Capitalization bylaws.

CFR · 2024-01-01 · US · Title 12

(a) The board of directors of each System bank and association shall, pursuant to section 4.3A of the Farm Credit Act of 1971 (Act), adopt capitalization bylaws, subject to the approval of its voting shareholders, that set forth: (1) Classes of equities and the manner in which they shall be issued, transferred, converted and retired; (2) For each class of equities, a description of the class(es) of persons to whom such stock may be issued, voting rights, dividend rights and preferences, and priority upon liquidation, including rights, if any, to share in the distribution of the residual estate; (3) The number of shares and par value of equities authorized to be issued for each class of equities. However, the bylaws need not state a number or value limit for these equities: (i) Equities that are required to be purchased as a condition of obtaining a loan, lease, or related service. (ii) Non-voting stock resulting from the conversion of voting stock due to repayment of a loan. (iii) Non-voting equities that are issued to an association's funding bank in conjunction with any agreement for a transfer of capital between the association and the bank. (iv) Equities resulting from the distribution of earnings. (4) For Farm Credit Banks, agricultural credit banks (with respect to loans other than to cooperatives), and associations, the percentage or dollar amount of equity investment (which may be expressed as a range within which the board of directors may from time to time determine

official document · source cfr-2024 · id 12:§ 615.5220