§2124. Stock of banks for cooperatives

(a) Amount

The Capital stock of each bank for cooperatives shall be in such amount as its board determines is required for the purpose of providing adequate capital to permit the bank to meet the credit needs of borrowers from the bank and such amounts may be increased or decreased from time to time in accordance with such needs.

(b) Value

The capital stock of each bank shall be divided into shares of par value of $100 each and may be of such classes as the board may determine. Such stock may be issued in fractional shares.

(c) Eligible holders of voting stock

Voting stock may be issued or transferred to and held only by (i) cooperative associations eligible to borrow from the banks and (ii) other banks for cooperatives, and shall not be otherwise transferred, pledged, or hypothecated except as consented to by the issuing bank under regulations of the Farm Credit Administration.

(d) Entitlement to vote

Each holder of one or more shares of voting stock which is eligible to borrow from a bank for cooperatives shall be entitled only to one vote and only in the affairs of the bank in the district in which its principal office is located unless otherwise authorized under regulations issued by the Farm Credit Administration, except that if such holder has not been a borrower from the bank in which it holds such stock within a period of two years next preceding the date fixed by the Farm Credit Administration prior to the commencement of voting, it shall not be entitled to vote.

(e) Nonvoting investment stock

Nonvoting investment stock may be issued in such series and in such amounts as may be determined by the board and may be exchanged for voting stock or sold or transferred to any person subject to the approval of the issuing bank.

(f) Participation certificates

Participation certificates may be issued to parties to whom voting stock may not be issued.

( Pub. L. 92–181, title III, §3.3, Dec. 10, 1971, 85 Stat. 603 ; Pub. L. 96–592, title III, §302, Dec. 24, 1980, 94 Stat. 3443 ; Pub. L. 99–205, title II, §205(e)(3), (4), Dec. 23, 1985, 99 Stat. 1705 ; Pub. L. 100–233, title VIII, §§802(o), 805(k), Jan. 6, 1988, 101 Stat. 1712 , 1715.)

Amendments

1988-Subsec. (a). Pub. L. 100–233, §802(o)(1), struck out ", with the approval of Farm Credit Administration," after "board determines".

Subsec. (b). Pub. L. 100–233, §802(o)(2), struck out "with the approval of the Farm Credit Administration" after "board may determine".

Subsec. (d). Pub. L. 100–233, §805(k), substituted "by" for "by by" after "regulations issued".

Subsec. (e). Pub. L. 100–233, §802(o)(3), struck out "and approved by the Farm Credit Administration" after "Board".

1985-Subsec. (d). Pub. L. 99–205, §205(e)(3), inserted "under regulations issued by" after "authorized".

Subsec. (e). Pub. L. 99–205, §205(e)(4), struck out ", except for stock held by the Governor," before "may be exchanged".

1980-Subsec. (f). Pub. L. 96–592 added subsec. (f).

Effective Date of 1985 Amendment

Amendment by Pub. L. 99–205 effective thirty days after Dec. 23, 1985, see section 401 of Pub. L. 99–205, set out as a note under section 2001 of this title.

Section Referred to in Other Sections

This section is referred to in section 2142 of this title.