12 U.S.C. § 2130 — Ownership of stock by borrowers
submitted 55 years ago by Pub. L. 92-181 to r/title-12-BANKS-AND-BANKING · 231 words · no verdicts yet
A borrower entitled to voting stock must own at least one share and may be required to buy more stock. The stock requirement at closing cannot exceed 10 percent of the loan’s face amount, with an exception for certain loans sold to or shared with other financial institutions.
(a) Each borrower entitled to hold voting stock must, at the time a loan is made by a bank for cooperatives, own at least one share of voting stock and must be required by the bank to invest in additional voting stock or nonvoting investment stock at that time, or from time to time, as the lending bank may determine, but the requirement for investment in stock at the time the loan is closed must not exceed an amount equal to 10 percent of the face amount of the loan. Such additional ownership requirements may be based on the face amount of the loan, the outstanding loan balance or on a percentage of the interest payable by the borrower during any year or during any quarter of it, or upon such other basis as the bank determines will provide adequate capital for the operation of the bank and equitable ownership of it among borrowers. (b) Despite the provisions of subsection (a) of this section, the purchase of stock need not be required about that part of any loan made by a bank for cooperatives which it sells to or makes in participation with financial institutions other than any of the banks for cooperatives. In such cases the distribution of earnings of the bank for cooperatives must be on the basis of the interest in the loan retained by such bank.
Each borrower entitled to hold voting stock shall, at the time a loan is made by a bank for cooperatives, own at least one share of voting stock and shall be required by the bank to invest in additional voting stock or nonvoting investment stock at that time, or from time to time, as the lending bank may determine, but the requirement for investment in stock at the time the loan is closed shall not exceed an amount equal to 10 per centum of the face amount of the loan. Such additional ownership requirements may be based on the face amount of the loan, the outstanding loan balance or on a percentage of the interest payable by the borrower during any year or during any quarter thereof, or upon such other basis as the bank determines will provide adequate capital for the operation of the bank and equitable ownership thereof among borrowers.
Notwithstanding the provisions of subsection (a) of this section, the purchase of stock need not be required with respect to that part of any loan made by a bank for cooperatives which it sells to or makes in participation with financial institutions other than any of the banks for cooperatives. In such cases the distribution of earnings of the bank for cooperatives shall be on the basis of the interest in the loan retained by such bank.
Source credit: (Pub. L. 92–181 title III, § 3.9, Dec. 10, 1971, 85 Stat. 605; Pub. L. 96–592, title III, § 306, Dec. 24, 1980, 94 Stat. 3445; Pub. L. 100–233, title VIII, § 802(q), Jan. 6, 1988, 101 Stat. 1712; Pub. L. 115–334, title V, § 5411(9), Dec. 20, 2018, 132 Stat. 4680.)
- 1971Enacted · Pub. L. 92-181 · 85 Stat. 605
- 1980Amended · Pub. L. 96-592 · 94 Stat. 3445
- 1988Amended · Pub. L. 100-233 · 101 Stat. 1712
- 2018Amended · Pub. L. 115-334 · 132 Stat. 4680
A history note hasn’t been published yet. The record shows enactment by Pub. L. 92-181 on 1971-12-10.
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