Page:United States Statutes at Large Volume 106 Part 5.djvu/492

 106 STAT. 4130 PUBLIC LAW 102-552—OCT. 28, 1992 SEC. 502. RISK MANAGEMENT PARTICIPATION AUTHORITY. Section 3.1(11) (12 U.S.C. 2122(11)) is amended— (1) by inserting "(A)" after "(11)"; and (2) by adding at the end the following new subparagraph: "(B)(i) Participate in any loan of a type otherwise autiiorized under this title that is made to a similar entity by any institution in the business of extending credit, including purchases of participations in loans to finance international trade transactions involving the sale of agricultural commodities or the products thereof, except that^ "(I) a bank for cooperatives may not participate in a loan— "(aa) if the participation would cause the total amount of all loan participations by the bank under this subparagraph involving a single credit risk to exceed 10 percent of the bank's total capitial; or " (bb) if the participation by the bank will itself eaual or exceed 50 percent of the principal of the loan or, when taken together with participations in the loan by the other banks for cooperatives under this subparagraph, will cause the cumulative amount of the participations by all banks for cooperatives in the loan to equal or exceed 50 percent of the principal of the loan; "(II) a bank for cooperatives may not participate in a loan to a similar entity under this subparagraph if the similar entity has a loan or loan commitment outstanding with a Farm Credit Bank or an association chartered under this Act, unless agreed to by the Bank or association; and "(III) the cumulative amount of participations that a bank for cooperatives may have outstanding under this subparagraph at any time may not exceed 15 percent of the bsuik's total assets. "(ii) As used in this subparagraph, the term 'similar entity^ means an entity that, while not eligible for a loan under section 3.8, is functionally similar to an entity eligible for a loan under section 3.8 in that it derives a majority of its income from, or has a majority of its assets invested in, the conduct of activities functionally similar to those conducted by the entity. "(iii) With respect to similar entities that are eligible to borrow from a Farm Credit Bank or association under title I or II, the authority of a bank for cooperatives to participate in loans to the entities under this subparagraph shall be subject to the prior approval of the Farm Credit Bank or Banks in whose chartered territoiy the entity is eligible to borrow. The approval may be granted on an annual basis and under such terms and conditions as may be agreed on between the bank for cooperatives and the Farm Credit Bank or Banks that serve the territory.". SEC. 503. EQUmr VOTING FOR ONE DIRECTOR OF EACH BANK FOR COOPERATIVES. Section 3.2(a) of the Farm Credit Act of 1971 (12 U.S.C. 2123(a)) is amended— (1) by inserting "(1)" after "(a)"; and (2) by adding at the end the following new paragraph: "(2)(A) If approved by the stockholders through a bvlaw amendment, the nomination and election of one member from a bank for cooperatives (other than the National Bank for Cooperatives) shall be carried out with each voting stockholder of a bank for

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