Page:United States Statutes at Large Volume 50 Part 1.djvu/736

 75TH CONGRESS, 1ST SESSION-CH. 704-AUGUST 19, 1937 the Farm Credit Administration, and by an agreement not incon- sistent with airy rules and regulations prescribed by the said Admin- istration, provide for a common board of directors to be elected by t he shareh olders o f the as sociatio ns that a re parti es to th e agree- ment : Provided, however, That each member of any such board shall b e a share holder i n an ass ociation that is a party to the a greement and shall be a bona fide resident of the territory within which such association is authorized to do business : And provided further, That no such agreement shall provide for a term of office in excess of three years for any member of such board. The number of members of the common board of directors shall be specified in the agreement and shall be five or more. The agreement may provide that any director may be elected by the shareholders of one or more of the associations which are parties to the agreement ; that in the balloting for any director an association may vote at a separate meeting of its shareholders or at a joint meeting with the shareholders of any other association or associations participating in the election of the direc- tor ; and that the candidate receiving the highest aggregate number of votes at such meeting or meetings shall be declared elected. When- ever two or more national farm loan associations have entered into such an agreement, the members of the common board of directors provided for in the agreement shall be ex officio the members of the board of directors of each association that is a party to the agree- ment, any provisions of this Act to the contrary notwithstanding. "Whenever a national farm loan association has entered into such an agreement., the power of approving applications for loans through the a ssoci atio n and the powe r of admit ting pers ons t o me mbers hip in the association shall be vested in the loan committee of the asso- ciation in lieu of being vested in its board of directors . The loan committee of any such association shall be elected annually by the shareholders of the association, instead of by its board of directors, and the shareholders shall in addition annually elect two alternates to serve as members of the loan committee at such times as regular members may be absent or disqualified ." (b) Whenever it shall appear that the capital stock o f a natio nal farm loan association is impaired, the Farm Credit Administration may authorize the Federal land bank of the district in which such association is located to make loans to applicants through such association subject to the requirements and conditions specified for direct loans in paragraphs 12 to 16, both inclusive, of section 7 of the Federal Farm Loan Act, as amended (U . S . C ., 1934 edition, title 12, sec . 723), except as herein otherwise specifically provided, and may authorize such association to elect to membership borrowers having loans made pursuant to said paragraphs on lands situated within the chartered territor y of the association. Borrowers admitted to membership in the association pursuant hereto shall be entitled to vote and hold office in the association and the rate of interest on their loans shall be one-fourth of 1 per centuin per annum less than the rate of interest provided at such time for direct loans. The association shall endorse all such mortgage loans but it shall not become liable therefor except as hereinafter provided. When there are ten or more borrowers admitted to membership in an association pursuant hereto whose loans are in good standing, as defined by the Farm Credit Administration, and aggregate not less than $20,000 First. The association shall become liable for the payment of said loans : Provided, however, That, any other provisions of law to the contrary notwithstanding, the shareholders who have become members pursuant to this subsection shall not be held responsible, through the amount paid in and represented by 711 Provisos. Board members to be shareholders and residents of territory. Term of office, re- striction. Number. Balloting. Members of com- mon board to be ex officio directors of each association. Power to approve loans, admitting per- sons to membership vest ed in loan c om- mitt ee. Annual elections. Loans where stock of farm loan associa- tion is impaired. 12U.s.C.$ 723. New borrowers as members ; voting priv- il eges, etc. Endorsement of mortgage loans ; liabil- ity. Ad miss ion to a sso- ciation membership of te n or more borro wers. Liabi lity for payin g loans. Proviso. Indiv idual responsi - bility of shareholders.