12 U.S.C. § 2074 — Production credit association capitalization
submitted 38 years ago by Pub. L. 92-181 to r/title-12-BANKS-AND-BANKING · 223 words · no verdicts yet
This section requires production credit associations to provide for capitalization and stock rules in their bylaws. It requires excess earnings to restore capital and build surplus before allowing certain patronage distributions.
(a) In general. Consistent with section 2154a and subject to Farm Credit* Administration regulations, each production credit association must use its bylaws to provide for its capitalization and for issuing, holding, transferring, and retiring stock. Except as subsection (b) provides, the bylaws must also provide for distributing earnings.
(b) Application of earnings. At the end of each fiscal year, the association must apply earnings above operating expenses, including valuation reserves for loan assets required by generally accepted accounting principles: (1) first, to restore any impaired capital; and (2) second, to establish and maintain surplus accounts. The Farm Credit Bank prescribes the minimum total amount of those accounts.
(c) Patronage. If the bylaws allow it and the Farm Credit Administration gives its general directions, available net earnings at the end of a fiscal year may be distributed to patrons based on their patronage in stock, participation certificates, or cash. Earnings above that year’s operating expenses that remain in the surplus account may also be allocated to patrons on that basis.
In accordance with section 2154a of this title, each production credit* association shall provide, through its bylaws and subject to Farm Credit Administration regulations, for its capitalization and the manner in which its stock shall be issued, held, transferred, and retired and, except as provided in subsection (b), its earnings distributed.
At the end of each fiscal year, each production credit association shall apply the amount of the earnings of the association for the fiscal year in excess of the operating expenses of the association (including provision for valuation reserves against loan assets in accordance with generally accepted accounting principles)—
first, to the restoration of the impairment (if any) of capital; and
second, to the establishment and maintenance of the surplus accounts, the minimum aggregate amount of which shall be prescribed by the Farm Credit Bank.
When the bylaws of an association so provide and subject to the general directions of the Farm Credit Administration, available net earnings at the end of any fiscal year may be distributed on a patronage basis in stock, participation certificates, or in cash. Any part of the earnings of the fiscal year in excess of the operating expenses for such year held in the surplus account may be allocated to patrons on a patronage basis.
Source credit: (Pub. L. 92–181, title II, § 2.3, as added Pub. L. 100–233, title IV, § 401, Jan. 6, 1988, 101 Stat. 1632; amended Pub. L. 102–552, title V, § 501, Oct. 28, 1992, 106 Stat. 4129.)
- 1988Enacted · Pub. L. 92-181 · 101 Stat. 1632
- 1992Amended · Pub. L. 102-552 · 106 Stat. 4129
A history note hasn’t been published yet. The record shows enactment by Pub. L. 92-181 on 1988-01-06.
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