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12 U.S. C., $ 952

F. F. L. Act, 8 28 Requirements, responsibilities, and penalties applicable to examiners; examinations; reports.-Farm credit examiners shall be subject to the same requirements, responsibilities, and penalties as are applicable to national bank examiners under chapters 2 and 3 of this title and other provisions of law. Whenever directed by the Farm Credit Administration, said examiners shall examine the condition of any national farm loan association and report the same to the Land Bank Commissioner. They shall examine and report the condition of

every Federal land bank and joint stock land bank at least once each year. (July 17, 1916, c. 245, $ 28, 39 Stat. 381; Mar. 27, 1933, Ex. Or. 6084, June 16, 1933, c. 98, $ 80 (a), 48 Stat. 273; Aug. 19, 1937, c. 704, $ 20, 50 Stat. 710, July 12, 1943, c. 15, § 1, 57 Stat. 424.)

12 U.S.C., $ 953

F.F. L. Act, $ 28 Salaries of examiners.-Farm credit examiners shall receive salaries to be fixed by the Farm Credit Administration. (July 17, 1916, C. 245, $ 28, 39 Stat. 381; Mar. 27, 1933, Ex. Or. 6084; Aug. 19, 1937, c. 704, § 20, 50 Stat. 710.)

For assessments on banks for costs of examinations, see $ 832 of this title.

RECEIVERS AND CONSERVATORS

12 U.S.C., § 961

F.F.L. Act, $ 29 National farm loan associations; institution and conduct of receivership; duties and powers of receivers.-Upon receiving satisfactory evidence that any national farm loan association has failed to meet its outstanding obligations of any description the Farm Credit Administration may forthwith declare such association insolvent and appoint a receiver and require of him such bond and security as it deems proper: Provided, That no national farm loan association shall be declared insolvent by said administration until the total amount of defaults of current interest and amortization installments on loans indorsed by national farm loan associations shall amount to at least $150,000 in the farm credit district, unless such association shall have been in default for a period of two years. Such receiver, under the direction of the Farm Credit Administration, shall take possession of the books, records, and assets of every description of such association, collect all debts, dues, and claims belonging to it, and, with the approval of the Farm Credit Administration, or upon the order of a court of record of competent jurisdiction, may sell or compound all bad or doubtful debts, and, on a like approval or order, may sell all the real and personal property of such association, on such terms as the Farm Credit Administration or said court shall direct. (July 17, 1916, c. 245, $ 29, 39 Stat. 381; Mar. 27, 1933, Ex. Or. 6084; Aug. 19, 1937, c. 704, 85 (á), 50 Stat. 704.) 12 U.S.C., 8962

F.F. L. Act, $ 29 Disposition of moneys collected by receiver; reports.-Such receiver shall pay over all money so collected to the Treasurer of the

United States, subject to the order of the Farm Credit Administration, and also make report to said administration of all his acts and proceedings. The Secretary of the Treasury shall have authority to deposit at interest any money so received. (July 17, 1916, c. 245, $ 29, 39 Stat. 381; Mar. 27, 1933, Ex. Or. 6084.)

12 U.S. C., § 963

F.F. L. Act, $ 29 Federal and joint stock land banks; institution and conduct of receivership. Upon default of any obligation, Federal land banks and joint stock land banks may be declared insolvent and placed in the hands of a receiver by the Farm Credit Administration, and proceedings shall thereupon be had in accordance with the provisions of sections 961–967 regarding national farm loan associations. (July 17, 1916, c. 245, $ 29, 39 Stat. 381; Mar. 27, 1933, Ex. Or. 6084.) The United States Code uses the term “961-963, 964–967" instead of the foregoing

“961-967."

12 U.S.C., S 964

F.F.L. Act, 8 29 National farm loan associations; disposition of stock in Federal land bank.-If any national farm loan association shall be declared insolvent and a receiver shall be appointed therefor by the Farm Credit Administration, the stock held by it in the Federal land bank of its district shall be canceled without impairment of its liability and all payments on such stock, with accrued dividends, if any, since the date of the last dividend shall be first applied to all debts of the insolvent farm loan association to the Federal land bank and the balance, if any, shall be paid to the receiver of said farm loan association: Provided, That in estimating said debts contingent liabilities incurred by national farm loan associations under the provisions of this chapter on account of default of principal or interest of indorsed mortgages shall be estimated and included as a debt, and said contingent liabilities shall be determined by agreement between the receiver and the Federal land bank of the district, subject to the approval of the Farm Credit Administration, and if said receiver and said land bank cannot agree, then by the decision of the Land Bank Commissioner, and the amount thus ascertained shall be deducted in accordance with the provisions of section 961–967 of this title from the amount otherwise due said national farm loan association for said canceled stock. Whenever the capital stock of a Federal land bank shall be reduced, the board of directors shall cause to be executed a certificate to the Farm Credit Administration, showing such reduction of capital stock, and, if said reduction shall be due to the insolvency of a national farm loan association, the amount repaid to such association. (July 17, 1916, c. 245, $ 29, 39 Stat. 381; Mar. 27, 1933, Ex. Or. 6084; June 16, 1933, c. 98, $ 80 (a), 48 Stat. 273.)

12 U.S.C., 965

F. F. L. Act, $ 29 Voluntary liquidation; consolidation of farm loan associations.—No national farm loan association, Federal land bank or joint stock land bank shall go into voluntary liquidation without the written consent of the Farm Credit Administration, but national farm loan associations may consolidate under rules and regulations promulgated

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by the Farm Credit Administration. (July 17, 1916, c. 245, $ 29, 39 Stat. 381; Mar. 27, 1933, Ex. Or. 6084.)

For limitations on new business of joint stock land banks, and provisions for assisting in their orderly liquidation, see § 810 and g 823 (note), of this title.

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12 U.S.C., 8 966

F. F. L. Act, 8 29 National farm loan associations; disposition of stock in Federal land bank upon voluntary liquidation; personal liability of members.-Upon liquidation of any national farm loan association, the stock in the Federal land bank held by such association shall be canceled and the Federal land bank shall thereupon issue to the borrowers through such association an amount of stock in the Federal land bank equal to the amount of stock held by such borrowers in the liquidated association, such stock to be held by the bank as collateral to the loans of such borrowers and to be paid off and retired at par in the same manner as stock held by borrowers in farm loan associations, and the Federal land bank shall pay to the borrowers holding such stock the same dividends as are paid to national farm loan associations by such bank. The personal liability of the stockholders in such liquidated association to the association shall survive such liquidation and shall be vested in the bank in that district, which may enforce the same as fully as the association could if in existence. (July 17, 1916, c, 245, $ 29, 39 Stat. 381; Mar. 4, 1923, c. 252, § 311, 42 Stat. 1478.)

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12 U.S.C., 8967

F.F. L. Act, 8 29 Conservator in lieu of receiver-(a) Appointment; compensation; expenses.—Upon receiving satisfactory evidence that any national farm loan association has failed to meet its outstanding obligations of any description, and that it will be to the best interests of its creditors and stockholders for the association to continue in business, the Farm Credit Administration may, in its discretion, in lieu of appointing a receiver as provided in sections 961–966 of this title, appoint a conservator for such association and require of him such bond and security as the Administration may deem proper. The person so appointed shall be a land bank appraiser appointed under the authority of sections 651-664 of this title: Provided, however, That the Farm Credit Administration may, in its discretion, appoint some other qualified person. Any land bank appraiser appointed as a conservator shall serve without any additional compensation. Any other person appointed as a conservator shall receive such compensation as the Farm Credit Administration may authorize. Such compensation and all necessary and proper expenses of any such conservatorship shall be paid out of the assets of such association and shall be a lien thereon which shall be prior to any other lien. (July 17, 1916, c. 215, S29, 39 Stat. 381; Aug. 19, 1937, c. 704, $ 25 (d), 50 Stat. 713.)

(b) Conservation of assets; preparation of report of association's financial condition. The conservator, under the direction of the Farm Credit Administration, may, when directed so to do, take possession of the books, records, and assets of every description of such association, and take such action as may be necessary to conserve such assets pending final determination of the financial condition of

the association and the conditions under which it may be permitted to continue in business. Such conservator shall at the earliest practicable date make such investigations as shall be necessary to enable him to prepare an accurate report on the financial condition of such association. In preparing such report he shall value the association's assets and determine its indebtedness: Provided, That in determining said indebtedness contingent liabilities incurred by the association under the provisions of this chapter on endorsed mortgages shall be estimated and included as a debt. On the basis of said evaluation of the association's assets and indebtedness, the conservator shall determine the fair book value of the outstanding stock of said association and the claims of any retired shareholders based on their previous stock ownership. Upon its completion said report shall be submitted to the Federal land bank of the district and said bank shall thereupon indicate its approval thereof or note any exceptions thereto and submit such report together with its exceptions, if any, to the Farm Credit Administration for consideration. (July 17, 1916, c. 245, $ 29, 39 Stat. 381; Aug. 19, 1937, c. 704, $ 25 (d), 50 Stat. 713.)

(c) Approval or disapproval of report; powers of Administration.—If said report is approved, in whole or in part, by the Farm Credit Administration, upon recommendation of the Federal land bank of the district said Administration shall then decide whether such association shall be permitted to pay off and retire its capital stock at its fair book value, upon full payment of the mortgage loans in connection with which such stock was issued originally, and to settle on the same basis the claims of any of its stockholders who have previously paid their loans in full, but have not received credit for, or the proceeds of their stock in such association. At the same time the Farm Credit Administration shall also decide whether it will permit said association to admit new members pursuant to section 724 of this title. If the decision of said Administration is in the affirmative, it may terminate the conservatorship and turn the affairs of the association back to its board of directors. If said report is 110t approved or the decision of said Administration is in the negative, it may, in its discretion, terminate the conservatorship and permit such association to resume the transaction of its business subject to such terms, conditions, restrictions, and limitations as it may prescribe for the protection of the rights of creditors and stockholders, or said Administration may appoint a receiver for the association as provided in sections 961-966 of this title. (July 17, 1916, c. 245, $ 29, 39 Stat. 381; Aug. 19, 1937, c. 704, $ 25 (d), 50 Stat. 713.)

(d) Settlement with shareholders. Any settlement made with a retiring or retired shareholder on the basis of the fair book value of the stock of the association pursuant to this section shall be made only on condition that said shareholder agrees to accept such settlement as payment in full. If any shareholder or former shareholder does not desire to settle on such basis, he may, in lieu thereof, be given a participation certificate which will entitle him to share pro rata, on the basis of the number of shares of stock which he owned in the association, in the distribution of any assets of the association which is made after all of its indebtedness to creditors has been satisfied. The Federal land bank of the district may pay to the association from

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the proceeds of bank stock retired in connection with the payment in full of loans endorsed by such association an amount sufficient to permit the association to make the settlements provided for in this section and any balance of such proceeds shall be retained by the bank and applied as a credit on the indebtedness of the association to it. (July 17, 1916, c. 245, $ 29, 39 Stat. 381; Aug. 19, 1937, c. 704, $ 25 (d), 50 Stat. 713.)

(é). Readjustment of fair book value of under par stock.-After any determination by the Farm Credit Administration as provided in this section, that the fair book value of the stock of a national farm loan association is less than. the par value thereof, periodically thereafter any increase in the fair book value of said stock resulting from earnings of the association and actual recoveries in excess of the valuations used by the Farm Credit Administration in determining the fair book value of the stock of such association, as provided in this section, shall, under rules and regulations of the Farm Credit Administration, be apportioned ratably on a per-share basis to all outstanding stock or participation certificates having a fair book value less than par until the fair book value of all such stock or participation certificates is equal to the par value thereof. (July 17, 1916, c. 245, $ 29, 39 Stat. 381; Aug. 19, 1937, c. 704, $ 25 (d), 50 Stat. 713.)

(f) Continued losses; appointment of another conservator or receiver.-In the event that the indebtedness, as determined by the conservator, of an association which has been under conservatorship pursuant to this section increases in excess of the earnings of such association, the Farm Credit Administration may, in its discretion, again appoint a conservator for the association, or it may appoint a receiver as provided in sections 961-966 of this title. (July 17, 1916, c. 245, $ 29, 39 Stat. 381; Aug. 19, 1937, c. 704, $ 25 (d), 50 Stat. 713.)

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STATE LEGISLATION IMPAIRING SECURITY OF FARM LOANS

12 U.S.C., 8971

F.F.L. Act, 8 30 Examination to ascertain adequacy of safeguards to mortgagee.-It shall be the duty of the Land Bank Commissioner to make examination of the laws of every State of the United States and to inform the Farm Credit Administration as rapidly as may be whether in his judgment the laws of each State relating to the conveying and recording of land titles, and the foreclosure of mortgages or other instruments securing loans, as well as providing homestead and other exemptions and granting the power to waive such exemptions as respects first mortgages, are such as to assure the holder thereof adequate safeguards against loss in the event of default on loans secured by any such mortgages. (July 17, 1916, c. 245, $ 30, 39 Stat. 382; Mar. 27, 1933, Ex.Or. 6084; June 16, 1933, c. 98, $ 80 (a), 48 Stat. 273.)

"Farm Credit Administration” mentioned in the text was substituted for "Federal Farm Loan Board” pursuant to the Executive Order cited thereto, which is set out in full at the beginning of this chapter. 12 U.S.C., § 972

F.F. L. Act, 8 30 Effect of insufficient protection on mortgages covering land in

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