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``(2) Working capital from farm credit banks.--A Farm Credit
bank may loan funds to the conservator or receiver for a loan
authorized under paragraph (1) or, in the event of receivership,
a Farm Credit bank may purchase assets of the Corporation.
``(g) Agreements Against Interests of Conservator or Receiver.--No
agreement that tends to diminish or defeat the right, title, or interest
of the conservator or receiver for the Corporation in any asset acquired
by the conservator or receiver as conservator or receiver for the
Corporation shall be valid against the conservator or receiver unless
the agreement--
``(1) is in writing;
``(2) is executed by the Corporation and any person claiming
an adverse interest under the agreement, including the obligor,
contemporaneously with the acquisition of the asset by the
Corporation;
``(3) is approved by the Board or an appropriate committee
of the Board, which approval shall be reflected in the minutes
of the Board or committee; and
``(4) has been, continuously, from the time of the
agreement's execution, an official record of the Corporation.
``(h) Report to the Congress.--On a determination by the receiver
for the Corporation that there are insufficient assets of the
receivership to pay all valid claims against the receivership, the
receiver shall submit to the Secretary of the Treasury, the Committee on
Agriculture of the House of Representatives, and the Committee on
Agriculture, Nutrition, and Forestry of the Senate a report on the
financial condition of the receivership.
``(i) Termination of Authorities.--
``(1) Corporation.--The charter of the Corporation shall be
canceled, and the authority provided to the Corporation by this
title shall terminate, on such date as the Farm Credit
Administration Board determines is appropriate following the
placement of the Corporation in receivership, but not later than
the conclusion of the receivership and discharge of the
receiver.
``(2) <<NOTE: Government organization.>> Oversight.--The
Office of Secondary Market Oversight established under section
8.11 shall be abolished, and section 8.11(a) and subtitle B
shall have no force or effect, on such date as the Farm Credit
Administration Board determines is appropriate following the
placement of the Corporation in receivership, but not later than
the conclusion of the receivership and discharge of the
receiver.''.
[[Page 110 STAT. 172]]
TITLE II--REGULATORY RELIEF
SEC. 201. COMPENSATION OF ASSOCIATION PERSONNEL.
Section 1.5(13) of the Farm Credit Act of 1971 (12 U.S.C. 2013(13))
is amended by striking ``, and the appointment and compensation of the
chief executive officer thereof,''.
SEC. 202. USE OF PRIVATE MORTGAGE INSURANCE.
(a) In General.--Section 1.10(a)(1) of the Farm Credit Act of 1971
(12 U.S.C. 2018(a)(1)) is amended by adding at the end the following:
``(D) Private mortgage insurance.--A loan on which
private mortgage insurance is obtained may exceed 85
percent of the appraised value of the real estate
security to the extent that the loan amount in excess of
such 85 percent is covered by the insurance.''.
(b) Conforming Amendment.--Section 1.10(a)(1)(A) of the Farm Credit
Act of 1971 (12 U.S.C. 2018(a)(1)(A)) is amended by striking
``paragraphs (2) and (3)'' and inserting ``subparagraphs (C) and (D)''.
SEC. 203. REMOVAL OF CERTAIN BORROWER REPORTING REQUIREMENT.
Section 1.10(a) of the Farm Credit Act of 1971 (12 U.S.C. 2018(a))
is amended by striking paragraph (5).
SEC. 204. REFORM OF REGULATORY LIMITATIONS ON DIVIDEND, MEMBER BUSINESS,
AND VOTING PRACTICES OF ELIGIBLE FARMER-OWNED COOPERATIVES.
(a) In General.--Section 3.8(a) of the Farm Credit Act of 1971 (12
U.S.C. 2129(a)) is amended by adding at the end the following: ``Any
such association that has received a loan from a bank for cooperatives
shall, without regard to the requirements of paragraphs (1) through (4),
continue to be eligible for so long as more than 50 percent (or such
higher percentage as is established by the bank board) of the voting
control of the association is held by farmers, producers or harvesters
of aquatic products, or eligible cooperative associations.''.
(b) Conforming Amendment.--Section 3.8(b)(1)(D) of the Farm Credit
Act of 1971 (12 U.S.C. 2129(b)(1)(D)) is amended by striking ``and (4)
of subsection (a)'' and inserting ``and (4), or under the last sentence,
of subsection (a)''.
SEC. 205. REMOVAL OF FEDERAL GOVERNMENT CERTIFICATION REQUIREMENT FOR
CERTAIN PRIVATE SECTOR FINANCINGS.
Section 3.8(b)(1)(A) of the Farm Credit Act of 1971 (12 U.S.C.
2129(b)(1)(A)) is amended--
(1) by striking ``have been certified by the Administrator
of the Rural Electrification Administration to be eligible for
such'' and inserting ``are eligible under the Rural
Electrification Act of 1936 (7 U.S.C. 901 et seq.) for''; and
(2) by striking ``loan guarantee, and'' and inserting ``loan
guarantee from the Administration or the Bank (or a successor of
the Administration or the Bank), and''.
[[Page 110 STAT. 173]]
SEC. 206. BORROWER STOCK.
Section 4.3A of the Farm Credit Act of 1971 (12 U.S.C. 2154a) is
amended--
(1) by redesignating subsections (f) and (g) as subsections
(g) and (h), respectively; and
(2) by inserting after subsection (e) the following:
``(f) Loans Designated for Sale or Sold Into the Secondary Market.--
``(1) In general.--Subject to paragraph (2) and
notwithstanding any other provision of this section, the bylaws
adopted by a bank or association under subsection (b) may
provide--
``(A) in the case of a loan made on or after the
date of enactment of this paragraph that is designated,
at the time the loan is made, for sale into a secondary
market, that no voting stock or participation
certificate purchase requirement shall apply to the
borrower for the loan; and
``(B) in the case of a loan made before the date of
enactment of this paragraph that is sold into a
secondary market, that all outstanding voting stock or
participation certificates held by the borrower with
respect to the loan shall, subject to subsection (d)(1),
be retired.
``(2) Applicability.--Notwithstanding any other provision of
this section, in the case of a loan sold to a secondary market
under title VIII, paragraph (1) shall apply regardless of
whether the bank or association retains a subordinated
participation interest in a loan or pool of loans or contributes
to a cash reserve.
``(3) Exception.--
``(A) In general.--Subject to subparagraph (B) and
notwithstanding any other provision of this section, if
a loan designated for sale under paragraph (1)(A) is not
sold into a secondary market during the 180-day period
that begins on the date of the designation, the voting
stock or participation certificate purchase requirement
that would otherwise apply to the loan in the absence of
a bylaw provision described in paragraph (1)(A) shall be
effective.
``(B) Retirement.--The bylaws adopted by a bank or
association under subsection (b) may provide that if a
loan described in subparagraph (A) is sold into a
secondary market after the end of the 180-day period
described in the subparagraph, all outstanding voting
stock or participation certificates held by the borrower
with respect to the loan shall, subject to subsection
(d)(1), be retired.''.
SEC. 207. DISCLOSURE RELATING TO ADJUSTABLE RATE LOANS.
Section 4.13(a)(4) of the Farm Credit Act of 1971 (12 U.S.C.
2199(a)(4)) is amended by inserting before the semicolon at the end the
following: ``, and notice to the borrower of a change in the interest
rate applicable to the loan of the borrower may be made within a
reasonable time after the effective date of an increase or decrease in
the interest rate''.
SEC. 208. BORROWERS' RIGHTS.
(a) Definition of Loan.--Section 4.14A(a)(5) of the Farm Credit Act
of 1971 (12 U.S.C. 2202a(a)(5)) is amended--
(1) by striking ``(5) Loan.--The'' and inserting the
following:
[[Page 110 STAT. 174]]
``(5) Loan.--
``(A) In general.--Subject to subparagraph (B),
the''; and
(2) by adding at the end the following:
``(B) Exclusion for loans designated for sale into
secondary market.--
``(i) In general.--Except as provided in
clause (ii), the term `loan' does not include a
loan made on or after the date of enactment of
this subparagraph that is designated, at the time
the loan is made, for sale into a secondary
market.
``(ii) Unsold loans.--
``(I) In general.--Except as
provided in subclause (II), if a loan
designated for sale under clause (i) is
not sold into a secondary market during
the 180-day period that begins on the
date of the designation, the provisions
of this section and sections 4.14,
4.14B, 4.14C, 4.14D, and 4.36 that would
otherwise apply to the loan in the
absence of the exclusion described in
clause (i) shall become effective with
respect to the loan.
``(II) Later sale.--If a loan
described in subclause (I) is sold into
a secondary market after the end of the
180-day period described in subclause
(I), subclause (I) shall not apply with
respect to the loan beginning on the
date of the sale.''.
(b) Borrowers' Rights for Pooled Loans.--The first sentence of
section 8.9(b) of the Farm Credit Act of 1971 (12 U.S.C. 2279aa-9(b)) is
amended by inserting ``(as defined in section 4.14A(a)(5))'' after
``application for a loan''.
SEC. 209. FORMATION OF ADMINISTRATIVE SERVICE ENTITIES.
Part E of title IV of the Farm Credit Act of 1971 is amended by
inserting after section 4.28 (12 U.S.C. 2214) the following:
``SEC. 4.28A. <<NOTE: 12 USC 2214a.>> DEFINITION OF BANK.
``In this part, the term `bank' includes each association operating
under title II.''.
SEC. 210. JOINT MANAGEMENT AGREEMENTS.
The first sentence of section 5.17(a)(2)(A) of the Farm Credit Act
of 1971 (12 U.S.C. 2252(a)(2)(A)) is amended by striking ``or management
agreements''.
SEC. 211. DISSEMINATION OF QUARTERLY REPORTS.
Section 5.17(a)(8) of the Farm Credit Act of 1971 (12 U.S.C.
2252(a)(8)) is amended by inserting after ``except that'' the following:
``the requirements of the Farm Credit Administration governing the
dissemination to stockholders of quarterly reports of System
institutions may not be more burdensome or costly than the requirements
applicable to national banks, and''.
SEC. 212. <<NOTE: 12 USC 2252 note.>> REGULATORY REVIEW.
(a) Findings.--Congress finds that--
(1) the Farm Credit Administration, in the role of the
Administration as an arms-length safety and soundness regu
[[Page 110 STAT. 175]]
lator, has made considerable progress in reducing the regulatory
burden on Farm Credit System institutions;
(2) the efforts of the Farm Credit Administration described
in paragraph (1) have resulted in cost savings for Farm Credit
System institutions; and
(3) the cost savings described in paragraph (2) ultimately
benefit the farmers, ranchers, agricultural cooperatives, and
rural residents of the United States.
(b) Continuation of Regulatory Review.--The Farm Credit
Administration shall continue the comprehensive review of regulations
governing the Farm Credit System to identify and eliminate, consistent
with law, safety, and soundness, all regulations that are unnecessary,
unduly burdensome or costly, or not based on law.
SEC. 213. EXAMINATION OF FARM CREDIT SYSTEM INSTITUTIONS.
The first sentence of section 5.19(a) of the Farm Credit Act of 1971
(12 U.S.C. 2254(a)) is amended by striking ``each year'' and inserting
``during each 18-month period''.
SEC. 214. CONSERVATORSHIPS AND RECEIVERSHIPS.
(a) Definitions.--Section 5.51 of the Farm Credit Act of 1971 (12
U.S.C. 2277a) is amended--
(1) by striking paragraph (5); and
(2) by redesignating paragraph (6) as paragraph (5).
(b) General Corporate Powers.--Section 5.58 of the Farm Credit Act
of 1971 (12 U.S.C. 2277a-7) is amended by striking paragraph (9) and
inserting the following:
``(9) Conservator or receiver.--The Corporation may act as a
conservator or receiver.''.
SEC. 215. FARM CREDIT INSURANCE FUND OPERATIONS.
(a) Adjustment of Premiums.--
(1) In general.--Section 5.55(a) of the Farm Credit Act of
1971 (12 U.S.C. 2277a-4(a)) is amended--
(A) in paragraph (1), by striking ``Until the
aggregate of amounts in the Farm Credit Insurance Fund
exceeds the secure base amount, the annual premium due
from any insured System bank for any calendar year'' and
inserting the following: ``If at the end of any calendar
year the aggregate of amounts in the Farm Credit
Insurance Fund does not exceed the secure base amount,
subject to paragraph (2), the annual premium due from
any insured System bank for the calendar year'';
(B) by redesignating paragraph (2) as paragraph (3);
and
(C) by inserting after paragraph (1) the following:
``(2) Reduced premiums.--The Corporation, in the sole
discretion of the Corporation, may reduce by a percentage
uniformly applied to all insured System banks the annual premium
due from each insured System bank during any calendar year, as
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