§ 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.