§ 1402. Limitations on loans; financial structure of corporation, approval

(a) Limitation on loans to individual stockholders

No loans shall be made to individual stockholders on the capital stock of, or to create or increase the capital stock of such corporation, company, or organization in an amount in excess of 75 per centum of the par value of the capital stock of such corporation, company, or organization owned by or proposed to be subscribed to by such individual.

(b) Approval of financial structure of corporation by Governor of Farm Credit Administration

No loan shall be made upon the capital stock of any corporation until the Governor of the Farm Credit Administration shall find that the financial structure of such corporation is sound and unimpaired and by him approved, nor shall any loan be made upon the capital stock of such corporation until the management of such company shall be made known to and approved by the Governor, and the Governor shall have the right at any time to declare the indebtedness to the Government that may be created hereunder due whenever in his judgment the financial structure of the corporation shall become so impaired or the management become so unsatisfactory as to jeopardize the interests of the Government.

(Mar. 3, 1932, ch. 70, § 2, 47 Stat. 60; Ex. Ord. No. 6084, Mar. 27, 1933.)

Transfer Of Functions

Transfer of Functions

Establishment of Farm Credit Administration as an independent agency, composition of Farm Credit Administration, appointment of Governor of Farm Credit Administration, and duties thereof, including duty to perform functions, etc., of Farm Credit Administration, see section 2241 et seq. of this title.

“Governor of the Farm Credit Administration” and “Governor” substituted for “Secretary of Agriculture” and “Secretary”, respectively, and other changes were effected by Ex. Ord. No. 6084, which is set out preceding section 2241 of this title.