12 U.S.C. § 2071: Organization and charters

Each production credit association shall continue as a Federally chartered instrumentality of the United States. Production credit associations may be organized by 10 or more farmers or ranchers or producers or harvesters of aquatic products desiring to borrow money under the provisions of this part. The proposed articles of association shall be forwarded to the Farm Credit Bank for the district accompanied by an agreement to subscribe on behalf of the association for stock in the bank in such amounts as may be required by the bank. objects for which the association is formed; powers to be exercised by the association in carrying out the functions authorized by this part; and territory the association proposes to serve. The articles shall be signed by persons desiring to form such an association and shall be accompanied by a statement signed by each such person establishing eligibility to borrow from the association in which such person will become a stockholder. A copy of the articles of association shall be forwarded to the Farm Credit Administration with the recommendations of the bank concerning the need for such an association in order to adequately serve the credit needs of eligible persons in the proposed territory and whether that territory includes any area described in the charter of another production credit association. The Farm Credit Administration for good cause shown may deny the charter. On approval of the proposed articles by the Farm Credit Administration, and on the issuance of a charter, the association shall become as of such date a federally chartered body corporate and an instrumentality of the United States. provide for the organization of the association; provide for the initial amount of stock of the association; provide for the territory within which the association’s operations may be carried on; and approve amendments to the charter of the association. Not later than 6 months after the date of the merger of the Federal land bank and the Federal intermediate credit bank in a district, the Boards of Directors of each Federal land bank association and each production credit association in such district, that share substantially the same geographical territory with each other, shall submit to the voting stockholders of each such association for their approval, a plan, approved by the supervising bank and the Farm Credit Administration, for merging such associations. The stockholder vote required for approval of a merger under subsection (a) shall be a majority of the voting stockholders of each association voting, in person or by written proxy, at a duly authorized stockholders meeting. Not later than 60 days prior to the end of the 12-month period beginning on the date of the enactment of this section [ Jan. 6, 1988 ], the plan of merger under subsection (a), together with all information to be presented to the stockholders, shall be submitted to the Farm Credit Administration. The Farm Credit Administration shall expedite its consideration of the plan and accompanying information submitted under paragraph (2) so that review and approval of such plan and information shall be completed by the Administration so as to enable a stockholder vote to occur within the 12-month period referred to in paragraph (2). On approval of a merger under this subsection, the resulting association shall be a direct lender in the same manner as applies to production credit associations.” Notwithstanding any other provision of law, effective for the 12-month period beginning on the date of enactment of this Act [ Jan. 6, 1988 ], each Federal land bank association or production credit association, whose chartered territory adjoins the territory of another district, may petition the Farm Credit Administration to amend the charters of the association and the adjoining district bank to provide that the territory of the association is part of the adjoining district. To be considered under this section, the petition must be signed by not less than 15 percent of the stockholders of the association. Only one such petition may be filed by an association under this section. to amend the charters of the association and the district bank; and a majority of the stockholders of the association voting, in person or by proxy, at a duly authorized stockholders’ meeting held for such purpose; the board of directors of the adjoining district bank; the Farm Credit System Assistance Board; and the Farm Credit Administration Board.”