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U.S. Code as of:
01/19/04
Section 1402. Limitations on loans; financial structure of corporation, approval
(a) Limitation on loans to individual stockholders
No loans shall be made to individual stockholders on the capital
stock of, or to create or increase the capital stock of such
corporation, company, or organization in an amount in excess of 75
per centum of the par value of the capital stock of such
corporation, company, or organization owned by or proposed to be
subscribed to by such individual.
(b) Approval of financial structure of corporation by Governor of
Farm Credit Administration
No loan shall be made upon the capital stock of any corporation
until the Governor of the Farm Credit Administration shall find
that the financial structure of such corporation is sound and
unimpaired and by him approved, nor shall any loan be made upon the
capital stock of such corporation until the management of such
company shall be made known to and approved by the Governor, and
the Governor shall have the right at any time to declare the
indebtedness to the Government that may be created hereunder due
whenever in his judgment the financial structure of the corporation
shall become so impaired or the management become so unsatisfactory
as to jeopardize the interests of the Government.
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