Page:United States Statutes at Large Volume 50 Part 1.djvu/737

 712 Reduction of inter- est rate. Exchange of stock. 12 U.S. C.1723(d). Admi ssion of n ew members, etc. Ele ct ion of loa n committee from stock- holders. Proviso. Admi ssion, whe re sto ckhol ders fail to elect loan committee . Segregation of rec- ords, accounts, etc. Special provisions. 75TH CONGRESS, 1sT SESSION-CH. 704 --AU GUST 19, 19 37 their shares o r otherwise, for any contracts, de bts, or engage- ments of the association entered into before the date on which the fi rst me mber wa s admit ted to the ass ociatio n purs uant to this subsection and the shareholders of such association who were members prior to said date shall not be held responsible, through the amount paid in and represented by their shares or oth erwise, for a ny mort gages e ndorsed by suc h asso ciation on or after said date, but this provision shall not be construed to relieve any other liability with respect to stock held by shareholders who were members prior to said date. Second. The interest rate paid by each such borrower on each such loan shall, beginning with the next regular installment date, be reduced one-fourth of 1 per centum per annum. Third. The stock in the Federal land bank held by each of said borrowers shall be exchanged for association stock in the manner provided for in paragraph 15 of section 7 o f the Federal Farm Loan Act as amended (U . S . C ., 1934 edition, title 12, sec. 723, subset . (d) j . Fourth . The association may thereafter admit new members, endorse their loans, and become liable for the payment of such loans as provided in paragraph "First" of this subsection . Fi f th . At the next annual meetin g of stockholders, and there- after, the loa n committee of su ch association ma y be elected by the members who become stockholders pursuant to this sub- section and any loan committee so elected shall ha ve the powers specified for lo an committees ele cted as provided in subsection (a) of this section : Provided, however, That in the event such stockholders fail to elect the loan committee, new members shall be admitted to the association as otherwise provided in the Fede ral Farm Loan Act , as amen ded . Si x th . In acco rdance with rules and regulations p rescribed by the Farm Credit Administration, the association shall maintain separate capital-stock records ; shall keep all capital losses or gains reserve s (incl uding l egal re serves), and dividen ds re- ceivedd from the Federal land bank on stock owned by the asso- ciation in conne ction with loans for which it beco mes liable as provided in this subsection separate and apart from capital losses or gains, reserves (including legal reserves), and div iden ds rece ived from the Fed eral land ban k on sto ck ow ned by the association in connection with other loans of the association ; and shall segregate any undivided profits of the a ssoc iati on resulting from its business operations in like manner when so required by rules and regulations of the Farm Credit Adminis- tration. Sub ject to the ot her pro vision s of th e Feder al Farm Loan Act with respect to the declaration of dividends, dividends may be declared exclusively on association stock owned by borrowers with loans for which the association becomes liable as provided in this subsection or exclusively on association stock owned by borrowers with other loans through the association. If the loan of any borrower who was admitted to membership pur- suant hereto is not in good standing at the time when there are ten or more b orrowers with loan s aggregating not less than $20,00 0 which are in good standing, the provisions of paragraphs "First", "Second", and "Third" of this subsection shall be applicable to his loan at such time as it shall be placed in good standing. If and when all impairment is removed in the stock owned by share- holders with loans which were made prior to the date on which the first member was admitted to the association pursuant to this sub-