[Code of Federal Regulations]

[Title 12, Volume 6]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 12CFR614.4340]



[Page 125]

 

                       TITLE 12--BANKS AND BANKING

 

                 CHAPTER VI--FARM CREDIT ADMINISTRATION

 

PART 614_LOAN POLICIES AND OPERATIONS--Table of Contents

 

                    Subpart I_Loss-Sharing Agreements

 

Sec. 614.4340  General.





    (a) Upon the approval of the board of directors of the respective 

Farm Credit System institutions, any System bank, association, or 

service corporation or service association may enter into an agreement 

to share loan and other losses with any other institution(s) of the 

System. As appropriate, a loss-sharing agreement may contain provisions 

relating to definitions of terms, terms and conditions for activation, 

determinations of assessment formulas, limitations on assessments, 

reimbursements, administration, arbitration, and provisions for 

amendment and termination.

    (b) System institutions may agree among themselves to share losses 

for the purpose of protecting against the impairment of capital stock or 

participation certificates, or for any other purpose. Agreements may 

provide for sharing losses that arise in the future or that were 

recognized by one or more of the signatory institutions before the date 

of the agreement. Agreements may contain provisions that are not 

entirely reciprocal among the signatories to the agreement. Loss-sharing 

agreements can provide for the sharing of loan losses, operating losses, 

casualty losses, losses on high risk assets, or any other losses.



[49 FR 48910, Dec. 17, 1984, as amended at 54 FR 1151, Jan. 12, 1989; 54 

FR 50736, Dec. 11, 1989]



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