Page:United States Statutes at Large Volume 69.djvu/699

 69 S T A T. ]

P U B L I C LAW 3 4 7 - A U G. 11, 1955

657

the regional bank in the same manner, insofar as practicable, as is provided in this section for payments for and issuance of stock on account of loans by the regional bank in which the central bank does not purchase any interest. Subject to rules prescribed by the board of directors of the lending bank with the approval of the Farm Credit Administration a borrower may convert class B stock into class C stock for the purpose of making the investment in class C stock required by this paragraph. After retirement of all class A stock, class C stock also may be retired at par by calling the oldest outstanding class C stock, but class C stock that was issued for a fiscal year period shall not be called for retirement until all class B stock that was issued during or prior to that fiscal year has been called for retirement. "(b) GUARANTY F U N D SUBSCRIPTIONS IN L I E U OF STOCK.—If a cooperative association is not authorized under the laws of the State in which it is organized to take stock in the bank, the bank shall, in lieu thereof, require the association to pay into or have on deposit in a guaranty fund of the bank, or the bank may retain out of the amount of the loan and credit to the guaranty fund, a sum equal to the amount of class C stock which the association would otherwise be required by subsection (a)(3) of this section to own at the time the loan is made and to purchase thereafter. Any such association may make additional payments into the guaranty fund from time to time in lieu of the purchase of class B stock, and shall receive credits to such fund in lieu of patronage refunds payable in class C stock. Each reference in this Act to capital stock or class B or class C stock shall include also the guaranty fund equivalents of such stock, and, to the extent permitted under the laws of a State in which a cooperative association IS organized, a holder of guaranty fund equivalents of either class B or class C stock shall have the same rights and status as a holder of class B or class C stock, respectively. The rights and obligations of the bank as respects such.guaranty fund equivalents shall be identical to its rights and obligations as respects class B or class C stock, respectively. of an association which is a direct borrower from the central bank, each bank for cooperatives shall have a first lien on all stock in the bank owned by each cooperative association as additional collateral for any indebtedness of such association to the bank. In the case of an association which is a direct borrower from the central bank, the central bank shall have a first lien on any amount of class C stock which the borrowing association owns in any regional bank on account of direct loans of such association from the central bank; and the regional bank shall have a lien on such stock junior only to the lien of the central bank. I n any case where the debt of a borrower is in default, the bank may, in accordance with regulations of the Farm Credit Administration, retire and cancel all or a part of the stock of the defaulting borrower at the fair book value thereof, not exceeding par, in total or partial liquidation of the debt, as the case may be, and, to the extent required, corresponding shares held by a regional bank in the central bank shall be retired. "(d)
 * '(c) L I E N ON STOCK.—Except as hereinafter provided in the case

CALCULATION or PROPORTIONATE INTERESTS IN BANKS.—For

the purpose of determining pursuant to section 5(d)(2)(C) of the Farm Credit Act of 1937, as amended, the amount of the capital stock and subscriptions to the guaranty fund of a regional bank for cooperatives held by cooperatives the term 'capital stock and subscriptions to the guaranty fund held by cooperatives' or the equivalent of that term shall also mean all outstanding class B and class C stock and the guaranty fund equivalents thereof." 54402 O - 55 - 4?

12 USC 640d.

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