---
kind: "section"
citation: "12 U.S.C. § 2279bb–6"
title: "12"
title_heading: "Banks and Banking"
number: "2279bb–6"
heading: "Supervisory actions applicable to level III"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/2279bb-6"
units:
  - "Chapter 23 — Farm Credit System"
  - "Subchapter VIII — Agricultural Mortgage Secondary Market"
  - "Part B — Regulation of Financial Safety and Soundness of Federal Agricultural Mortgage Corporation"
---

# §2279bb–6. Supervisory actions applicable to level III

- (a) **Mandatory supervisory actions—**
  - (1) **Capital restoration plan—** If the [Corporation](/usc/12/2279aa.md?p=4) is classified as within level III, the [Corporation](/usc/12/2279aa.md?p=4) shall, within the time period determined by the [Director](/usc/12/2279bb.md?p=3), submit to the [Director](/usc/12/2279bb.md?p=3) a capital restoration plan and, after approval, carry out the plan.
  - (2) **Restrictions on dividends—**
    - (A) **Prior approval—** If the [Corporation](/usc/12/2279aa.md?p=4) is classified as within level III, the [Corporation](/usc/12/2279aa.md?p=4)—
      - (i) may not make any payment of dividends that would result in the [Corporation](/usc/12/2279aa.md?p=4) being reclassified as within level IV; and
      - (ii) may make any other payment of dividends only if the [Director](/usc/12/2279bb.md?p=3) approves the payment before the payment.
    - (B) **Standard for approval—** If the [Corporation](/usc/12/2279aa.md?p=4) is classified as within level III, the [Director](/usc/12/2279bb.md?p=3) may approve a payment of dividends by the [Corporation](/usc/12/2279aa.md?p=4) only if the [Director](/usc/12/2279bb.md?p=3) determines that the payment (i) will enhance the ability of the [Corporation](/usc/12/2279aa.md?p=4) to meet the risk-based capital level and the minimum capital level promptly, (ii) will contribute to the long-term safety and soundness of the [Corporation](/usc/12/2279aa.md?p=4), or (iii) is otherwise in the public interest.
  - (3) **Reclassification from level III to level IV—** The [Director](/usc/12/2279bb.md?p=3) shall immediately reclassify the [Corporation](/usc/12/2279aa.md?p=4) as within level IV if—
    - (A) the [Corporation](/usc/12/2279aa.md?p=4) is classified as within level III; and
    - (B)
      - (i) the [Corporation](/usc/12/2279aa.md?p=4) does not submit a capital restoration plan that is approved by the [Director](/usc/12/2279bb.md?p=3); or
      - (ii) the [Director](/usc/12/2279bb.md?p=3) determines that the [Corporation](/usc/12/2279aa.md?p=4) has failed to make, in good faith, reasonable efforts necessary to comply with such a capital restoration plan and fulfill the schedule for the plan approved by the [Director](/usc/12/2279bb.md?p=3).
- (b) **Discretionary supervisory actions—** In addition to any other actions taken by the [Director](/usc/12/2279bb.md?p=3) (including actions under [subsection (a)](#a)), the [Director](/usc/12/2279bb.md?p=3) may, at any time, take any of the following actions if the [Corporation](/usc/12/2279aa.md?p=4) is classified as within level III:
  - (1) **Limitation on increase in obligations—** Limit any increase in, or order the reduction of, any obligations of the [Corporation](/usc/12/2279aa.md?p=4), including off-balance sheet obligations.
  - (2) **Limitation on growth—** Limit or prohibit the growth of the assets of the [Corporation](/usc/12/2279aa.md?p=4) or require contraction of the assets of the [Corporation](/usc/12/2279aa.md?p=4).
  - (3) **Prohibition on dividends—** Prohibit the [Corporation](/usc/12/2279aa.md?p=4) from making any payment of dividends.
  - (4) **Acquisition of new capital—** Require the [Corporation](/usc/12/2279aa.md?p=4) to acquire new capital in any form and in any amount sufficient to provide for the reclassification of the [Corporation](/usc/12/2279aa.md?p=4) as within level II.
  - (5) **Restriction of activities—** Require the [Corporation](/usc/12/2279aa.md?p=4) to terminate, reduce, or modify any activity that the [Director](/usc/12/2279bb.md?p=3) determines creates excessive risk to the [Corporation](/usc/12/2279aa.md?p=4).
  - (6) **Conservatorship—** Appoint a conservator for the [Corporation](/usc/12/2279aa.md?p=4) consistent with this chapter.
- (c) **Effective date—** This section shall take effect on January 1, 1992.

## Source credit

(Pub. L. 92–181, title VIII, § 8.37, as added Pub. L. 102–237, title V, § 503(b)(2), Dec. 13, 1991, 105 Stat. 1876.)