Statute: AGRICULTURAL CREDIT ACT OF 1987
Title: Title III Capitalization of System Institutions
U.S. Code Citation: 12 U.S.C. 2154 note
TITLE III—CAPITALIZATION OF SYSTEM INSTITUTIONS12 U.S.C. 2154 SEC. 301. CAPITALIZATION OF SYSTEM INSTITUTIONS.
note (a) MINIMUM CAPITAL ADEQUACY STANDARDS.
(1) IN GENERAL.
(A) ESTABLISHMENT. Within 120 days after the date of the enactment of this Act, the Farm Credit Administration shall issue regulations under section 4.3(a) of the Farm Credit Act of 1971 (12 U.S.C. 2154(c)) that establish minimum permanent capital adequacy standards for Farm Credit System institutions.
(B) BASIS FOR ESTABLISHMENT. The standards established under subparagraph (A) shall apply to an institution based on the financial statements of the institution prepared in accordance with generally accepted accounting principles.
(C) RATIO OF CAPITAL TO ASSETS. The standards established under subparagraph (A) shall specify fixed percentages representing the ratio of permanent capital of the institution to the assets of the institution, taking into consideration relative risk factors as determined by the Farm Credit Administration.
(D) PHASE-IN PERIOD. The standards established under subparagraph (A) shall be phased in during the 5-year period beginning on the date of the enactment of this Act.
(2) EMERGENCY POWER NOT AVAILABLE. The Farm Credit Administration shall not invoke the emergency provisions of section 5.17(c)(2) of the Farm Credit Act of 1971 (12 U.S.C. 2251(c)(2)) with respect to the issuance of the proposed regulations required under paragraph (1)(A).
(3) PROHIBITIONS DURING TRANSITION PERIOD. During the 5-year period specified in paragraph (1)(D), the Farm Credit Administration shall not initiate any receivership, conservatorship, liquidation, or enforcement action against any System institution certified to issue preferred stock under section 6.27 of the Farm Credit Act of 1971 (as added by section 201 of this Act), solely because of the failure of such institution to meet minimum permanent capital adequacy standards unless such action is recommended or concurred in by the Farm Credit System Assistance Board established under section 6.0 of such Act (as added by section 201 of this Act).
(4) PERMANENT CAPITAL. For purposes of this subsection, the term "permanent capital" has the same meaning given that term in section 4.3A(a)(1) of the Farm Credit Act of 1971.
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