§2278a–4. Certification of eligibility to issue preferred stock

(a) Book value less than par value of stock and equities

If the book value of the stock, participation certificates, and other similar equities of a System institution, based on generally accepted accounting principles, is less than the par value of the stock or the face value of the certificates or equities-

(1) the Farm Credit Administration shall notify the Assistance Board of such impairment;

(2) the Assistance Board shall monitor the financial condition, business plans, and operations of the institution; and

(3) the institution may request the Assistance Board to grant certification to issue preferred stock under section 2278b–7(a) of this title.

(b) Book value less than 75 percent of par value of stock and equities

If the book value of the stock, participation certificates, and other similar equities of a System institution, based on generally accepted accounting principles, is less than 75 percent of the par value of the stock or the face value of the certificates or equities, the institution shall request the Assistance Board to grant certification to issue preferred stock under section 2278b–7(a) of this title.

(c) Mandatory determination of eligibility

(1) In general

The Assistance Board shall determine whether to certify a System institution as eligible to issue preferred stock under section 2278b–7 of this title, if-

(A) the institution requests such certification;

(B) the book value of the stock, participation certificates, and other similar equities of the institution, based on generally accepted accounting principles, has declined to 75 percent of the par value of the stock or the face value of the certificates or equities; and

(C) the institution agrees to meet the terms and conditions specified by the Assistance Board pursuant to section 2278a–6 of this title.

(2) Effective date of certification

If the determination of the Assistance Board is to certify the institution under paragraph (1), such certification shall be effective at the time of such determination.

(d) Implementation

As soon as practicable after January 6, 1988, the Assistance Board shall take such actions as are necessary to carry out this section.

(e) "Other similar equities" defined

Except where otherwise provided in this chapter, the term "other similar equities" includes allocated equities.

(Pub. L. 92–181, title VI, §6.4, as added Pub. L. 100–233, title II, §201, Jan. 6, 1988, 101 Stat. 1588 ; amended Pub. L. 100–399, title II, §201(c), Aug. 17, 1988, 102 Stat. 991 .)

Amendments

1988-Subsecs. (c) to (e). Pub. L. 100–399 redesignated second subsec. (c) and subsec. (d) as (d) and (e), respectively.

Effective Date of 1988 Amendment

Amendment by Pub. L. 100–399 effective as if enacted immediately after enactment of Pub. L. 100–233, which was approved Jan. 6, 1988, see section 1001(a) of Pub. L. 100–399, set out as a note under section 2002 of this title.