Page:United States Statutes at Large Volume 110 Part 1.djvu/207

 PUBLIC LAW 104-105—FEB. 10, 1996 110 STAT. 183 "(b) PROHIBITION. —The Corporation may prohibit or limit, by regulation or order, any golden parachute payment or indemnification payment by a Farm Credit System institution (including any conservator or receiver of the Federal Agricultural Mortgage Corporation) in troubled condition (as defined in regulations issued by the Corporation). "(c) FACTORS TO BE TAKEN INTO ACCOUNT.— The Corporation shall prescribe, by regulation, the factors to be considered by the Corporation in taking any action under subsection (b). The factors may include— "(1) whether there is a reasonable basis to believe that an institution-related party has committed any fraudulent act or omission, breach of trust or fiduciary duty, or insider abuse with regard to the Farm Credit System institution involved that has had a material effect on the financial condition of the institution; "(2) whether there is a reasonable basis to believe that the institution-related party is substantially responsible for the insolvency of the Farm Credit System institution, the appointment of a conservator or receiver for the institution, or the institution's troubled condition (as defined in regulations prescribed by the Corporation); "(3) whether there is a reasonable basis to believe that the institution-related party has materially violated any applicable law or regulation that has had a material effect on the financial condition of the institution; "(4) whether there is a reasonable basis to believe that the institution-related party has violated or conspired to violate— "(A) section 215, 657, 1006, 1014, or 1344 of title 18, United States Code; or "(B) section 1341 or 1343 of title 18, United States Code, affecting a Farm Credit System institution; "(5) whether the institution-related party was in a position of managerial or fiduciary responsibility; and "(6) the length of time that the party was related to the Farm Credit System institution and the degree to which— "(A) the payment reasonably reflects compensation earned over the period of employment; and "(B) the compensation represents a reasonable payment for services rendered. "(d) CERTAIN PAYMENTS PROHIBITED.— NO Farm Credit System institution may prepay the salary or any liability or legal expense of any institution-related party if the payment is made— "(1) in contemplation of the insolvency of the institution or after the commission of an act of insolvency; and "(2) with a view to, or with the result of— "(A) preventing the proper application of the assets of the institution to creditors; or "(B) preferring 1 creditor over another creditor. "(e) RULE OF CONSTRUCTION.— Nothing in this section— "(1) prohibits any Farm Credit System institution from purchasing any commercial insurance policy or fidelity bond, so long as the insurance policy or bond does not cover any legal or liability expense of an institution described in subsection (a)(2); or

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