Statute: 1971 ACT AS AMENDED
Title: Title VII Restructuring of System Institutions
Subtitle: Subtitle B Mergers, Transfers of Assets, and Powers of Associations Within a District
Chapter Name: Chapter 3 Reconsideration
U.S. Code Citation: 12 U.S.C. 2279c-2
12 U.S.C. 2279c-2 SEC. 7.9. RECONSIDERATION.
(a) PERIOD. A stockholder vote in favor of—
(1) the merger of districts under this Act;
(2) the merger of banks within a district under section 7.0;
(3) the transfer of the lending authority of a Federal land bank or a merged bank having a Federal land bank as one of its constituents, under section 7.6;
(4) the merger of two or more associations under section 7.8 or 7.13;
(5) the termination of the status of an institution as a System institution under section 7.10; or
(6) the merger of similar banks under section 7.12;
shall not take effect except in accordance with subsection (b) of this section.
(1) NOTICE. Not later than 30 days after a stockholder vote in favor of any of the actions described in subsection (a) of this section, the officer or employee that records such vote shall ensure that all stockholders of the voting entity receive notice of the final results of the vote.
(2) EFFECTIVE DATE. A voluntary merger, transfer, or termination that is approved by a vote of the stockholders of two or more banks or associations shall not take effect until the expiration of 30 days after the date on which the stockholders of such banks or associations are notified of the final result of the vote in accordance with paragraph (1).
(3) PETITION FILED. If a petition for reconsideration of a merger, transfer, or termination vote, signed by at least 15 percent of the stockholders of one or more of the affected banks or associations, is presented to the Farm Credit Administration within 30 days after the date of the notification required under paragraph (1)—
(A) a voluntary merger, transfer, or termination shall not take effect until the expiration of 60 days after the date on which the stockholders were notified of the final result of the vote; and
(B) a special meeting of the stockholders of the affected banks or associations shall be held during the period referred to in subparagraph (A) to reconsider the vote.
(4) VOTE ON RECONSIDERATION. If a majority of stockholders of any one of the affected banks or associations voting, in person or by written proxy, at a duly authorized stockholders' meeting, vote against the proposed merger, transfer, or termination, such action shall not take place.
(5) FAILURE TO FILE PETITION. If a petition for reconsideration of such vote is either not filed prior to the 60th day after the vote or, if timely filed, is not signed by at least 15 percent of the stockholders, the merger, transfer, or termination shall become effective in accordance with the plan of merger, transfer, or termination.
(c) SPECIAL RECONSIDERATION.
(1) ISSUANCE OF REGULATIONS. Notwithstanding any other provision of this Act, the Farm Credit Administration shall issue regulations under which the stockholders of any association that voluntarily merged with one or more associations after December 23, 1985, and before the date of the enactment of this section, may petition for the opportunity to organize as a separate association.
(2) REQUIREMENTS. The regulations issued by the Farm Credit Administration shall require that—
(A) the petition be filed within 1 year after the date of the implementation of such regulations;
(B) the petition be signed by at least 15 percent of the stockholders of any one of the associations that merged during the period;
(C) the petition describe the territory in which the proposed separate association will operate;
(D) if the petition is approved—
(i) the loans of the members of the new association will be transferred from the current association to such new association;
(ii) the stock, participation certificates, and other similar equities of the current association held by members of the new association will be retired at book value and the proceeds of such will be transferred to the new association, and an equivalent amount of stock, participation certificates, and other similar equities will be issued to the members by the new association; and
(iii) the other assets of the current association will be distributed equitably among the current association and any resulting new association.
(A) IN GENERAL. Not later than 30 days after the filing of the petition for organization, the current association shall notify its stockholders that a petition to establish the separate association has been filed.
(B) CONTENTS. The notification required under this paragraph shall contain—
(i) the date of a special stockholders meeting to consider the petition for organization; and
(ii) an enumerated statement of the anticipated benefits and the potential disadvantages to such stockholders if the new association is established.
(C) FCA APPROVAL.
(i) IN GENERAL. All notifications under this paragraph shall be submitted to the Farm Credit Administration Board for approval prior to being distributed to the stockholders.
(ii) AMENDING NOTIFICATION. The Farm Credit Administration Board shall require that, prior to the distribution of the notification to the stockholders, the notification be amended as determined necessary by the Board to provide accurate information to the stockholders that will enable such stockholders to make an informed decision as to the advisability of establishing a new association.
(D) SPECIAL STOCKHOLDERS' MEETING.
(i) TIMING OF MEETING. The special stockholders' meeting to consider the petition shall be held within 60 days after the filing of the petition.
(ii) APPROVAL. If, at the special stockholders' meeting, a majority of the stockholders of the current association who would be served by the new association approve, by voting in person or by proxy, the establishment of the separate association, the Farm Credit Administration shall, within 30 days of such vote, issue a charter to the new association and amend the charter of the current association to reflect the territory to be served by the new association.
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