale of its bonds, debentures, notes, and other evi-
dences of indebtedness. Such obligations shall be issued at such times, 
bear interest at such rates, and contain such terms and conditions as 
the Board shall determine after consultation with the Secretary of 
the Treasury: Prmiided^ however^ That the amount of such obliga-
tions which may be outstanding at any one time pursuant to this 
section shall not exceed ten times the paid-in capital and surplus of 
the Bank. 
(b) The Bank is also authorized, but not required, and only so long 
as any of its class A stock is held by the Secretary of the Treasury, 
to issue its obligations to the Secretary of the Treasury, in amounts 
not to exceed in the aggregate such amounts as are provided in appro-
priations Acts and the Secretary of the Treasury may in his discretion 
purchase any such obligations. Each purchase of obligations of the 
Bank under this subsection shall be upon such terms and conditions 
as to yield a rate of return not less than a rate determined by the 
Secretary of the Treasury, taking into consideration the current aver-
age yield on outstanding marketable obligations of the United States 
\ 
of comparable maturity. The Secretary of the Treasury may sell, 
39-194 O—80—pt. 1 
36 : QL3 
92 STAT. 508 
PUBLIC LAW 95-351—AUG. 20, 1978 
^ 
upon such terms and conditions and at such price or prices as he shall 
determine any of the obligations of the Bank acquired by him under 
/ 
this subsection. 
(c) The Bank may purchase its own obligations, and may provide 
for the sale of any such obligations through a jfiscal agent or agents, 
by negotiation, offer, bid, syndicate sale, or otherwise, and may deliver 
such obligations by book entry, wire transfer, or such other means 
as may be appropriate. 
(d) Obligations issued under this section shall not be guaranteed 
by the United States and shall not constitute a debt or obligation of 
the United States or any agency or instrumentality thereof other than 
the Bank. 
LENDING POWERS 
12 use 3018. 
SEC. 108. (a) The Bank may make loans and commitments for loans 
under this subsection to any organization determined by the Bank to 
be eligible under the provisions of section 105 of this Act, and may 
purchase or discount obligations of members of such organizations if 
the Bank, to the exclusion of all other persons, entities, agencies, or 
jurisdictions, also determines that the applicant has or will have a 
' 
sound organizational and financial structure, income in excess of its 
operating costs and assets in excess of its obligations, and a reason-
able expectation of a continuing demand for its production, goods, 
commodities, or services, or the use of its facilities, so that the loan 
will be fully repayable in accordance with its terms and conditions. 
Commencing on October 1, 1983, the Bank shall not make any loan 
to a cooperative for the purpose of financing the construction, owner-
ship, acquisition, or improvement of any structure used primarily for 
residential purposes if, after giving effect to such loan, the aggregate 
amount of all loans outstanding for such purpose would exceed 30 per 
centum of the gross assets of the Bank. The Board of Directors shall 
use its best efforts to insure that at the end of each fiscal year of the 
Bank at least 35 per centum of its outstanding loans are to— 
(1) cooperatives at least a majority of the members of which 
are low-income persons, and 
(2) other cooperatives, if the proceeds of such loans are directly 
applied to finance a facility, activity, or service that the Board 
finds will be used predominantly by low-income persons. 
Publication in 
The Board shall adopt and publish in the Federal Register rules defin-
Federal Register, 
j^g the term "low-income persons" for purposes of this subsection. The 
criteria to be applied and the factors to be considered by the Bank in 
making loans, loan commitments, purchases, discounts, and guarantees 
shall include an assessment of the impact of the loan on existing small 
businesses in the eligible organizations'business territory. The criteria 
and factors shall be stated in rules of the Bank which shall be pub-
lished and made available to applicants and, upon request, to any other 
person or organization. 
(b) Loans under this section shall be repayable in not more than 
forty years and, except for loans with final due date not longer than 
five years from the date of the loan, shall be amortized as to principal 
and interest. In setting the terms, rates, and charges, it shall be the 
objective of the Bank to provide the type of credit needed by eligible 
borrowers, at the lowest reasonable cost on a sound business basis, tak-
ing into account the cost of money to the Bank, necessary reserve and 
PUBLIC LAW 95-351—AUG. 20, 1978 
92 STAT. 509 
expenses of the Bank, and the technical and other assistance attrib-
utable to loans under this section made available by the Bank, but 
so long as the Bank makes loans from the proceeds of the sale of class 
A stock, the interest rate shall not be less than the rates generally 
prevailing in the area from other sources for loans for similar pur-
poses and maturities, taking into consideration the cost to the borrower 
of required purchase of class B stock in the Bank. The loan terms may 
provide for interest rates to vary from time to time during the repay-
ment period of the loan in accordance with the rates being charged by 
the Bank for new loans at such times. The proceeds of a loan under 
, ' 
j^ 
this subsection may be advanced by the borrower to its members or 
stockholders under circumstances described in the bylaws or rules 
of the Bank. 
(c) Subject to section 102(13), the Bank may guarantee all or any 
part of the principal and interest of any loan made by any State or 
federally chartered lending institution to any borrower if such loan 
is to an organization that would be an eligible borrower from the 
Bank for a direct loan and is on terms and conditions (including the 
rate of interest) which would be permissible terms and conditions for 
such a direct loan. The Bank may impose a charge for any such 
guarantee. No loan may be guaranteed by the Bank if the income 
therefrom to the lender is excluded from such lender's gross income 
for purposes of chapter 1 of the Internal Revenue Code of 1954. 
26 USC 1 et seq. 
(d) Any loan guaranteed under subsection (c) shall be assignable 
to the extent provided in the contract of guarantee as may be deter-
mined by the Bank. The guarantee shall be uncontestable, except for 
fraud or misrepresentation of which the holder had actual knowledge 
at the time he acquired the loan. The Bank in lieu of requiring such 
lender to service such guaranteed loan until final maturity or liquida-
tion, may purchase the loan for the balance of the principal and 
accrued interest thereon without penalty, if it determines that (1) the 
liquidation of the loan would result in the insolvency of the borrower 
or deprive the borrower of assets essential to its continued operation, 
and (2) the loan will be repayable with revision of the loan rates, 
terms, or payment periods or other conditions not inconsistent with 
loans made by the Bank under subsection (a) of this section, which 
revisions the lender or other holder of such guaranteed loan is unwill-
ing to make. 
(e) As long as any of the class A stock of the Bank is held by the 
Secretary of the Treasury, the aggregate amount of commitments by 
the Bank to make or guarantee loans shall not exceed such amounts 
as may be specified in annual appropriation Acts. 
TAXATTON-
SEC. 109. Until the Final Government Equity Redemption Date, 12 USC 3019. 
but not thereafter, the Bank, including its franchise, capital, reserves, 
surplus, mortgages, or other security holdings and income shall be 
exempt from taxation now or hereafter imposed by any State, county, 
municipality, or local taxing authority, but any real property held 
by the Bank shall be subject to any State, county, municipal, or local 
taxation to the same extent according to its value as other real property 
is taxed. 
92 STAT. 510 
PUBLIC LAW 95-351—AUG. 20, 1978 
QUARTERS AND SPACE 
12 use 3020. 
SEC. 110. Until the Final Government Equity Redemption Date, 
space for the principal office and any branch offices of the Bank shall 
be provided by the General Services Administration. Thereafter, the 
Bank may lease, construct, or own quarters and provide for the space 
requirements of its principal and other offices. 
REPORTS TO CONGRESS 
12 use 3021. 
SEC. 111. The Board of the Bank shall report annually to the appro-
priate committees of the Congress on the Bank's capital, operations, 
and financial condition and make recommendations for legislation 
needed to improve its services. 
/ 
AUTHORIZATION 
12 use 3022. 
SEC. 112. In addition to appropriations specifically authorized in 
this Act, there are authorized to be appropriated $2,000,000 for the 
fiscal year ending September 30,1979, and for each of the two succeed-
ing fiscal years, ending September 30, 1980, and September 30, 1981, 
such sums as may be necessary: Provided^ That none of these appro-
priated sums shall be used to retire any indebtedness of the Bank 
'»»s 
incurred pursuant to section 107 of this Act. Any sums so appropriated 
shall remain available until expended. 
APPEALS 
12 use 3023. 
SEC. 113. (a) If an application for assistance under this Act is denied 
in whole or in part, the applicant shall be informed within thirty days 
in writing of the reasons for the denial or restriction. 
(b) Any applicant for assistance under this Act receiving notice of 
denial or restriction of the application may, within thirty days of 
receipt of such notice, request the Board of Directors to review the 
application and notice of denial or restriction for a determination of 
whether the action of the Bank was correctly within the terms of the 
Act, the regulations, and the policy of the Board. The Board shall 
consider the request for review at its next meeting and promptly 
inform the applicant of its determination and the reasons therefor. 
CONFLICT OF INTEREST 
12 use 3024. 
SEC. 114. The Board of Directors shall adopt and publish its own 
conflict of interest rules which shall be no less stringent in effect than 
the Federal Executive conflict of interest rules contained in Executive 
18 use 201 note. Order Numbered 11222 in prohibiting participation or action or 
the use of inside information for personal advantage on any matter 
involving a corporation, trust, partnership, or cooperative organiza-
tion in which a board member, officer, or employee holds a substantial 
financial interest or holds a position as board member or senior officer, 
the activities of which organization might be relevant to, be competi-
tive with, or be inconsistent with the objectives of any bank created 
under this Act. These rules shall require— 
(1) each nominee for elected membership on the Board estab-
lished under this Act to make public and file with the election 
PUBLIC LAW 95-351—AUG. 20, 1978 
92 STAT. 511 
official before the date of election a statement of his financial 
interest and position, if any, in such organizations; and 
(2) each senior executive officer and appointed member of the 
Board to file with the appointing officer, before entering that office 
a statement of his financial interest and position, if any, in such 
organizations, which shall be available for inspection upon 
request. 
The provisions of this section shall remain in effect until the Final 
Government Equity Redemption Date. 
EXAMINATION AND AUDIT 
SEC. 115. Until the stock of the Bank held by the United States has 
been fully retired, the operations of the Bank shall be examined 
annually under the direction of an agency or instrumentality of the 
Fedeial Government designated by the President, including the Gen-
eral Accounting Office, and reports of such examination shall be for-
warded to the Congress. The President shall, no later than the date 
that 66% per centum of the class A stock is held by others than the 
Secretary of the Treasury, establish an Office of Supervision and 
Audit which shall be responsible for audits and examinations of the 
Banlv, shall assure that the objectives of this title are carried out, and 
shall review and comment on the bylaws of the Bank and the general 
policies of the Bank and shall make an annual report to the Congress. 
TITLE II—OFFICE OF SELF-HELP DEVELOPMENT AND 
TECHNICAL ASSISTANCE 
12 use 3025. 
Office of 
Supervision and 
Audit. 
Presidential 
report to 
Congress. 
ESTABLISHMENT 
SEC. 201. (a) There is hereby established within the Bank an Office 12 USC 3041. 
of Self-Help Development and Technical Assistance (hereinafter the 
"Office"). 
(b) The Office shall have a Director who shall be appointed by 
the President, with the advice and consent of the Senate, and who 
shall not be a member of the Board. Subject to review by the Board, 
the Director shall promulgate and publish in the Federal Register 
policies and procedures governing the operation of the Office. 
Publication in 
Federal 
Register. 
AUTHORIZATION 
SEC. 202. There are hereby authorized to be appropriated to the 12 USC 3042. 
Office $10,000,000 for the fiscal year ending September 30, 1979, and 
for the next two succeeding fiscal years an aggregate amount not to 
exceed $65,000,000, for the purpose of making advances under section 
203 of this Act. Any amounts appropriated to the Office shall be 
deposited by the Office in a separate account in the Bank (hereinafter 
the "Account"), and shall remain available until expended. Repay-
ments of capital investment advances made pursuant to section 203(a) 
and interest supplement advances made pursuant to section 203(b) 
and payments of interest thereon pursuant to section 203 (c) shall also 
be deposited in the Account. No other funds of the Bank shall be 
transferred into the Account. The Account shall be used by the Office 
only as authorized in section 203. 
92 STAT. 512 
PUBLIC LAW 95-351—AUG. 20, 1978 
CAPITAL INVESTMENTS AND INTEREST SUPPLEMENTS 
12 use 3043. 
SEC. 203. (a) The Office may make a capital investment advance out 
of the Account to any eligible cooperative, either in conjunction with 
or without a loan if the Office determines that— 
(1) (A) the applicant's initial or supplemental capital require-
ments exceeds its ability to obtain such capital through a loan 
under section 108 or from other sources; or 
(B) the membership of the applicant is, or will consist, sub-
stantially of low-income persons, as defined by the Board of 
Directors, or the applicant proposes to undertake to provide 
specialized goods, services, or facilities to serve their needs; and 
(2) the applicant cannot obtain sufficient funds through a loan 
under section 108 or otherwise, and the applicant presents a plan 
which the Office determines will permit the replacement of a capi-
tal investment advance out of member equities within a period 
not to exceed thirty years. 
(b) The Office may make advances out of the Account to pay all or 
..•s 
part of the interest payable to the Bank or any other lender by an 
eligible cooperative applicant which the Office determines cannot pay 
a market rate of interest because it sells goods or services to, or provides 
facilities for the use of, persons of low income: Provided, That such 
advances will not exceed an amount equal to 4 per centum of the 
principal amount of the indebtedness of such applicant to the Bank 
, 
or such other lender for any year in which the net income of the 
cooperative is insufficient to meet scheduled interest payments. 
(c) Capital investment advances made by the Office pursuant to 
subsection (a) and interest supplement advances made by the Office 
pursuant to subsection (b) shall bear interest at a rate determined 
by the Board of Directors of the Bank, and the Board of Directors 
' i' V 
may authorize an interest rate applicable to such advances lower than 
the rate applicable to loans by the Bank pursuant to section 108. 
ORGANIZATIONAL ASSISTANCE 
12 use 3044. 
SEC. 204. The Office shall make available information and services 
concerning the organization, financing, and management of coopera-
tives to best achieve the objectives of this Act and to best provide the 
means through which various types of goods, services, and facilities 
can be made available to members and patrons. The Office may enter 
into agreements with other agencies of Federal, State, and local 
governments, colleges and universities, foundations, or other organiza-
tions for the development and dissemination of such information, and 
services described in this title. The Office may make or accept grants 
or transfer of funds for such purposes. 
INVESTIGATION AND REVENUES 
12 use 3045. 
SEC. 205. The Office may undertake investigations of new types of 
services which can more effectively be provided through cooperative 
not-for-profit organizations and make surveys of areas where the 
increased use of such organizations will contribute to the economic 
well-being of the community. 
PUBLIC LAW 95-351—AUG. 20, 1978 
92 STAT. 513 
FINANCIAL ANALYSIS AND MARKET SURVEYS 
SEC. 206. The Office may, at the request of any eligible cooperative, 12 U
S
C 3046. 
provide a financial analysis of the applicant's capital structure and 
needs and its cost of operations, survey the market for the goods or 
services the cooperative makes or desires to make available to its 
members or patrons or the users of its facilities. 
DIRECTOR AND MANAGEMENT TRAINING AND ASSISTANCE 
SEC. 207. The Office shall develop and make available, alone or in 12 USC 3047. 
concert with other organizations, a program for training directors and 
staff of eligible cooperatives to improve their understanding of their 
responsibilities; the problems of and solutions for effective and effi-
cient operation of their organizations or of cooperatives in general; 
and may by any means it deems appropriate, conduct membership 
studies, provide membership education programs, and programs for 
informing consumers and the general public of the advantages of 
cooperative action. Management supervision, review, and consulta-
tions shall be available from the Office to any eligible cooperative. 
G O V E R N M E N T ASSISTANCE PROGRAMS 
SEC. 208. The Office shall work closely with all United States Gov- 12 USC 3048. 
ernment agencies offering programs for which consumer cooperatives 
may be eligible to assure that information concerning all such pro-
grams is made available to eligible cooperatives. 
AUTHORIZATION 
SEC. 209. There are authorized to be appropriated to the Office 12 USC 3049. 
$2,000,000 for the fiscal year ending September 30,1979, and for each 
of the two succeeding fiscal years, such sums as may be necessary for 
the administration of this title. Any sums so appropriated shall 
remain available until expended. 
FEES FOR SERVICES 
SEC. 210. The Office may make the technical assistance services under 12 USC 3050. 
this title available for such fees as it may establish, except that such 
services as the Office may determine may be made available without 
charge to eligible cooperatives depending on the nature of the services 
or on ability to pay. Any fees collected shall be accounted for sep-
arately and be available for expenses of the Office. 
TITLE III—GENERAL PROVISIONS 
AMENDMENTS TO EXISTING LAW 
SEC. 301. (a) Section 201 of the Government Corporation Control 
Act (31 U.S.C. 856) is amended by redesignating paragraph (6) the 
second time it appears therein as paragraph (7), by striking out "and" 
immediately before "(9)" and by inserting ", and (10) the National 
Consumer Cooperative Bank" immediately before the period at the 
end thereof. 
92 STAT. 514 
PUBLIC LAW 95-351—AUG. 20, 1978 
(b) Section 302 of the Government Corporation Control Act (31 
:; 
U.S.C. 867) is amended by striking out "or" before "the Federal Land 
Banks" and inserting immediately after "the Federal Land Banks," 
the following: "or the National Consumer Cooperative Bank,". 
(c) The second sentence of subsection (d) of section 303 of the Gov-
ernment Corporation Control Act (31 U.S.C. 868(d)) is amended by 
inserting "National Consumer Cooperative Bank," immediately before 
"Rural Telephone Bank". 
SEC. 302. Section 5315 of title 5, United States Code, is amended by 
.:; 
adding at the end thereof the following: 
"(122^ President, National Consumer Cooperative Bank. 
"(123) Director, Office of Self-Help Development and Techni-
cal Assistance, National Consumer Cooperative Bank.". 
Approved August 20, 1978. 
SMi 
LEGISLATIVE HISTORY: 
HOUSE REPORTS: No. 95-311 (Comm. on Banking, Finance, and Urban Affairs) and 
No. 95-1399 (Comm. of Conference). 
SENATE REPORT No. 95-795 (Comm. on Banking, Housing, and Urban Affairs). 
CONGRESSIONAL RECORD: 
Vol. 123 (1977): July 13, 14, considered and passed House. 
Vol. 124 (1978): July 13, considered and passed Senate, amended. 
July 24, 25, In\the! House: \objection, to |request for j unanimous 
consent to Senate| amendment; conference requested. 
July 27, Senate agreed to conference report. 
Aug. 9, House agreed to conference report.