12 U.S.C. § 2121: Establishment; titles; branches

The banks for cooperatives established pursuant to sections 2 and 30 of the Farm Credit Act of 1933, as amended, shall continue as federally chartered instrumentalities of the United States. The Farm Credit Administration shall approve amendments consistent with this chapter to charters and organizational certificates of banks for cooperatives. Unless an existing bank for cooperatives is merged with another bank, there shall be a bank for cooperatives in each farm credit district. A bank for cooperatives may include in its title the name of the city in which it is located or other geographical designation. When authorized by the Farm Credit Administration each bank for cooperatives may establish such branches or other offices as may be appropriate for the effective operation of its business. Not later than 15 days after the date of the enactment of this section [ Jan. 6, 1988 ], a special committee shall be selected pursuant to subparagraph (B), for the purpose of developing a proposal for the voluntary merger of the banks for cooperatives. one member of each district board elected by the voting stockholders of the bank for cooperatives in the district; and one member chosen from the board of directors of the Central Bank for Cooperatives by the board of such Bank. Not later than 75 days after the date of the enactment of this section [ Jan. 6, 1988 ], the special committee shall develop a plan of merger for all such banks and the Central Bank for Cooperatives into a National Bank for Cooperatives. On completion of the plan of merger pursuant to paragraph (1)(C), the special committee shall submit the proposed plan, together with all information that is to be distributed to the stockholders concerning such plan, to the Farm Credit Administration for approval. Not later than 30 days after the Farm Credit Administration receives the plan of merger, the Administration shall promptly review such plan and advise the special committee concerning any required changes that are necessary to the plan. On approval of the plan by the Farm Credit Administration, the special committee shall, under such procedures as may be established by the committee, submit the plan and recommendations to all voting stockholders of the district banks for cooperatives and the Central Bank for Cooperatives. in accordance with the requirement that, except as provided in section 3.3(d) [ 12 U.S.C. 2124(d) ], each cooperative that is the holder of voting stock in the bank for cooperatives shall be entitled to cast one vote; and on the basis of the total equity interests in the bank (including allocated, but not unallocated, surplus and reserves) held by such stockholders; require a majority vote of the voting stockholders of the Central Bank for Cooperatives voting on a one-bank-one-vote basis; take place not later than 180 days after the date of the enactment of this section [ Jan. 6, 1988 ]; and take place prior to any other merger vote involving a bank for cooperatives. If the stockholders of all of the banks for cooperatives approve the merger, the merger shall take place. If the stockholders of more than one but fewer than all of the banks approve the plan, each such bank whose stockholders voted to approve the merger shall be merged into a single bank for cooperatives, as provided in paragraphs (4) or (5). If the stockholders of eight or more of the district banks for cooperatives approve the merger, such banks, and the Central Bank for Cooperatives, shall be merged into a single bank, which shall be referred to as the ‘National Bank for Cooperatives’. The National Bank for Cooperatives may offer credit and related services to eligible borrowers located within any territory that may be served by Farm Credit System institutions under section 5.0 [ 12 U.S.C. 2221 ], or to any borrower otherwise eligible under section 3.7(b) [ 12 U.S.C. 2128(b) ]. If the stockholders of more than one but fewer than eight of the district banks approve the plan, each such bank, and the Central Bank for Cooperatives (if approved by a numerical majority of its stockholders), shall be merged into a single bank, which shall be referred to as the ‘United Bank for Cooperatives’. The United Bank for Cooperatives shall offer credit and related services only in the territory included, as of the date of the enactment of this section [ Jan. 6, 1988 ], within the boundaries of the districts that had been served by the constituent banks of the United Bank for Cooperatives, and to any borrower otherwise eligible under section 3.7(b) [ 12 U.S.C. 2128(b) ]. Any of the district banks whose stockholders did not approve the plan of merger may offer credit and related services to any eligible borrowers within any territory or area that may be served by the National Bank. Any of the district banks whose stockholders did not approve the plan of merger shall continue as district banks for cooperatives and shall continue to serve only the territory within the boundaries of the district that such banks served as of the date of the enactment of this section [ Jan. 6, 1988 ]. Any district bank whose stockholders did not approve the plan of merger shall be entitled to the availability, from the National Bank for Cooperatives or the United Bank for Cooperatives, as the case may be, of the same credit and related services now provided by the Central Bank for Cooperatives as of the date of the enactment of this section [ Jan. 6, 1988 ], regardless of the decision not to merge. Any district bank referred to in subparagraph (A) may subsequently merge with the National Bank for Cooperatives or the United Bank for Cooperatives, as the case may be, on the approval of the voting stockholders of both banks proposing to merge based on the voting requirement of subsection (b)(1). References in this section to voting stockholders shall include subscribers to the guaranty fund.”