Statute: 1971 ACT AS AMENDED
Title: Title VI Assistance to Farm Credit System
Subtitle: Subtitle A - Assistance Board
U.S. Code Citation: 12 U.S.C. 2278a-6
12 U.S.C. 2278a-6 SEC. 6.6. SPECIAL POWERS.
(a) IN GENERAL. In the case of a System institution that requests certification under section 6.4, the Assistance Board may—
(1) require the institution to obtain approval from the Assistance Board before implementing business, operating, and investment plans and policies;
(2) if one or more of the conditions described in section 4.12(b) are met, as determined by the Farm Credit Administration, direct the Farm Credit Administration Board to appoint a conservator for the institution, in accordance with such section, and to instruct the conservator to evaluate the operations of the institution and report to the Farm Credit Administration Board and the Assistance Board on the possibility of restoring the institution to sound financial condition;
(3) request that the Farm Credit Administration Board or the Farm Credit Administration, as appropriate—
(A) approve or require a merger or consolidation of the institution to the extent authorized under this Act;
(B) initiate action to appoint a receiver under section 4.12(b); or
(C) exercise any enforcement power authorized under this Act;
(4) require the institution to obtain approval from the Assistance Board before setting the terms and conditions of any debt issuances of the institution;
(5) require the institution to obtain approval from the Assistance Board before setting the policy on credit standards to be used, and the policy on rates of interest to be charged on loans, by the institution, including requiring that—
(A) the institution set interest rates at levels necessary to ensure that the cost of money to the institution reflects the marginal cost to the institution of borrowing an additional amount of money at the time a new loan is made; and
(B) loans primarily secured by real estate mortgages not exceed 85 percent of the appraised agricultural value of the real estate security, or 75 percent of the then current market value of the real estate security, whichever is greater;
(6) require the institution to obtain approval from the Assistance Board for the design of management information and accounting systems at the institution, and of the continued use by the institution of regulatory accounting practices in accordance with sections 4.8(b) and 5.19(b);
(7) require that the plans and policies of the institution resulting from the merger of System banks reduce the overhead costs of such institution, to the maximum extent practicable, with respect to the delivery of services to, and performance of duties for, System associations in the district;
(8) require the institution to obtain approval from the Assistance Board of—
(A) the hiring policies of the institution;
(B) the compensation and retirement benefits of the chief executive officer, other managers, and directors of the institution;
(C) any change in the management of the institution; and
(D) policy decisions regarding continued employment and promotion of the officials referred to in subparagraph (B);
(9) suspend for any period of time, or terminate, any certification granted to an institution under section 6.4 if the Farm Credit Administration notifies the Assistance Board that the institution has substantially deviated from the institution's business plan or has failed to comply with a term or condition governing the use of any financial assistance provided to the institution under this title; and
(10) take such other action as the Assistance Board determines may be necessary to establish prudent operating practices at the institution and to return the institution to a sound financial condition.
(b) SUSPENSION OF ASSISTANCE.
(1) NOTIFICATION. The Assistance Board shall promptly notify the Farm Credit Administration of any action taken by the Assistance Board under subsection (a)(9) of this section.
(2) ENFORCEMENT. The Farm Credit Administration may use any of its enforcement powers, with respect to any institution to which the Assistance Board has provided assistance or has certified the institution to issue preferred stock under section 6.27, to obtain the compliance of the institution with the terms or conditions governing the use of financial assistance provided under this title.
(c) UNDATED LETTERS OF RESIGNATION. The Assistance Board shall not, for any reason, request or require any member of the board of directors of any System institution to submit to the Assistance Board an undated letter of resignation. Immediately after the date of the enactment of this title, the Assistance Board shall destroy all such letters over which it has control.
(d) REPORTS. During the 5-year period beginning on the date of the enactment of this title, the Assistance Board, in coordination with the Financial Assistance Corporation, shall report annually to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate on the extent to which System institutions translate the savings in the cost of the operations of such institutions due to the Federal assistance provided to the System under this title into lower interest rates charged to System borrowers or enhanced financial solvency of such institutions.
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