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§ 744a. Same; contract liability after June 16, 1933.-Notwithstanding the provisions of section 744 of this title, the shareholders of national farm-loan associations shall not be held individually responsible for any contract, debt, or engagement of such association entered into after June 16, 1933, but this section shall not be construed to relieve any other liability with respect to stock held by such shareholders. (June 16, 1933, ch. 98, § 72, 48 Stat. 271.)

$ 745. New members.—After a charter has been granted to a national farm loan association, any person who is the owner, or about to become the owner, of farm land qualified under section 771 of this chapter as the basis of a mortgage loan, and who desires to borrow on a mortgage of such farm land, may become a member of the association by a majority vote of the directors upon subscribing for one share of the capital stock of such association for each $100 of the face of his proposed loan or any major fractional part thereof. He shall at the same time file with the secretary-treasurer his application for a mortgage loan, giving the particulars required by section 771 of this chapter. As used in this section, the term “person" includes an individual, an incorporated association, and a corporation which is eligible for a loan under section 771 of this chapter. (July 17, 1916, ch. 245, § 9, 39 Stat. 368; June 3, 1935, ch, 164, § 20, 49 Stat. 319; Aug. 19, 1937, ch. 704, § 24, 50 Stat. 710.)

SAVING CLAUSE See note under section 640a of this title.

8 746. Common board of directors for two or more associations. -Any other provisions of law to the contrary notwithstanding, two or more national farm loan associations may with the approval of the Farm Credit Administration, and by an agreement not inconsistent with any rules and regulations prescribed by the said Administration, provide for a common board of directors to be elected by the shareholders of the associations that are parties to the agreement: Provided, however, that each member of any such board shall be a shareholder in an association that is a party to the agreement and shall be a bona fide resident of the territory within which such association is authorized to do business: And provided further, That no such agreement shall provide for a term of office in excess of three years for any member of such board. The number of members of the common board of directors shall be specified in the agreement and shall be five or more. The agreement may provide that any director may be elected by the shareholders of one or more of the associations which are parties to the agreement; that in the balloting for any director an association may vote at a separate meeting of its shareholders or at a joint meeting with the shareholders of any other association or associations participating in the election of the director; and that the candidate receiving the highest aggregate number of votes at such meeting or meetings shall be declared elected Whenever two or more national farm loan associations have entered into such an agreement, the members of the common board of directors provided for in the agreement shall be ex officio the members of the board of directors of each association that is a party to the agreement, any provisions of this chapter to the contrary notwithstanding. (July 17, 1916, ch. 245, § 9, as amended Aug. 19, 1937, ch. 704, $ 25 (a), 50 Stat. 710.)

REFERENCES IN TEXT In the original, “this chapter" reads "this Act,” meaning the Federal Farm Loan Act (act July 17, 1916, cited to text). For distribution of said Federal Farm Loan Act in this Code, see note under section 641 of this title.

SAVING CLAUSE See note under section 640a of this title.

§ 747. Same; transfer of powers to loan committee. Whenever a national farm loan association has entered into such an agreement, the power of approving applications for loans through the association and the power of admitting persons to membership in the association shall be vested in the loan committee of the association in lieu of being vested in its board of directors. The loan committee of any such association shall be elected annually by the shareholders of the association, instead of by its board of directors, and the shareholders shall in addition annually elect two alternates to serve as members of the loan committee at such times as regular members may be absent or disqualified. (July 17, 1916, ch. 245, § 9, as amended Aug. 19, 1937, ch. 704, § 25 (a), 50 Stat. 711.)

SAVING CLAUSE See note under section 640a of this title.

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APPRAISAL FOR FARM LOANS § 751. Investigation by loan committee of association; character and solvency of applicant; sufficiency of security offered; report.Whenever an application for a mortgage loan is made through a national farm loan association, the loan committee provided for in section 712 of this title shall forthwith make, or cause to be made, such investigation as it may deem necessary as to the character and solvency of the applicant, and the sufficiency of the security offered, and cause written report to be made of the result of such investigation, and shall, if it concurs in such report, approve the same in writing. No loan shall be made unless the report is favorable, and the loan committee is unanimous in its approval thereof. (July 17, 1916, ch. 245, § 10, 39 Stat. 369; Apr. 20, 1920, ch. 154, § 2, 41 Stat. 570.)

8 752. Submission to land bank of loan application and report of association's committee; consideration of association's appraisal by bank.—The written report required in section 751 of this title shall be submitted to the Federal land bank, together with the application for the loan, and the directors of said land bank shall examine said written report when they pass on the loan application which it accompanies, but they shall not be bound by said appraisal. (July 17, 1916, ch. 245, § 10, 39 Stat. 369; Apr. 20, 1920, ch. 154, § 2, 41 Stat. 570.)

8 753. Requirement for appraisal of land offered as security before making land bank loan.-Before any mortgage loan is made

by any Federal land bank, or joint stock land bank, it shall refer the application and written report of the loan committee to one or more of the land bank appraisers appointed under the authority of section 656 of this title, and such appraiser or appraisers shall investigate and make a written report upon the land offered as security for said loan. No such loan shall be made by said land bank unless said written report is favorable. (July 17, 1916, ch. 245, § 10, 39 Stat. 369.)

CROSS REFERENCE Joint-stock land banks forbidden to make farm loans except such as are necessary and incidental to refinancing existing loans or to sale of real estate, see section 810 of this title.

$ 754. Forms for reports.Forms for apraisal reports for farm loan associations and land banks shall be prescribed by the Farm Credit Administration. (July 17, 1916, ch. 245, $ 10, 39 Stat. 369; Ex. Ord. No. 6084, Mar. 27, 1933.)

$ 755. Examinations by land bank appraisers as to farm loan bonds and first mortgages.—Land bank appraisers shall make such examinations and appraisals and conduct such investigations, concerning farm loan bonds and first mortgages, as the Farm Credit Administration shall direct. (July 17, 1916, ch. 245, $ 10, 39 Stat. 369; Ex. Ord. No. 6084, Mar. 27, 1933.)

§ 756. Borrower ineligible as land bank appraiser; association director or committeeman disqualified by interest in loan.-No borrower under this subchapter shall be eligible as an appraiser under this subdivision, but borrowers may act as members of a loan committee in any case where they are not personally interested in the loan under consideration. When any member of a loan committee or of a board of directors is interested, directly or indirectly, in a loan, a majority of the board of directors of any national farm loan association shall appoint a substitute to act in his place in passing upon such loan. (July 17, 1916, ch. 245, $ 10, 39 Stat. 369.)

REFERENCES IN TEXT In the original “this subchapter" reads "this Act”, meaning the Federal Farm Loan Act (act July 17, 1916, cited to text). For distribution of said Federal Farm Loan Act in this Code, see note under section 641 of this title.

POWERS OF NATIONAL FARM LOAN ASSOCIATIONS

$ 761. Enumerated powers.—Every national farm loan association shall have power:

First. Indorsing mortgages. To indorse, and thereby become liable for the payment of, mortgages taken from its shareholders by the Federal land bank of its district.

Second. Receiving advances from banks and loaning to shareholders.-To receive from the Federal land bank of its district funds advanced by said land bank, and to deliver said funds to its shareholders on receipt of first mortgages qualified under section 771 of this chapter.

Third. Fixing charges for applications for loans.-To fix reasonable initial charges to be made against applicants for loans and to borrowers in order to meet the necessary expenses of the

association: Provided, That such charges shall not exceed amounts to be fixed by the Farm Credit Administration, and shall in no case exceed 1 per centum of the amount of the loan applied for; to acquire and dispose of property, real and personal, that may be necessary or convenient for the transaction of its business.

Fourth. Issuing interest-bearing certificates against deposits of current funds.To issue certificates against deposits of current funds bearing interest for not longer than one year at not to exceed 4 per centum per annum after six days from date, convertible into farm loan bonds when presented at the Federal land bank of the district in the amount of $25 or any multiple thereof. Such deposits, when received, shall be forthwith transmitted to said land bank, and be invested by it in the purchase of farm-loan bonds issued by a Federal land bank or in first mortgages as defined by this subchapter.

Fifth. Collections by one association for another. Whenever a Federal land bank shall have empowered any national farm loan association of its district to collect and pay over to said bank the dues, interest, amortization installments, and other sums payable under the terms, conditions, and covenants of the mortgages taken from its shareholders, such association may, with the approval of said bank, enter into an agreement with another association operating in the same or adjacent territory to make such collections, for and on behalf of the association thus empowered to do so, on any or all of said loans, and immediately pay the amounts so collected to said land bank. Such agreements shall be made upon such terms and conditions and for such consideration as may be approved by the Farm Credit Administration. (July 17, 1916, ch. 245, § 11, 39 Stat. 369; Apr. 20, 1920, ch. 154, § 3, 41 Stat. 570; Ex. Ord. No. 6084, Mar. 27, 1933; Aug. 19, 1937, ch. 704, § 25 (c), 50 Stat. 713.)

REFERENCES IN TEXT In the original, “this chapter" reads “this Act,” meaning the Federal Farm Loan Act (act July 17, 1916, cited to text). For distribution of said Federal Farm Loan Act in this Code, see note under section 641 of this title.

SAVING CLAUSE See note under section 640a of this title.

CROSS REFERENCE Facilities of associations available to Land Bank Commissioner in administering sections 1016-1019 of this title, see section 1018 of this title.

RESTRICTION ON LOANS OF FEDERAL LAND BANKS BASED ON

FIRST MORTGAGES § 771. Restrictions enumerated.—No farm credit district organized under this chapter shall make loans except upon the following terms and conditions:

First. Security by first mortgage.Said loans shall be secured by duly recorded first mortgages on farm land within the farm credit district in which the bank is situated.

Second. Agreement for repayment on amortization plan.Every such mortgage shall contain an agreement providing for

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the repayment of the loan on an amortization plan by means of a fixed number of annual or semi-annual installments sufficient to cover, first, a charge on the loan at a rate not exceeding the interest rate in the last series of farm-loan bonds issued by the land bank making the loan; second, a charge for administration and profits at a rate not exceeding, except with the approval of the Governor of the Farm Credit Administration, 1 per centum per annum on the unpaid principal, said two rates combined constituting the interest rate on the mortgage; and, third, such amounts to be applied on the principal as will extinguish the debt within an agreed period, not less than five years nor more than forty years: Provided, That after five years from the date upon which a loan is made the mortgagor may, upon any regular installment date, make in advance any number of payments or any portion thereof on account of the principal of his loan as provided by his contract or pay the entire principal of such loan, under the rules and regulations of the Farm Credit Administration: And provided further, That before the first issues of farm-loan bonds by any land bank the interest rate on mortgages may be determined in the discretion of said land bank, subject to the provisions and limitations of this subchapter.

Third. Maximum interest rate.—No loan on mortgage shall be made under this subchapter at a rate of interest exceeding 6 per centum per annum, exclusive of amortization payments.

Fourth. Purposes of loans enumerated. Such loans may be made for the following purposes and for no other:

(a) To provide for the purchase of land for agricultural uses.

(b) To provide for the purchase of equipment, fertilizers, and livestock necessary for the proper and reasonable operation of the mortgaged farm; the term "equipment" to be defined by the Farm Credit Administration.

(c) To provide buildings and for the improvement of farm lands; the term "improvement" to be defined by the Farm Credit Administration.

(d) To liquidate indebtedness of the owner of the land mortgaged incurred for agricultural purposes, or incurred prior to January 1, 1937.

(e) To provide the owner of the land mortgaged with funds for general agricultural uses.

Fifth. Limitation on amount of loans; appraisal; reappraisal. -No such loan shall exceed 50 per centum of the value of the land mortgaged and 20 per centum of the value of the permanent, insured improvements thereon, said value to be ascertained by appraisal, as provided in sections 751-756 of this chapter. In making said appraisal the value of the land for agricultural purposes shall be the basis of appraisal and the earning power of said land shall be a principal factor.

In making loans to owners of groves and orchards, including citrus fruit groves and other fruit groves and orchards, the Federal land banks, the farm land banks, and all Government agencies making loans upon such character of property may, in appraising the property offered as security, give a reasonable and fair valuation to the fruit trees located and growing upon said

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