Page:United States Statutes at Large Volume 101 Part 3.djvu/348

 101 STAT. 1646

PUBLIC LAW 100-233—JAN. 6, 1988

banks involved, and shall be consistent with section 4.3A and the regulations issued by the Farm Credit Administration. "(b) BOARD OF DIRECTORS.—Subject to subsection (a), the number

of shares of capital stock issued by a merged bank, and the rights and privileges thereof, shall be determined by the Board of Directors of the merged bank established under this subtitle. "(c) VOTING STOCK.—Voting stock of a merged bank shall be held only— "(1) by associations or cooperatives that were, immediately prior to the merger, entitled to hold voting stock of one of the banks that merged; or "(2) by farmers, ranchers, or producers or harvesters of aquatic products that are or were, immediately prior to the merger, direct borrowers from the merged bank or one of the banks that comprise the merged bank. 12 USC 2279a-4.

"SEC. 7.4. EARNINGS, RESERVES, AND DISTRIBUTIONS.

"(a) USE OF NET EARNINGS.—The Board of Directors of a merged bank shall determine the use or other application of net earnings after payment of operating expenses. "(b) RESTORATION OF VALUE OF IMPAIRED CAPITAL STOCK.—Net

earnings shall first be applied to restore the value of impaired capital stock. "(c) OTHER USES.—After restoration, the application of net earn-

ings may include (but not necessarily in the following order)— "(1) additions to an allocated reserve account; "(2) additions to an unallocated reserve account; "(3) payment of a dividend on capital stock; and "(4) payment of patronage refunds in cash or in stock or other notices of allocation. "(d) USE OF CAPITAL AND RETAINED EARNINGS.—All capital and retained earnings of a merged bank shall be available for use in the activities of the merged bank as the Board of Directors shall determine, without regard to the activities giving rise to such earnings. 12 USC 2279a-5.

"SEC. 7.5. REPORTS BY MERGED BANKS FOR COOPERATIVES.

"(a) IN GENERAL.—When two or more banks for cooperatives merge, the resulting bank shall, not later than December 31 of each year of the succeeding 5 years following the date of the merger, file an annual report with the Farm Credit Administration that— "(1) analyzes the effect of the merger; "(2) includes a breakdown of loans outstanding according to the size of the cooperative stockholders of the bank; and "(3) describes the adequacy of credit and other assistance services provided to smaller cooperatives. "(b) AVAILABILITY.—A copy of the report required in subsection (a) shall be made available to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate.

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