---
kind: "section"
citation: "12 U.S.C. § 2279aa–4"
title: "12"
title_heading: "Banks and Banking"
number: "2279aa–4"
heading: "Stock issuance"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/2279aa-4"
units:
  - "Chapter 23 — Farm Credit System"
  - "Subchapter VIII — Agricultural Mortgage Secondary Market"
  - "Part A — Establishment and Activities of Federal Agricultural Mortgage Corporation"
---

# §2279aa–4. Stock issuance

- (a) **Voting common stock—**
  - (1) **Issue—**
    - (A) **In general—** The [Corporation](/usc/12/2279aa.md?p=4) shall issue voting common stock having such par value as may be fixed by the [Board](/usc/12/2279aa.md?p=2) from time to time.
    - (B) **Number of votes—** Each share of voting common stock shall be entitled to one vote with rights of cumulative voting at all elections of [directors](/usc/12/2279bb.md?p=3).
    - (C) **Offers—**
      - (i) **In general—** The [Board](/usc/12/2279aa.md?p=2) shall offer the voting common stock to banks, other financial [institutions](/usc/12/2271.md?p=3), insurance companies, and [System institutions](/usc/12/2271.md?p=3) under such terms and conditions as the [Board](/usc/12/2279aa.md?p=2) may adopt.
      - (ii) **Requirements—** The voting common stock shall be fairly and broadly offered to ensure that—
        - (I) no [institution](/usc/12/2271.md?p=3) or [institutions](/usc/12/2271.md?p=3) acquire a disproportionate share of the total quantity of the voting common stock outstanding of a class of stock; and
        - (II) capital contributions and issuances of voting common stock for the contributions are fairly distributed between entities eligible to hold class A stock and class B stock.
    - (D) **Classes of stock—**
      - (i) **In general—** The stock shall be divided into two classes with the same par value per share.
      - (ii) **Class A stock—** Class A stock may be held only by entities that are not Farm [Credit](/usc/12/5481.md?p=7) [System institutions](/usc/12/2271.md?p=3) and that are entitled to vote for [directors](/usc/12/2279bb.md?p=3) specified in [section 2279aa–2(a)(2)(A) of this title](/usc/12/2279aa–2.md?p=a-2-A), including national banking associations (which shall be allowed to purchase and hold such stock).
      - (iii) **Class B stock—** Class B stock may be held only by Farm [Credit](/usc/12/5481.md?p=7) [System institutions](/usc/12/2271.md?p=3) that are entitled to vote for [directors](/usc/12/2279bb.md?p=3) specified in [section 2279aa–2(a)(2)(B) of this title](/usc/12/2279aa–2.md?p=a-2-B).
  - (2) **Limitation on issue—** After the date the permanent [board](/usc/12/2279aa.md?p=2) first meets with a quorum of its members present, voting common stock of the [Corporation](/usc/12/2279aa.md?p=4) may be issued only to [originators](/usc/12/2279aa.md?p=6) and [certified facilities](/usc/12/2279aa.md?p=3).
  - (3) **Authority of Board to establish terms and procedures—** The [Board](/usc/12/2279aa.md?p=2) shall adopt such terms, conditions, and procedures with regard to the issue of stock under this section as may be necessary, including the establishment of a maximum amount limitation on the number of shares of voting common stock that may be outstanding at any time.
  - (4) **Transferability—** Subject to such limitations as the [Board](/usc/12/2279aa.md?p=2) may impose, any share of any class of voting common stock issued under this section shall be transferable among the [institutions](/usc/12/2271.md?p=3) or entities to which shares of such class of common stock may be offered under [paragraph (1)](#a-1), except that, as to the [Corporation](/usc/12/2279aa.md?p=4), such shares shall be transferable only on the books of the [Corporation](/usc/12/2279aa.md?p=4).
  - (5) **Maximum number of shares—** No stockholder, other than a holder of class B stock, may own, directly or indirectly, more than 33 percent of the outstanding shares of such class of the voting common stock of the [Corporation](/usc/12/2279aa.md?p=4).
- (b) **Required capital contributions—**
  - (1) **In general—** The [Corporation](/usc/12/2279aa.md?p=4) may require each [originator](/usc/12/2279aa.md?p=6) and each [certified facility](/usc/12/2279aa.md?p=3) to make, or commit to make, such nonrefundable capital contributions to the [Corporation](/usc/12/2279aa.md?p=4) as are reasonable and necessary to meet the administrative expenses of the [Corporation](/usc/12/2279aa.md?p=4).
  - (2) **Stock issued as consideration for contribution—** The [Corporation](/usc/12/2279aa.md?p=4), from time to time, shall issue to each [originator](/usc/12/2279aa.md?p=6) or [certified facility](/usc/12/2279aa.md?p=3) voting common stock evidencing any capital contributions made pursuant to this subsection.
- (c) **Dividends—**
  - (1) **In general—** Such dividends as may be declared by the [Board](/usc/12/2279aa.md?p=2), in the discretion of the [Board](/usc/12/2279aa.md?p=2), shall be paid by the [Corporation](/usc/12/2279aa.md?p=4) to the holders of the voting common stock of the [Corporation](/usc/12/2279aa.md?p=4) pro rata based on the total number of shares of both classes of stock outstanding.
  - (2) **Reserves requirement—** No dividend may be declared or paid by the [Board](/usc/12/2279aa.md?p=2) under this section unless the [Board](/usc/12/2279aa.md?p=2) determines that adequate provision has been made for the reserve required under [section 2279aa–10(c)(1) of this title](/usc/12/2279aa–10.md?p=c-1).
  - (3) **Dividends prohibited while obligations are outstanding—** No dividend may be declared or paid by the [Board](/usc/12/2279aa.md?p=2) under this section while any obligation issued by the [Corporation](/usc/12/2279aa.md?p=4) to the [Secretary](/usc/12/1715z–22a.md?p=4) of the Treasury under [section 2279aa–13 of this title](/usc/12/2279aa–13.md) remains outstanding.
- (d) **Nonvoting common stock—** The [Corporation](/usc/12/2279aa.md?p=4) is authorized to issue nonvoting common stock having such par value as may be fixed by the [Board](/usc/12/2279aa.md?p=2) from time to time. Such nonvoting common stock shall be freely transferable, except that, as to the [Corporation](/usc/12/2279aa.md?p=4), such stock shall be transferable only on the books of the [Corporation](/usc/12/2279aa.md?p=4). Such dividends as may be declared by the [Board](/usc/12/2279aa.md?p=2), in the discretion of the [Board](/usc/12/2279aa.md?p=2), may be paid by the [Corporation](/usc/12/2279aa.md?p=4) to the holders of the nonvoting common stock of the [Corporation](/usc/12/2279aa.md?p=4), subject to paragraphs [(2)](#c-2) and [(3)](#c-3) of subsection (c).
- (e) **Preferred stock—**
  - (1) **Authority of Board—** The [Corporation](/usc/12/2279aa.md?p=4) is authorized to issue nonvoting preferred stock having such par value as may be fixed by the [Board](/usc/12/2279aa.md?p=2) from time to time. Such preferred stock issued shall be freely transferable, except that, as to the [Corporation](/usc/12/2279aa.md?p=4), such stock shall be transferred only on the books of the [Corporation](/usc/12/2279aa.md?p=4).
  - (2) **Rights of preferred stock—** Subject to paragraphs [(2)](#c-2) and [(3)](#c-3) of subsection (c), the holders of the preferred stock shall be entitled to such rate of cumulative dividends, and such holders shall be subject to such redemption or other conversion provisions, as may be provided for at the time of issuance. No dividends shall be payable on any share of common stock at any time when any dividend is due on any share of preferred stock and has not been paid.
  - (3) **Preference on termination of business—** In the event of any liquidation, dissolution, or winding up of the business of the [Corporation](/usc/12/2279aa.md?p=4), the holders of the preferred shares of stock shall be paid in full at the par value thereof, plus all accrued dividends, before the holders of the common shares receive any payment.

## Source credit

(Pub. L. 92–181, title VIII, § 8.4, as added Pub. L. 100–233, title VII, § 702, Jan. 6, 1988, 101 Stat. 1692; amended Pub. L. 100–399, title VI, § 601(d), (e), Aug. 17, 1988, 102 Stat. 1005; Pub. L. 115–334, title V, § 5411(44), Dec. 20, 2018, 132 Stat. 4684.)

## Notes

### Editorial Notes

### Amendments

2018—Subsec. (a)(1). Pub. L. 115–334, within existing provisions, designated first and second sentences as subpars. (A) and (B), respectively, added subpar. (C) and struck out former third sentence which read “Voting shall be by classes as described in section 2279aa–2(a)(9) of this title.”, designated fourth to sixth sentences collectively as subpar. (D) and individually as cls. (i) to (iii), respectively, thereof, substituted “2279aa–2(a)(2)(A)” for “2279aa–2(b)(2)(A)” in subpar. (D)(ii) and “2279aa–2(a)(2)(B)” for “2279aa–2(b)(2)(B)” in subpar. (D)(iii), and inserted subpar. and cl. headings.

1988—Subsec. (a)(1). Pub. L. 100–399, § 601(d), in penultimate sentence, inserted “and” after “institutions” and inserted “, including national banking associations (which shall be allowed to purchase and hold such stock)” before period at end.

Subsec. (e)(1). Pub. L. 100–399, § 601(e), substituted “books of the Corporation” for “books of the Association”.

### Statutory Notes and Related Subsidiaries

### Effective Date of 1988 Amendment

Amendment by Pub. L. 100–399 effective as if enacted immediately after enactment of Pub. L. 100–233, which was approved Jan. 6, 1988, see section 1001(a) of Pub. L. 100–399, set out as a note under section 2002 of this title.