---
kind: "section"
citation: "12 U.S.C. § 2259"
title: "12"
title_heading: "Banks and Banking"
number: "2259"
heading: "State legislation"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/2259"
units:
  - "Chapter 23 — Farm Credit System"
  - "Subchapter V — Farm Credit Administration Organization"
  - "Part B — Farm Credit Administration Organization"
---

# §2259. State legislation


Whenever it is determined by the Farm [Credit](/usc/12/5481.md?p=7) Administration, or by judicial decision, that a [State](/usc/12/2277a.md?p=5) law is applicable to the obligations and securities authorized to be held by the [institutions](/usc/12/2271.md?p=3) of the System under this chapter, which law would provide insufficient protection or inadequate safeguards against loss in the event of default, the Farm [Credit](/usc/12/5481.md?p=7) Administration may declare such obligations or securities to be ineligible as collateral for the issuance of new notes, bonds, debentures, and other obligations under this chapter.


## Source credit

(Pub. L. 92–181, title V, § 5.24, formerly § 5.25, Dec. 10, 1971, 85 Stat. 624; renumbered § 5.24, Pub. L. 99–205, title II, § 203(b), Dec. 23, 1985, 99 Stat. 1694.)

## Notes

### Editorial Notes

### Prior Provisions

A prior section 5.24 of Pub. L. 92–181 was renumbered section 5.23 and is classified to section 2258 of this title.