§ 2001. — Congressional declaration of policy and objectives.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC2001]
TITLE 12--BANKS AND BANKING
CHAPTER 23--FARM CREDIT SYSTEM
Sec. 2001. Congressional declaration of policy and objectives
(a) It is declared to be the policy of the Congress, recognizing
that a prosperous, productive agriculture is essential to a free nation
and recognizing the growing need for credit in rural areas, that the
farmer-owned cooperative Farm Credit System be designed to accomplish
the objective of improving the income and well-being of American farmers
and ranchers by furnishing sound, adequate, and constructive credit and
closely related services to them, their cooperatives, and to selected
farm-related businesses necessary for efficient farm operations.
(b) It is the objective of this chapter to continue to encourage
farmer- and rancher-borrowers participation in the management, control,
and ownership of a permanent system of credit for agriculture which will
be responsive to the credit needs of all types of agricultural producers
having a basis for credit, and to modernize and improve the
authorizations and means for furnishing such credit and credit for
housing in rural areas made available through the institutions
constituting the Farm Credit System as herein provided.
(c) It is declared to be the policy of Congress that the credit
needs of farmers, ranchers, and their cooperatives are best served if
the institutions of the Farm Credit System provide equitable and
competitive interest rates to eligible borrowers, taking into
consideration the creditworthiness and access to alternative sources of
credit for borrowers, the cost of funds, including any costs of
defeasance under section 2159(b) of this title, the operating costs of
the institution, including the costs of any loan loss amortization under
section 2254(b) of this title, the cost of servicing loans, the need to
retain earnings to protect borrowers' stock, and the volume of net new
borrowing. Further, it is declared to be the policy of Congress that
Farm Credit System institutions take action in accordance with the Farm
Credit Act Amendments of 1986 in such manner that borrowers from the
institutions derive the greatest benefit practicable from that Act:
Provided, That in no case is any borrower to be charged a rate of
interest that is below competitive market rates for similar loans made
by private lenders to borrowers of equivalent creditworthiness and
access to alternative credit.
(Pub. L. 92-181, Sec. 1.1, Dec. 10, 1971, 85 Stat. 583; Pub. L. 99-509,
title I, Sec. 1032, Oct. 21, 1986, 100 Stat. 1877.)
References in Text
The Farm Credit Act Amendments of 1986, referred to in subsec. (c),
is subtitle D of Pub. L. 99-509, title I, Secs. 1031-1037, Oct. 21,
1986, 100 Stat. 1877, which amended sections 2001, 2015, 2075, 2131,
2159, 2205, 2252, and 2254 of this title and enacted provisions set out
as a note below. For complete classification of this Act to the Code,
see Short Title of 1986 Amendment note below and Tables.
Amendments
1986--Subsec. (c). Pub. L. 99-509 added subsec. (c).
Effective Date of 1985 Amendment
Pub. L. 99-205, title IV, Sec. 401, Dec. 23, 1985, 99 Stat. 1709,
provided that: ``The provisions of titles I, II, III, and VI of this Act
[enacting sections 2152, 2161, 2199, 2200, 2216 to 2216k, 2219, 2219a,
2253, 2261 to 2273 of this title and provisions set out as notes under
section 2001 of this title, amending sections 2002, 2012, 2013, 2031,
2033, 2034, 2051, 2052, 2054, 2072 to 2074, 2077, 2078, 2091, 2093 to
2096, 2098, 2122 to 2126, 2132 to 2134, 2151, 2153 to 2156, 2182, 2183,
2201, 2202, 2205, 2206, 2211 to 2213, 2221 to 2223, 2227, 2241 to 2246,
2248 to 2252, and 2254 of this title, and repealing sections 2152, 2247,
and 2253 of this title] shall become effective thirty days after
enactment [Dec. 23, 1985].''
Short Title of 1996 Amendment
Pub. L. 104-105, Sec. 1(a), Feb. 10, 1996, 110 Stat. 162, provided
that: ``This Act [enacting sections 2214a, 2219e, 2277a-10a, 2277a-10b,
2279bb-7, and 2279cc of this title, amending sections 2013, 2018, 2020,
2129, 2154a, 2199, 2202a, 2252, 2254, 2277a, 2277a-2, 2277a-4, 2277a-5,
2277a-7, 2277a-8, 2277a-10, 2279aa, 2279aa-1, 2279aa-3, 2279aa-5,
2279aa-6, 2279aa-8, 2279aa-9, 2279aa-11 to 2279aa-13, 2279bb-1 to
2279bb-4 of this title, sections 5314 and 5315 of Title 5, Government
Organization and Employees, and section 1999 of Title 7, Agriculture,
repealing section 2279aa-7 of this title, and enacting provisions set
out as notes under this section and sections 2013 and 2252 of this
title] may be cited as the `Farm Credit System Reform Act of 1996'.''
Short Title of 1994 Amendment
Pub. L. 103-376, Sec. 1, Oct. 19, 1994, 108 Stat. 3497, provided
that: ``This Act [enacting section 2206a of this title and amending
sections 2122, 2128, and 2129 of this title] may be cited as the `Farm
Credit System Agricultural Export and Risk Management Act'.''
Short Title of 1992 Amendment
Pub. L. 102-552, Sec. 1(a), Oct. 28, 1992, 106 Stat. 4102, provided
that: ``This Act [see Tables for classification] may be cited as the
`Farm Credit Banks and Associations Safety and Soundness Act of 1992'.''
Short Title of 1988 Amendments
Pub. L. 100-399, Sec. 1, Aug. 17, 1988, 102 Stat. 989, provided
that: ``This Act [see Tables for classification] may be cited as the
`Agricultural Credit Technical Corrections Act of 1988'.''
Pub. L. 100-233, Sec. 1(a), Jan. 6, 1988, 101 Stat. 1568, provided
that: ``This Act [see Tables for classification] may be cited as the
`Agricultural Credit Act of 1987'.''
Short Title of 1986 Amendment
Section 1031 of title I of Pub. L. 99-509 provided that: ``This
subtitle [subtitle D (Secs. 1031-1037) of title I of Pub. L. 99-509,
amending sections 2001, 2015, 2075, 2131, 2159, 2205, 2252, and 2254 of
this title] may be cited as the `Farm Credit Act Amendments of 1986'.''
Short Title of 1985 Amendment
Pub. L. 99-205, Sec. 1, Dec. 23, 1985, 99 Stat. 1678, provided:
``That this Act [enacting sections 2152, 2161, 2199, 2200, 2216 to
2216k, 2219, 2219a, 2253, 2261 to 2273 of this title and provisions set
out as notes under this section and section 2241 of this title, amending
sections 2002, 2012, 2013, 2031, 2033, 2034, 2051, 2052, 2054, 2072 to
2074, 2077, 2078, 2091, 2093 to 2096, 2098, 2122 to 2126, 2132 to 2134,
2151, 2153 to 2156, 2182, 2183, 2201, 2202, 2205, 2206, 2211 to 2213,
2221 to 2223, 2227, 2241 to 2246, 2248 to 2252, and 2254 of this title,
and repealing sections 2152, 2247, and 2253 of this title] may be cited
as the `Farm Credit Amendments Act of 1985'.''
Short Title of 1980 Amendment
Pub. L. 96-592, Sec. 1, Dec. 24, 1980, 94 Stat. 3437, provided:
``That this Act [enacting sections 2205 to 2208, 2211 to 2214, 2218, and
2260 of this title and amending sections 1141b, 2012 to 2020, 2033,
2034, 2051 to 2054, 2072 to 2077, 2091, 2093, 2094, 2096, 2097, 2122,
2124, 2126, 2128 to 2132, 2156, 2181, 2221, 2223, 2242, 2244, 2249,
2251, and 2252 of this title and section 3802 of Title 7, Agriculture]
may be cited as the `Farm Credit Act Amendments of 1980'.''
Short Title
Section 1 of Pub. L. 92-181 provided: ``That this Act [enacting this
chapter and provisions set out as notes under this section, amending
sections 5314 and 5315 of Title 5, Government Organization and
Employees, and section 393 of this title, and repealing section 636 et
seq. of this title] may be cited as the `Farm Credit Act of 1971'.''
Regulations
Pub. L. 104-105, title III, Sec. 301, Feb. 10, 1996, 110 Stat. 185,
provided that: ``The Secretary of Agriculture and the Farm Credit
Administration shall promulgate regulations and take other required
actions to implement the provisions of this Act [see Short Title of 1996
Amendment note above] not later than 90 days after the effective date of
this Act [Feb. 10, 1996].''
Pub. L. 100-233, title IX, Sec. 901, Jan. 6, 1988, 101 Stat. 1717,
as amended by Pub. L. 100-399, title VIII, Sec. 801, Aug. 17, 1988, 102
Stat. 1006, provided that:
``(a) Issuance of Regulations.--
``(1) Authority.--The Farm Credit Administration Board shall
issue such regulations as the Board considers necessary for the
orderly and efficient implementation of the provisions of, and the
amendments made by, this Act [see Tables for classification]
relating to the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.).
``(2) Timing.--To the extent the Farm Credit Administration is
required to issue regulations to implement this Act and the
amendments made by this Act, the Farm Credit Administration shall
issue such regulations as expeditiously as possible, and, except as
otherwise provided in this Act, not later than 180 days after the
date of the enactment of this Act [Jan. 6, 1988].
``(b) Temporary Retention of Certain Regulations.--
``(1) In general.--Except as otherwise provided in this
subsection, the regulations issued by the Farm Credit Administration
before the date of the enactment of this Act [Jan. 6, 1988] under
provisions amended by this Act shall remain in effect,
notwithstanding such amendments, until the Farm Credit
Administration issues regulations to implement such amendments, but
in no event later than 180 days after such date of enactment.
``(2) Certain regulations relating to borrowers' rights.--The
regulations implementing, interpreting, or applying part C of title
IV (12 U.S.C. 2201 et seq.) [12 U.S.C. 2199 et seq.] (other than
section 4.13(a) [12 U.S.C. 2199(a)]) (in effect immediately before
the date of the enactment of this Act), to the extent that such
regulations are not contrary to this Act and the amendments made by
this Act, shall remain in effect until January 1, 1989.
``(3) Regulations relating to disclosure by banks and
associations.--Any regulation issued or approved by the Farm Credit
Administration that implements, interprets, or applies section
4.13(a) (12 U.S.C. 2201(a) [12 U.S.C. 2199(a)]) (in effect
immediately before the date of the enactment of this Act) shall
remain in effect for 120 days after such date of enactment.''
Repeals
Pub. L. 92-181, which enacted this chapter, represents a complete
rewriting of the farm credit laws and a fundamental reworking of the
statutory basis for the farm credit system. In connection with such
reworking of material, the existing statutory provisions covering this
area were repealed and their substance revised, reenacted, and expanded
by Pub. L. 92-181.
The repealed provisions constituted the bulk of chapter 7 of this
title. Section 5.40(a), formerly 5.26(a), of Pub. L. 92-181, as
renumbered by Pub. L. 99-205, title II, Sec. 205(a)(2), Dec. 23, 1985,
99 Stat. 1703, enumerated the repealed statutes as follows: The Federal
Farm Loan Act, as amended; section 2 of the Act of March 10, 1924
(Public Numbered 35, Sixty-eighth Congress, 43 Stat. 17), as amended;
section 6 of the Act of January 23, 1932 (Public Numbered 3, Seventy-
second Congress, 47 Stat. 14), as amended; the Farm Credit Act of 1933,
as amended; sections 29 and 40 of the Emergency Farm Mortgage Act of
1933; Act of June 18, 1934 (Public Numbered 381, Seventy-third Congress,
48 Stat. 983); Act of June 4, 1936 (Public Numbered 644, Seventy-fourth
Congress, 49 Stat. 1461), as amended; sections 5, 6, 20, 25(b) and 39 of
the Farm Credit Act of 1937, as amended; sections 601 and 602 of the Act
of September 21, 1944 (Public Law 425, Seventy-eighth Congress, 58 Stat.
740, 741), as amended; sections 1, 2, 3, 4, 5, 6, 7, 8, 16, and 17(b) of
the Farm Credit Act of 1953, as amended; sections 2, 101, and 201(b) of
the Farm Credit Act of 1956.
Savings Provision
Section 5.40(b), formerly Sec. 5.26(b), of Pub. L. 92-181, as
renumbered by Pub. L. 99-205, title II, Sec. 205(a)(2), Dec. 23, 1985,
99 Stat. 1703, provided that: ``All regulations of the Farm Credit
Administration or the institutions of the System and all charters,
bylaws, resolutions, stock classifications, and policy directives issued
or approved by the Farm Credit Administration, and all elections held
and appointments made under the Acts repealed by subsection (a) of this
section [see Repeals note above] shall be continuing and remain valid
until superseded, modified, or replaced under the authority of this Act
[this chapter]. All stock, notes, bonds, debentures, and other
obligations issued under the repealed acts shall be valid and
enforceable upon the terms and conditions under which they were issued,
including the pledge of collateral against which they were issued, and
all loans made and security or collateral therefor held by, and all
contracts entered into by, institutions of the System shall remain
enforceable according to their terms unless and until modified in
accordance with the provisions of this Act; it being the purpose of this
subsection to avoid disruption in the effective operation of the System
by reason of said repeals.''
Separability
Section 5.42, formerly Sec. 5.28, of Pub. L. 92-181, as renumbered
by Pub. L. 99-205, title II, Sec. 205(a)(2), Dec. 23, 1985, 99 Stat.
1703, provided that: ``If any provision of this Act [this chapter], or
the application thereof to any persons or in any circumstances, is held
invalid, the remainder of this Act and the application of such provision
to other persons or in other circumstances shall not be affected
thereby.''
References to Earlier Farm Credit Acts
Section 5.40(a), formerly Sec. 5.26(a), of Pub. L. 92-181, as
renumbered by Pub. L. 99-205, title II, Sec. 205(a)(2), Dec. 23, 1985,
99 Stat. 1703, provided in part that: ``All references in other
legislation, State or Federal, rules and regulations of any agency,
stock, contracts, deeds, security instruments, bonds, debentures, notes,
mortgages and other documents of the institutions of the System, to the
Acts repealed hereby [see Repeals note above], shall be deemed to refer
to comparable provisions of this Act [this chapter].''
Reservation of Right To Amend or Repeal
Section 5.43, formerly Sec. 5.29, of Pub. L. 92-181, as renumbered
by Pub. L. 99-205, title II, Sec. 205(a)(2), Dec. 23, 1985, 99 Stat.
1703, provided that: ``The right to alter, amend, or repeal any
provision or all of this Act [this chapter] is expressly reserved.''
Study on Demand for and Availability of Credit in Rural Areas for
Agriculture, Housing, and Rural Development
Pub. L. 104-127, title VI, Sec. 650, Apr. 4, 1996, 110 Stat. 1105,
provided that:
``(a) In General.--The Secretary of Agriculture shall conduct a
study and report to the Committee on Agriculture of the House of
Representatives and the Committee on Agriculture, Nutrition, and
Forestry of the Senate on the demand for and availability of credit in
rural areas for agriculture, housing, and rural development.
``(b) Purpose.--The purpose of the study shall be to ensure that
Congress has current and comprehensive information to consider as
Congress deliberates on rural credit needs and the availability of
credit to satisfy the needs of rural areas of the United States.
``(c) Items in Study.--In conducting the study, the Secretary shall
base the study on the most current available data and analyze--
``(1) rural demand for credit from the Farm Credit System, the
ability of the Farm Credit System to meet the demand, and the extent
to which the Farm Credit System provides loans to satisfy the
demand;
``(2) rural demand for credit from the United States banking
system, the ability of banks to meet the demand, and the extent to
which banks provide loans to satisfy the demand;
``(3) rural demand for credit from the Secretary, the ability of
the Secretary to meet the demand, and the extent to which the
Secretary provides loans to satisfy the demand;
``(4) rural demand for credit from other Federal agencies, the
ability of the agencies to meet the demand, and the extent to which
the agencies provide loans to satisfy the demand;
``(5) what measure or measures exist to gauge the overall demand
for rural credit, the extent to which rural demand for credit is
satisfied, and what the measures have demonstrated;
``(6) a comparison of the interest rates and terms charged by
the Farm Credit System Farm Credit Banks, production credit
associations, and banks for cooperatives with the rates and terms
charged by the banks of the United States for credit of comparable
risk and maturity;
``(7) the advantages and disadvantages of the modernization and
expansion proposals of the Farm Credit System on the Farm Credit
System, the United States banking system, rural users of credit,
local rural communities, and the Federal Government, including--
``(A) any added risk to the safety and soundness of the Farm
Credit System that may result from approval of a proposal; and
``(B) any positive or adverse impacts on competition between
the Farm Credit System and the banks of the United States in
providing credit to rural users;
``(8) the nature and extent of the unsatisfied rural credit need
that the Farm Credit System proposals are supposed to address and
what aspects of the present Farm Credit System prevent the Farm
Credit System from meeting the need;
``(9) the advantages and disadvantages of the proposal by
commercial bankers to allow banks access to the Farm Credit System
as a funding source on the Farm Credit System, the United States
banking system, rural users of credit, local rural communities, and
the Federal Government, including--
``(A) any added risk to the safety and soundness of the Farm
Credit System that may result from approval of the proposal; and
``(B) any positive or adverse impacts on competition between
the Farm Credit System and the banks of the United States in
providing credit to rural users; and
``(10) problems that commercial banks have in obtaining capital
for lending in rural areas, how access to Farm Credit System funds
would improve the availability of capital in rural areas in ways
that cannot be achieved in the system in existence on the date of
enactment of this Act [Apr. 4, 1996], and the possible effects on
the viability of the Farm Credit System of granting banks access to
Farm Credit System funds.
``(d) Interagency Task Force.--In completing the study, the
Secretary shall use, among other things, data and information obtained
by the interagency task force on rural credit.''
GAO Study of Rural Credit Cost and Availability
Pub. L. 101-624, title XVIII, Sec. 1842, Nov. 28, 1990, 104 Stat.
3835, directed Comptroller General of the United States to conduct a
study relating to cost and availability of credit in rural America and,
not later than 2 years after Nov. 28, 1990, submit a report to Committee
on Agriculture of House of Representatives and Committee on Agriculture,
Nutrition, and Forestry of Senate.
Authorization of Appropriations for National Commission on Agricultural
Finance and National Commission on Agriculture and Rural Development
Policy
Pub. L. 100-71, title V, Sec. 519(b), July 11, 1987, 101 Stat. 475,
authorized and appropriated (1) for National Commission on Agricultural
Finance established under section 501 of Pub. L. 99-205, $100,000, to
remain available until expended, and (2) for National Commission on
Agriculture and Rural Development [Policy] established under section
5002 of this title, $100,000, to remain available until expended.
Loan Review by Local Lending Institutions
Pub. L. 99-205, title III, Sec. 307, Dec. 23, 1985, 99 Stat. 1709,
required each local lending institution of Farm Credit System
established under this chapter to (1) review each loan that had been
placed in non-accrual status by such institution to determine whether
such loan could be restructured based on changes in circumstances of
such institution as the result of this Act and the amendments made by
this Act, and (2) notify in writing borrower of each such loan of
provisions of this section.
National Commission on Agricultural Finance
Pub. L. 99-205, title V, Sec. 501, Dec. 23, 1985, 99 Stat. 1710,
directed President to appoint a National Commission on Agricultural
Finance, comprised of 15 members, representing the financial community,
the agricultural sector, and government, to conduct a study of methods
to ensure availability of adequate credit to agricultural producers and
agribusiness, taking into account long-term financing needs of
agricultural economy, roles of commercial banks, Farm Credit System, and
Farmers Home Administration in meeting those financial needs, with the
Commission, in conducting such study, to (1) evaluate financial
circumstances relative to both lenders and borrowers of farm credit, (2)
evaluate structure, performance, and conduct of private lenders--
commercial bankers and Farm Credit System--and public lenders, (3)
explore need for long-term assistance in stabilizing value of
agricultural assets, and (4) evaluate effect on suppliers, producers,
processors, and local communities when financial institutions fail, and
not later than Dec. 23, 1986, to submit to Congress a report containing
results of study, together with comments and recommendations for
legislation providing for a sound, reasonable, and primarily self-
supporting credit program for farmers and ranchers as Commission
considers appropriate.
