12 U.S.C. § 2015 — Lending authority

(a) Real-estate loans and related assistance. (1) Real-estate loans. The Farm Credit Banks may make long-term real-estate mortgage loans in “rural areas,” or participate with other lenders in making those loans. The Farm Credit Administration defines “rural areas”; this section does not define that term. The Banks may also make these loans to producers or harvesters of aquatic products. Under specified circumstances, they may make continuing commitments to make these loans. The term of each loan must be at least 5 years and no more than 40 years. (2) Financial assistance. The Farm Credit Banks may provide and extend financial assistance to a Federal land bank association. They may discount for, or purchase from, the association any note, draft, or other obligation that the association endorses or guarantees. The proceeds of that note, draft, or other obligation must have been advanced to persons eligible for financing by the association and for purposes eligible for financing by the association, as authorized under section 2279b(a) of this title. (b) Intermediate credit. (1) In general. The Farm Credit Banks may make loans and extend other similar financial assistance to, and discount for or purchase from—(A) any production credit association; or (B) any national bank, State bank, trust company, agricultural credit corporation, incorporated livestock loan company, savings institution, credit union, or association of agricultural producers that makes loans to farmers and ranchers. They may also provide these services to any corporation that makes loans to producers or harvesters of aquatic products. For each note, draft, or other obligation, the institution must endorse or guarantee it. The proceeds of the note, draft, or other obligation must have been advanced to persons and for purposes eligible for financing by production credit associations under this chapter. (2) Participation with other entities. The Farm Credit Banks may participate with one or more production credit associations or other Farm Credit Banks in making loans to eligible borrowers. They may also participate with one or more other Farm Credit System institutions in loans made under this subchapter or other subchapters of this chapter, on the basis prescribed in section 2206 of this title. (3) Limitations on extension of financial services. (A) General rule. A Farm Credit Bank may not purchase paper from or discount paper for an institution listed in paragraph (1)(B) of this subsection. It also may not make loans or extend other similar financial assistance to that institution if adding that paper to the institution’s aggregate liabilities would cause those liabilities to exceed the lesser of two amounts: ten times the institution’s paid-in and unimpaired capital and surplus, or the amount of liabilities allowed under the laws of the jurisdiction that created the institution. This rule applies to direct and contingent liabilities, but not to bona fide deposit liabilities. (B) Limitation on national bank. A national bank that owes money to a Farm Credit Bank on paper discounted or purchased under paragraph (1) may not incur additional indebtedness if that additional indebtedness would cause the national bank’s aggregate direct or contingent liabilities to exceed the limitation described in subparagraph (A). (4) Farm Credit Administration regulations. (A) In general. All loans, financial assistance, discounts, and purchases authorized by this subsection are subject to Farm Credit Administration regulations. The loans, assistance, discounts, and purchases must be secured by whatever collateral those regulations may require. (B) Requirement of regulations. The regulations must ensure that these loans, financial assistance, discounts, and purchases are reasonably available to any financing institution authorized to receive these services under paragraph (1)(B) of this subsection if the institution—(i) is significantly involved in lending for agricultural or aquatic purposes; (ii) shows that it continuously needs additional sources of funds to meet the credit needs of its agricultural or aquatic borrowers; (iii) has limited access to national or regional capital markets; and (iv) does not use these services to expand its financing activities to people or purposes other than those authorized under subchapter II. (C) Fees. The regulations may authorize a Farm Credit Bank to charge reasonable fees for a commitment to extend service under this section to the financing institution. (D) Subsidiaries and affiliates. For this subsection, a financing institution together with its subsidiaries and affiliates may be treated as one. The Bank must make the initial decision about treating them as one. If the Bank denies services to a financial institution, the Farm Credit Administration must decide the matter case by case, giving due regard to the financing institution’s total relationship with its subsidiaries and affiliates. (5) Effective date. Nothing in this section requires ending discount relationships that existed on December 24, 1980.