Purposes for extensions of credit

  1. Law
  2. USC 12
  3. Banks And Banking
  4. FARM CREDIT SYSTEM
  5. FARM CREDIT BANKS
  6. Purposes for extensions of credit

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§2019. Purposes for extensions of credit

(a) Agricultural or aquatic purposes

(1) In general

Loans made by a Farm Credit Bank to farmers, ranchers, and producers or harvesters of aquatic products may be for any agricultural or aquatic purpose and other credit needs of the applicant, including financing for basic processing and marketing directly related to the applicant's operations and those of other eligible farmers, ranchers, and producers or harvesters of aquatic products, except that the operations of the applicant shall supply some portion of the total processing or marketing for which financing is extended.

(2) Limitation on loans for basic processing and marketing operations

The aggregate of the financing provided by any Farm Credit Bank for basic processing and marketing directly related to the operations of farmers, ranchers, and producers or harvesters of aquatic products, if the operations of the applicant supply less than 20 percent of the total processing or marketing for which financing is extended, shall not exceed 15 percent of the total of all outstanding loans of such bank.

(b) Rural housing financing

(1) In general

Loans and discounts may be made to rural residents for rural housing financing under regulations of the Farm Credit Administration.

(2) Limitations

Rural housing financed under this subchapter shall be for single-family, moderate-priced dwellings and their appurtenances not inconsistent with the general quality and standards of housing existing in, or planned or recommended for, the rural area where it is located, except that a Farm Credit Bank may not at any one time have a total amount of loans outstanding for such rural housing to persons other than farmers or ranchers in amounts exceeding 15 percent of the total of all loans outstanding in such bank.

(3) Rural areas

For rural housing purposes under this section the term "rural areas" shall not be defined to include any city or village having a population in excess of 2,500 inhabitants.

(c) Farm-related services

(1) In general

Loans to persons furnishing farm-related services to farmers and ranchers directly related to their on-farm operating needs may be made for the necessary capital structures and equipment and initial working capital for such services.

(2) Facilities

The banks may own and lease, or lease with option to purchase, to persons eligible for credit under this subchapter or subchapter II, equipment or facilities needed in the operations of such persons.

(Pub. L. 92–181, title I, §1.11, as added Pub. L. 100–233, title IV, §401, Jan. 6, 1988, 101 Stat. 1627 ; amended Pub. L. 100–399, title IV, §401(j), Aug. 17, 1988, 102 Stat. 996 ; Pub. L. 101–624, title XVIII, §1832(a), Nov. 28, 1990, 104 Stat. 3832 ; Pub. L. 102–237, title V, §502(a), Dec. 13, 1991, 105 Stat. 1868 .)

Prior Provisions

A prior section 2019, Pub. L. 92–181, title I, §1.11, Dec. 10, 1971, 85 Stat. 586 ; Pub. L. 96–592, title I, §108, Dec. 24, 1980, 94 Stat. 3438 , related to services related to borrower's operations, prior to the general amendment of this subchapter by Pub. L. 100–233, §401.

Amendments

1991-Subsec. (a). Pub. L. 102–237 made technical amendments to headings of subsec. (a) and pars. (1) and (2).

1990-Subsec. (a). Pub. L. 101–624 designated existing provisions as par. (1), inserted heading, substituted "some portion" for "at least 20 percent, or such larger percent as may be required by the board of directors of the bank under regulations of the Farm Credit Administration,", and added par. (2).

1988-Subsec. (c)(2). Pub. L. 100–399 substituted "this subchapter or subchapter II, equipment or facilities" for "this subchapter, facilities".

Effective Date of 1991 Amendment

Amendment by Pub. L. 102–237 effective as if included in the provision of the Food, Agriculture, Conservation, and Trade Act of 1990, Pub. L. 101–624, to which the amendment relates, see section 1101(b)(4) of Pub. L. 102–237, set out as a note under section 1421 of Title 7, Agriculture.

Effective Date of 1988 Amendment

Amendment by Pub. L. 100–399 effective immediately after amendment made by section 401 of Pub. L. 100–233, which was effective 6 months after Jan. 6, 1988, see section 1001(b) of Pub. L. 100–399, set out as a note under section 2002 of this title.

Effective Date

Pub. L. 100–233, title IV, §401, Jan. 6, 1988, 101 Stat. 1622 , provided that this section is effective 6 months after Jan. 6, 1988.


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