Page:United States Statutes at Large Volume 110 Part 1.djvu/197

 PUBLIC LAW 104-105—FEB. 10, 1996 110 STAT. 173 SEC. 206. BORROWER STOCK Section 4.3A of the Farm Credit Act of 1971 (12 U.S.C. 2154a) is amended— (1) by redesignating subsections (f) and (g) as subsections (g) and (h), respectively; and (2) by inserting after subsection (e) the following: "(f) LOANS DESIGNATED FOR SALE OR SOLD INTO THE SECONDARY MARKET.— "(1) IN GENERAL.— Subject to paragraph (2) and notwithstanding any other provision of this section, the bylaws adopted by a bank or association under subsection (b) may provide— "(A) in the case of a loan made on or after the date of enactment of this paragraph that is designated, at the time the loan is made, for sale into a secondary market, that no voting stock or participation certificate purchase requirement shall apply to the borrower for the loan; and "(B) in the case of a loan made before the date of enactment of this paragraph that is sold into a secondary market, that all outstanding voting stock or participation certificates held by the borrower with respect to the loan shall, subject to subsection (d)(1), be retired. "(2) APPLICABILITY. —Notwithstanding any other provision of this section, in the case of a loan sold to a secondary market under title VIII, paragraph (1) shall apply regardless of whether the bank or association retains a subordinated participation interest in a loan or pool of loans or contributes to a cash reserve. " (3) EXCEPTION. — "(A) IN GENERAL.— Subject to subparagraph (B) and notwithstanding any other provision of this section, if a loan designated for sale under paragraph (1)(A) is not sold into a secondary market during the 180-day period that begins on the date of the designation, the voting stock or participation certificate purchase requirement that would otherwise apply to the loan in the absence of a bylaw provision described in paragraph (1)(A) shall be effective. "(B) RETIREMENT.— The bylaws adopted by a bank or association under subsection (b) may provide that if a loan described in subparagraph (A) is sold into a secondary market after the end of the 180-day period described in the subparagraph, all outstanding voting stock or participation certificates held by the borrower with respect to the loan shall, subject to subsection (d)(1), be retired.". SEC. 207. DISCLOSURE RELATING TO ADJUSTABLE RATE LOANS. Section 4.13(a)(4) of the Farm Credit Act of 1971 (12 U.S.C. 2199(a)(4)) is amended by inserting before the semicolon at the end the following: ", and notice to the borrower of a change in the interest rate applicable to the loan of the borrower may be made within a reasonable time after the effective date of an increase or decrease in the interest rate". SEC. 208. BORROWERS' RIGHTS. (a) DEFINITION OF LOAN.— Section 4.14A(a)(5) of the Farm Credit Act of 1971 (12 U.S.C. 2202a(a)(5)) is amended— (1) by striking "(5) LOAN.— The" and inserting the following:

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