An Act to amend further the Federal Farm LoAn Act and the Farm Credit Act of 1933, as amended, and for other purposes.
PL 87-343 (S.1927), enacted 10/03/1961

758 
PUBLIC LAW 87-343-OCT. 3, 1961 
[75 ST A T , 
October 3, 1961 
[S. 1927] 
Public Law 87-343 
AN ACT 
To amend further the Federal Farm Loan Act and the Farm Credit Act of 1933, 
as amended, and for other purposes. 
F e d e r a l Farm 
Loan Act, amend-
ment. 
39 Stat. 370. 
R e s t r i ction on 
loans. 
Farm Credit Act 
of 1933, 
a m e n d -
ment. 
Revolving fund. 
69 Stat. 663. 
A p p 1 i c ation of 
earnings. 
Earnings and re-
serves. 
69 Stat. 658. 
Be it eiuwteci hy the Senate and House of Representatives 
of the 
United States of Ainerica in Congress assembled^ That (a) section 12 
of the Federal Farm Loan Act, as amended (12 U.S.C. 771), is 
amended— 
(1) by substituting "a fixed number of one or more installments 
each year" for "a fixed number of annual or semiannual install-
ments" in paragraph "Second" thereof; and 
(2) by substituting in the fourth sentence of paragraph 
"Sixth" thereof the following for all that comes after "but no 
such loan shall be made to a corporation": "unless the principal 
part of its income is derived from farming operations and unless 
owners of stock in the corporation assume personal liability for 
the loan to the extent required under rules and regulations pre-
scribed by the Farm Credit Administration.". 
(b) Section 202(c) of the Federal Farm Loan Act, as amended (12 
U.S.C., supp. II, sec. 1033), is amended by changing the word "five" 
to the word "seven". 
SEC. 2. The Farm Credit Act of 1933, as amended, is amended— 
(1) by adding the following subsection to section 5 thereof (12 
US.C. 1131i): 
"(f) The revolving funds created by subsections (a) and (e) of this 
section are hereby combined into a single revolving fund which shall 
be available for all purposes for which both such funds were heretofore 
available, and reference in any provision of law to the revolving fund 
created by said subsection (a) or said subsection (e) shall be deemed 
a reference to the single revolving fund created by this subsection."; 
(2) by changing section 22(a) thereof (12 U.S.C. 1131f (a)) to 
read: 
" (a) Each production credit association shall, at the end of each fiscal 
year, apply the amount of its earnings for such year in excess of 
operating expenses (including provision for valuation reserves against 
loan assets in an amount equal to one-half of 1 per centum of loans 
outstanding at the end of the fiscal year, to the extent that earnings for 
the year in excess of other operating expenses permit, until such 
reserves equal or exceed 3% per centum of loans outstanding at the 
end of the fiscal year beyond which 3% per centum further additions 
to such reserves are not required but may be made), first, to the restora-
tion of the impairment, if any, of capital; and, second, to the establish-
ment and maintenance of a surplus account, the minimum amount of 
which shall be prescribed by the Federal intermediate credit bank."; 
and 
(3) by adding the following subsection to section 36 thereof (12 
U.,S.C. 11341) : 
"(d) Notwithstanding any other provision of this Act, in the case 
of liquidation or dissolution of any present or former borrower from a 
bank for cooperatives, the bank, may, in accordance with rules and 
regulations prescribed by the Farm Credit Administration, retire and 
cancel any capital stock or allocated surplus and contingency reserves 
or other equity interest, in the bank owned by such borrower at the 
fair book value thereof, not exceeding par, and, to the extent required, 
corresponding shares and allocations or other equity interests held by 
the regional bank in the central bank shall be retired.". 
Approved October 3, 1961.