12 U.S.C. § 2155

Liability of banks; United States not liable

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(a) Joint and several liability of banks(1) Each bank of the System shall be fully liable on notes, bonds, debentures, or other obligations issued by it individually, and shall be liable for the interest payments on long-term notes, bonds, debentures, or other obligations issued by other banks operating under the same subchapter of this chapter.(2)(A) Each bank shall also be primarily liable for the portion of any issue of consolidated or System-wide obligations made on its behalf and be jointly and severally liable for the payment of any additional sums as called upon by the Farm Credit Administration in order to make payments of interest or principal which any bank primarily liable therefor shall be unable to make.(B) Such calls first shall be made on all nondefaulting banks in proportion to each such bank’s proportionate share of the aggregate available collateral held by all such banks.(C) For purposes of this paragraph, the term “available collateral” means the amount (determined at the close of the last calendar quarter ending before such call) by which a bank’s collateral as described in section 2154 of this title exceeds the collateral required to support the bank’s outstanding notes, bonds, debentures, and other similar obligations.(D) If the Farm Credit Administration makes any such call and the available collateral of all such banks does not fully satisfy the liability necessitating such calls, such calls shall be made on all nondefaulting banks in proportion to each such bank’s remaining assets.(E) Any System bank that, pursuant to a call by the Farm Credit Administration, makes a payment of principal or interest to the holder of any consolidated or System-wide obligation issued on behalf of another System bank shall be subrogated to all rights of the holder against such other bank to the extent of such payment.(F) On making such a call with respect to obligations issued on behalf of a System bank, the Farm Credit Administration shall appoint a receiver for the bank, which shall expeditiously liquidate or otherwise wind up the affairs of the bank.(b) Resolutions as to liability; execution of obligations

Each bank participating in an issue shall by appropriate resolution undertake such responsibility as provided in subsection (a), and in the case of consolidated or System-wide obligations shall authorize the execution of such long-term notes, bonds, debentures, or other obligations on its behalf. When a consolidated or System-wide issue is approved, the notes, bonds, debentures, or other obligations shall be executed and the banks shall be liable thereon as provided herein.

The United States shall not be liable or assume any liability directly or indirectly thereon.

(d) Insurance Fund called on before invoking joint and several liability

Beginning 5 years after January 6, 1988, the Farm Credit Administration shall not call on any System institution to satisfy the liability of the institution on any joint, consolidated, or System-wide obligation participated in by the institution or with respect to which the institution is primarily, or jointly and severally, liable, before the Farm Credit Insurance Fund is exhausted, even if the Fund is only able to make a partial payment because of insufficient amounts in the Fund.

(Pub. L. 92–181, title IV, § 4.4, Dec. 10, 1971, 85 Stat. 611; Pub. L. 99–205, title I, § 101(4), title II, § 205(f)(2), Dec. 23, 1985, 99 Stat. 1679, 1706; Pub. L. 100–233, title II, § 207(c), title III, § 303, Jan. 6, 1988, 101 Stat. 1608, 1620; Pub. L. 100–399, title III, § 303, Aug. 17, 1988, 102 Stat. 995.)Editorial NotesAmendments

1988—Subsec. (a). Pub. L. 100–233, § 303(a), amended subsec. (a) generally. Prior to amendment, subsec. (a) read as follows: “Each bank of the System shall be fully liable on notes, bonds, debentures, or other obligations issued by it individually, and shall be liable for the interest payments on long-term notes, bonds, debentures, or other obligations issued by other banks operating under the same subchapter of this chapter. Each bank shall also be primarily liable for the portion of any issue of consolidated or System-wide obligations made on its behalf and be jointly and severally liable for the payment of any additional sums as called upon by the Farm Credit Administration in order to make payments of interest or principal which any bank primarily liable therefor shall be unable to make. Such calls shall be made first upon the other banks operating under the same subchapter of this chapter as the defaulting bank, and second upon banks operating under other subchapters of this chapter, taking into consideration the capital, surplus, bonds, debentures, or other obligations which each may have outstanding at the time of such assessment.”

Subsec. (c). Pub. L. 100–233, § 207(c), redesignated subsec. (d) as (c), and struck out former subsec. (c) which provided that for purposes of this part, the term “bank” included the Capital Corporation.

Subsec. (d). Pub. L. 100–399 redesignated subsec. (e) as (d).

Pub. L. 100–233, § 207(c), redesignated subsec. (d) as (c).

Subsec. (e). Pub. L. 100–399 redesignated subsec. (e) as (d).

Pub. L. 100–233, § 303(b), added subsec. (e).

1985—Subsec. (b). Pub. L. 99–205, § 205(f)(2), substituted “execution of” for “Governor to execute” in first sentence and struck out “by the Governor” after “shall be executed” in second sentence.

Subsecs. (c), (d). Pub. L. 99–205, § 101(4), added subsec. (c) and redesignated former subsec. (c) as (d).

Statutory Notes and Related SubsidiariesEffective Date of 1988 Amendment

Amendment by Pub. L. 100–399 effective as if enacted immediately after enactment of Pub. L. 100–233, which was approved Jan. 6, 1988, see section 1001(a) of Pub. L. 100–399, set out as a note under section 2002 of this title.

Effective Date of 1985 Amendment

Amendment by Pub. L. 99–205 effective thirty days after Dec. 23, 1985, see section 401 of Pub. L. 99–205, set out as a note under section 2001 of this title.

Notes of Decisions

Cited in 10 cases, 1985–2001 · leading case: Colorado Springs Production Credit Ass'n v. Farm Credit Administration

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Colorado Springs Production Credit Ass'n v. Farm Credit Administration (1991) dcd · cites it 2× “Under 12 U.S.C. § 2155 (a), each System bank is jointly and severally liable on all System obligations, and effective in January 1993, the insurance fund must be exhausted before the banks are held jointly and severally liable.”

Birbeck v. Southern New England Production Credit Ass'n (1985) ctd “12 U.S.C. § 2155 . Finally, the Tucker Act explicitly states that district court jurisdiction of suits brought under the Act is limited to those involving claims seeking no more than $10,000 damages.”

First South Production Credit Assoc. v. Farm Credit Administration (1990) vaed “12 U.S.C.A. § 2155 (a). The banks provide funds obtained through the sale of these securities to the associations in their districts.”

Louisiana Federal Land Bank Ass'n, FCLA v. Farm Credit Administration (2001) dcd “, 12 U.S.C. §§ 2155 (a)(1), 2096 and 2153(c)-(d).”

Colorado Springs Production Credit Ass'n v. Farm Credit Administration (1992) cadc · cites it 2× “The financial strength of the entire System, moreover, stands behind the bonds: all intermediate farm credit banks are jointly and severally liable for the System-wide debt obligations, see 12 U.S.C. § 2155 , and all bottom-tier institutions are required to own stock in the…”

Independent Bankers Ass'n of America v. Farm Credit Administration (1997) dcd “See 12 U.S.C. § 2155 (a). On September 11,1995, the FCA published a proposed rule to amend its regulations governing the eligibility requirements for farm credit financing and the permissive scope of that financing.”

Colorado Springs Production Credit Ass'n v. Farm Credit Administration (1988) dcd “12 U.S.C. § 2155 . Even though the PCAs are not so liable, defendants contend that their fate is closely connected to the banks because of their shareholder status.”

Independent Bankers Ass'n v. National Credit Union Administration (1996) wiwd “In fact, the United States is not liable for the notes, bonds, debentures or any other obligation issued by the Farm Credit Banks, 12 U.S.C. § 2155 (c), and it appears that any judgment or settlement against a Farm Credit System institution would be paid out of the institution’s…”

FED. LAND BANK OF SPRINGFIELD v. Farm Credit Admin. (1987) mad “12 U.S.C. § 2155 . Financial assistance agreements between System members further reinforce System interdependence.”

Authority of the Federal Financing Bank to Provide Loans to the Resolution Trust Corporation (1990) olc “§ 1435 (federal home loan banks); 12 U.S.C. § 2155 (c) (Supp. Ill 1973) (federal land banks, federal intermediate credit banks, and banks for cooperatives).”

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