§ 3014. — Capitalization.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC3014]
TITLE 12--BANKS AND BANKING
CHAPTER 31--NATIONAL CONSUMER COOPERATIVE BANK
SUBCHAPTER I--ESTABLISHMENT AND OPERATION
Sec. 3014. Capitalization
(a) Subscriptions for capital; authorization of appropriations
The capital of the Bank shall consist of capital subscribed by
borrowers from the Bank, by cooperatives eligible to become borrowers,
by organizations owned and controlled by such borrowers, by foundations,
trust or charitable funds, by public bodies, by other public or private
investors, and by the United States. There are authorized to be
appropriated not to exceed $47,000,000 for fiscal year 1982 for purposes
of purchasing class A stock.
(b) Classes of stock; general requirements respecting rights, powers,
privileges, and preferences
The capital stock of the Bank shall include class B and class C
stock and such other classes with such rights, powers, privileges, and
preferences of the separate classes as may be specified, not
inconsistent with law, in the bylaws of the Bank. Class A notes which
are held by the United States shall have first preference with respect
to assets and interest payments over all classes of stock issued by the
Bank. So long as any class A notes are outstanding, the Bank shall not
pay any dividend on any class of stock at a rate greater than the
statutory interest rate payable on class A notes. Class B and class C
stock shall be common stock with voting rights as provided for herein
and shall be issued only to eligible borrowers and organizations
controlled by such borrowers or organizations eligible to borrow, and
shall be transferable only on the books of the Bank and then only to
another eligible borrower. No holder of voting stock of the Bank shall
be entitled to more than one vote regardless of the number of shares of
stock of other classes held, except as provided in subsection (g) of
this section.
(c) Class A notes; interest payments; redemption, etc.
The holder of class A notes shall be entitled to interest at a rate
or rates determined by the Secretary of the Treasury, taking into
consideration the current average yield on outstanding marketable
obligations of the United States of comparable terms and conditions as
of the last day of the month preceding each issuance of such class A
notes to the Secretary of the Treasury, except that, until October 1,
1990, interest payments shall not exceed 25 percent of gross revenues
for the year, less necessary operating expenses including a reserve for
possible losses. From time to time, the Bank may, with the approval of
the Secretary of the Treasury and consistent with the terms of this
chapter, issue replacement class A notes upon terms and conditions to be
agreed upon by the Bank and the Secretary, bearing interest as provided
in this subsection, in substitution for those class A notes previously
issued. Any such interest payment may be deferred by the Board of
Directors with the approval of the Secretary of the Treasury, except
that any interest payment so deferred shall bear interest at a rate
equal to the rate determined pursuant to the first sentence of this
subsection. Without the approval of the Secretary of the Treasury, the
Bank shall not pay any dividend or distribution on, or make any
redemption or repurchase of, any class of stock at any time when the
deferred interest payments on class A notes shall not have been paid in
full, together with any unpaid interest on such notes. Upon any
liquidation or dissolution of the Bank, the holder of class A notes
shall be entitled to receive out of the assets of the Bank available for
distribution to its stockholders, prior to any payment to the holders of
any class of stock of the Bank, an amount not less than the aggregate
face value of all class A notes outstanding, plus all accrued and unpaid
interest payments accrued thereon to and including the date of payment
(together with all unpaid interest thereon). The class A notes shall be
redeemed and retired as soon as practicable consistent with the purposes
of this chapter (such redemption to be at a price equal to the face
value of the class A notes so redeemed plus interest payments accrued
thereon to the date of redemption), except that beginning on October 1,
1990, there shall be redeemed as a minimum with respect to each fiscal
year a number of class A notes having an aggregate face value equal to
the aggregate consideration received by the Bank for the issue of its
class B and class C stock during that fiscal year. Each such redemption
shall take place not later than ninety days after the close of each
fiscal year. All class A notes shall be redeemed by the Bank no later
than October 31, 2020.
(d) Class B stock; ownership requirements, etc.
Class B stock shall be held only by recipients of loans under
section 3015 of this title, and such borrowers shall be required to own
class B stock in an amount not less than 1 per centum of the face amount
of the loan at the time the loan is made. Such borrowers may be required
by the Bank to own additional class B or class C stock at the time the
loan is made, but not to exceed an amount equal to 10 per centum of the
face amount of the loan, or from time to time, as the Bank may
determine. Such additional stock ownership requirements may be on the
basis of the face amount of the loan, the outstanding balances, or on a
percentage of interest payable during any year or any quarter thereof,
as the Bank may determine will provide adequate capital for the
operation of the Bank and equitable ownership thereof among borrowers.
(e) Class C stock; purchase, dividends, etc.
Class C stock shall be available for purchase and shall be held only
by borrowers or by organizations eligible to borrow under section 3015
of this title or by organizations controlled by such borrowers, and
shall be entitled to dividends in the manner specified in the bylaws of
the Bank. Such dividends shall be payable only from income, and, until
all class A notes has \1\ been retired, the rate of such dividends shall
not exceed the rate of the statutory interest payment on class A notes.
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\1\ So in original. Probably should be ``have''.
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(f) Nonvoting stock of other classifications and priorities; issuance,
etc.
Nonvoting stock of other classifications and other priorities may be
issued at the discretion of the Board, to other investors, except that
so long as any class A notes are outstanding, the Board shall not
authorize or issue any class of stock, whether voting or nonvoting, that
would rank prior or equal to the class A notes as to dividends, interest
payments, or upon liquidation or dissolution.
(g) Voting requirements of bylaws
(1) The bylaws of the Bank may provide for more than one vote on the
basis of--
(A) the amount of class B stock, class C stock, or both classes
held, with such limitations as will encourage investments in class C
stock;
(B) the amount of patronage of the Bank; and
(C) number of members in the cooperative.
(2) Such bylaws shall avoid--
(A) voting control of the Bank from becoming concentrated with
the larger affluent or smaller less affluent organizations;
(B) a disproportionately larger vote in one or more of the
groups of cooperatives referred to in section 3013(d)(2)(A) of this
title; and
(C) the concentration of more than 5 per centum of the total
voting control in any one class B or class C stockholder.
(h) Acceptance by Bank of nonreturnable capital contributions
The Bank may accept nonreturnable capital contributions on which no
interest, dividend, or patronage refund shall be payable from
associations, foundations, or funds or public bodies or agencies at the
discretion of the Board.
(i) Patronage refunds
After payment of all operating expenses of the Bank, including
interest on its obligations, and after setting aside appropriate funds
for reserves for losses, for interest payments on class A notes and
dividends on class C stock and for any redemption of class A notes in
accordance with subsection (c) of this section, the Bank shall annually
set aside the remaining earnings of the Bank for patronage refunds in
the form of class B or C stock or allocated surplus in accordance with
the bylaws of the Bank. After ten years from the date of issue of any
such stock, or at such earlier time as all the Government-held stock is
retired, patronage refunds may be made in cash, or partly in stock and
partly in cash.
(Pub. L. 95-351, title I, Sec. 104, Aug. 20, 1978, 92 Stat. 503; Pub. L.
97-35, title III, Secs. 394(c)(1), 395(b)(2), 396(c), Aug. 13, 1981, 95
Stat. 436, 439; Pub. L. 101-206, Sec. 2, Dec. 7, 1989, 103 Stat. 1832.)
Amendments
1989--Subsec. (c). Pub. L. 101-206 substituted ``The holder of class
A notes shall be entitled to interest at a rate or rates determined by
the Secretary of the Treasury, taking into consideration the current
average yield on outstanding marketable obligations of the United States
of comparable terms and conditions as of the last day of the month
preceding each issuance of such class A notes to the Secretary of the
Treasury, except that, until October 1, 1990, interest payments shall
not exceed 25 percent of gross revenues for the year, less necessary
operating expenses including a reserve for possible losses. From time to
time, the Bank may, with the approval of the Secretary of the Treasury
and consistent with the terms of this chapter, issue replacement class A
notes upon terms and conditions to be agreed upon by the Bank and the
Secretary, bearing interest as provided in this subsection, in
substitution for those class A notes previously issued.'' for ``The
holder of class A notes shall be entitled to interest payments at a rate
determined by the Secretary of the Treasury taking into consideration
the average market yield, during the month preceding the close of each
fiscal year, on outstanding marketable obligations of the United States
of comparable maturity, except that until October 1, 1990, such interest
payments shall not exceed 25 per centum of gross revenues for the year
less necessary operating expenses, including a reserve for possible
losses. Such interest payments shall be payable annually into
miscellaneous receipts of the Treasury and shall be cumulative.'' and
inserted at end ``All class A notes shall be redeemed by the Bank no
later than October 31, 2020.''
1981--Subsec. (a). Pub. L. 97-35, Secs. 394(c)(1), 395(b)(2),
inserted ``by other public or private investors,'' after ``public
bodies,'' and substituted provisions authorizing appropriations for
fiscal year 1982, for provisions authorizing appropriations beginning
with the fiscal year ending Sept. 30, 1979, and authorizing use of
amounts authorized but not appropriated.
Subsec. (b). Pub. L. 97-35, Sec. 396(c)(1), substituted ``class B''
for ``class A, class B,'', and substituted provisions relating to class
A notes, for provisions relating to class A preferred stock.
Subsec. (c). Pub. L. 97-35, Sec. 396(c)(2), substituted provisions
relating to interest payments, redemption, etc., of class A notes, for
provisions relating to issuance, dividends, etc., of class A stock.
Subsec. (e). Pub. L. 97-35, Sec. 396(c)(3), substituted provisions
relating to class A notes, for provisions relating to class A stock.
Subsec. (f). Pub. L. 97-35, Sec. 396(c)(4), substituted provisions
relating to class A notes, for provisions relating to class A stock.
Subsec. (g)(2)(B). Pub. L. 97-35, Sec. 396(c)(5), substituted
``3013(d)(2)(A)'' for ``3013(c)''.
Subsec. (h). Pub. L. 97-35, Sec. 396(c)(6), struck out provision
respecting treatment of the Bank as a governmental unit within section
170(b)(1)(A)(v) of title 26.
Subsec. (i). Pub. L. 97-35, Sec. 396(c)(7), substituted provisions
relating to class A notes, for provisions relating to class A stock.
Effective Date of 1981 Amendment
Section 394(c)(2) of Pub. L. 97-35 provided that: ``The amendment
made by paragraph (1) [amending this section] shall take effect on the
day after the Final Government Equity Redemption Date [Dec. 31, 1981].''
For definition of ``Final Government Equity Redemption Date'', see
section 396(a) of Pub. L. 97-35, set out as a note under section 3012 of
this title.
Section 395(b)(3) of Pub. L. 97-35 provided that: ``The amendments
made by paragraphs (1) [amending section 3042 of this title] and (2)
[amending this section] shall take effect on October 1, 1981.''
Amendment by section 396(c) of Pub. L. 97-35 effective on the day
after the Final Government Equity Redemption Date (Dec. 31, 1981), see
section 396(i) of Pub. L. 97-35, set out as an Effective Date of 1981
Amendment note under section 3011 of this title.
Section Referred to in Other Sections
This section is referred to in sections 3011, 3019, 3026 of this
title.
