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§ 1402. —  Limitations on loans; financial structure of corporation, approval.



[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
  January 24, 2002 and December 19, 2002]
[CITE: 12USC1402]

 
                       TITLE 12--BANKS AND BANKING
 
   CHAPTER 10--LOCAL AGRICULTURAL-CREDIT CORPORATIONS, LIVESTOCK-LOAN 
    COMPANIES AND LIKE ORGANIZATIONS; LOANS TO INDIVIDUALS TO AID IN 
                 FORMATION OR TO INCREASE CAPITAL STOCK
 
Sec. 1402. Limitations on loans; financial structure of 
        corporation, approval
        

(a) Limitation on loans to individual stockholders

    No loans shall be made to individual stockholders on the capital 
stock of, or to create or increase the capital stock of such 
corporation, company, or organization in an amount in excess of 75 per 
centum of the par value of the capital stock of such corporation, 
company, or organization owned by or proposed to be subscribed to by 
such individual.

(b) Approval of financial structure of corporation by Governor of Farm 
        Credit Administration

    No loan shall be made upon the capital stock of any corporation 
until the Governor of the Farm Credit Administration shall find that the 
financial structure of such corporation is sound and unimpaired and by 
him approved, nor shall any loan be made upon the capital stock of such 
corporation until the management of such company shall be made known to 
and approved by the Governor, and the Governor shall have the right at 
any time to declare the indebtedness to the Government that may be 
created hereunder due whenever in his judgment the financial structure 
of the corporation shall become so impaired or the management become so 
unsatisfactory as to jeopardize the interests of the Government.

(Mar. 3, 1932, ch. 70, Sec. 2, 47 Stat. 60; Ex. Ord. No. 6084, Mar. 27, 
1933.)

                          Transfer of Functions

    Establishment of Farm Credit Administration as an independent 
agency, composition of Farm Credit Administration, appointment of 
Governor of Farm Credit Administration, and duties thereof, including 
duty to perform functions, etc., of Farm Credit Administration, see 
section 2241 et seq. of this title.
    ``Governor of the Farm Credit Administration'' and ``Governor'' 
substituted for ``Secretary of Agriculture'' and ``Secretary'', 
respectively, and other changes were effected by Ex. Ord. No. 6084, 
which is set out preceding section 2241 of this title.



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