Show the 1 federal farm lean loan act synopsis Syn opals of its salient features prepared by H M hanson secretary treasurer farm jred rm i IL mortgage bankers association of america ic a m N FEDERAL FARM LOAN ACT passed by the houe house of represents Re tives and the united state states sen at june 27 and 28 1916 respectively signed by the president Preil dent july 17 1918 1916 I 1 provides foj for a federal land bank system in the continental united states exclusive of alaska the country into land bank districts composed of hole 1 elate states 8 the system Is operated as a bu reau of lie the united elates states treasury dc pertinent part and supervised by the fed led eral fann farm loan board the secretary of thu tho treasury Is ex officio chairman ct of the board with four oilier other members appointed by the president for eight year at an annual salary of one tie member Is designated designate il farm loan commissioner and end Is the tile active execl uve officer 3 appointees of board a farm form loan registrar for each land bank dim brict and b one or more land appraisers for each land bank district salaries paid by federal land bank or joint stock land bank batik for bich they act c land bank examiners salaries isaid by the united d attorneys Attorn eje esperte ex perte assistants and other amplo employee eem to be paid by the united 17 Powers of 0 the board a to organize and charter federal land banka banks joint took stock land hunks banks and na as dional farm loan b to review and alter the rate of interest to be charged by federal land banks for loans c to approve or nget any or all loana loans for bond issue and to grant or refuse any ap pp issue sue of furm farm loan bonds of federal land banks and joint stock land banks d to regulate eulate re charges charge si for appraisal pra eui isal examining titles and re recard rd ing W t a to appraise land securing curing iw wort cages for bond isue I 1 sue eue M f to 1 e general supervisory authority over ever the ilia federal land banks term farm loan s and joint stock land banks 30 the farm loan commissioner hall shall examine the los as of every state aud and if it on the law laws of any tale state are shonn shoun to afford insufficient protection to holders its mortgages shall be declared ineligible under this act during the continuance of the laws in qui stion 12 1 he secretary of the treasury Is authorized to deposit united states state funda funds in lit federal laud finals at current gourn ment rates of interest the af or gregath of such funds not to exceed 0 at any one lime time FARM LOAN BANKS 1 organization 1 section 4 aone one in each land bani district branches permitted within its district officers president trice vice president secretary enol n treasurer director directors six representatives of farm loan associations and three represent ing the public interest Inte reet attorneys as a si al stants experts and other employees all salaries 11 fixed filed by farm loaa loan ward and paid aid by bank subject to nual by land bank exam loer liner CAPITAL STOCK sec bee 5 may be owned by firms corporation and nd the Il UnIted states and state governments ROTe 1 sec 5 ashare shares 5 3 eack t sec stock remaining 30 80 daya days after subscription books are opened shall be subscribed by the united stale states and thereafter only tho tile united states government and lorr berr onera ocra nay may acquire shares of stock hec 6 5 states government mot to participate in dividend dividends alt all other stockholders tock holders share dividends equally ally sec 5 the original capital stock shall be gradually retired after tho tile stock held by farm loan associations hall limit amount to sec bee 6 noi not leas less than 6 5 per mr cent of espItal shall be invested la in united states govenat i tit bonds POWERS rec see IS 13 to buy first farin mort gaaei within its district and to issue and sell farm arm loan bond bonds sec 13 11 to receive frera from farr oan associations interest and arno payments on and mind farm lout tout bonds sec lu 13 to acquire and anti dispose of real aid pers imil mid property necessary for lor the convenient rit transact hn of bwl bui mens and land taken in satisfaction ot debts or purchased under judgments leree or morti wort rogis gugis held by IL ahall cot not hold title ex emling five years yearl sec sm 13 to accept deposit deposits of ac eurit euricles les or current unis funds from merobe but pay bo no interest Inter it therea on reo 13 to borrow money on st curtly and pay intent thereon see bee 13 to buy and sell united bons bonea see sec IS to appeals a lands for bond ulua and nd to charge applicants and bor rowers towers tile cost of land appraisal ex dining tollef rewording re and other ie 19 letl ill tee fees gaii fi to be paid la to cseh or be made part of lon imn lo n ami and paid in amortization laments pa ments sec see 14 to accept mortgage mortgages only from farm form loan associations and op up proved agent agents sec U 14 to accept deposit deposits of cur rent funds only from its stockholders sec 0 to become financial agent agents n of f united state states government and depository tory of public money public deposit deposits cannot he be invested in mort eliges or farm loan bonds sec 13 to deposit its it securities and current funds subject to check nith ith any member bank of the federal reserve system and to receive interest thereon th breon BONDS sec see 1 20 issued in series of or more in denominations of 25 50 and 1000 sec see 20 slay may bear a maximum rate of 3 5 per cent interest per annum sec see 10 mortgages and united states government bonds equal in amount to the farm loan bondi bonds issued are retained ae as collateral security b the land bank registrar sec see U 14 the outstanding farm loan bonds shall not exceed 20 times the and surplus sec 21 shall be guaranteed by bank of issue and all other federal land I 1 banks sec 17 no issue Is authorized without the approval app of the farm loan board set se 22 substitution of mortgages and united states government bonds held a collateral to farm loan bonds Is permitted TAXATION sec see 2 20 26 the capital stock orr vr plus mortgages mori gilges and farm loan bonds and all income derived are exempt from federal state munica municipal pal and am local taxation sec see 20 keal iteal property taken and held under the of sections 11 and anti 13 Is not tax exempt AGENTS sec 15 13 incorporated banks i trust compart companies leq mortgage companies or chartered savings institutions may act as gents agents for federal land banks if no farm loan lonn association has been formed it in a given locality after one year sec see 15 flor rowers securing loans through agents ere are required to subscribe 5 per cent of the loan to the capital of the federal land bank sec IS 15 agents are entitled to a commission of one half of I 1 per cent per annum on unpaid principal of each loan they and the bank shall pay gent for actual ex expenses for appraising land examining titles executing em and recording the mortgage papers which aich shall be added to the face of the loan sec see 15 agents shall indorse and become untie liable for the payment of the loans fley negotiate and the aagre kate unpaid principal of such much loans shall not exceed ten tawes the agent agents capital and surplus sec IS 13 agent agents are ar required to make good any default within 30 days after notice sec see 15 all collections made shall be b remitted without charge SPECIAL provisions sec see 22 amortization and other payments constitute a trust fund to be invested aa as follows a to pay off maturing farm loan bond issues b to purchase farm loan bond bonds c to lend on first farm mortgage mortgages within the district d to buy states govern ment bonds bee bec 23 21 Iles Ile serve rv ind dividend dividen dr t no limit Is placed on dividend after a it reserve account amount has lins been built up from earnings equal to SO per cent of the capital stock and after B 5 per cent of the net oft earnings annually thereafter are added to the reserve account sec see 23 funds to be invested st prescribed by the federal fara farn loan board I 1 see 27 farm loan 1040 bonds are lawin investments tor for fiduciary and trust funds and security for all public tie deposit kec sec 2 27 fi ural reserve bank may buy and roll ell fm loan bonds sec 20 Provi provision slon it is made tor for als til solution and the appointment of a re clver 1 see c 14 no commission or charce charge bot specifically authorized in this act liall be ril or received NATIONAL FARM LOAN organization section 7 T ten farm owners delrine loans aggregating or more may form such an association sec T 7 tits its it AM affairs irs are administered AdmInIs by fire direct directors om including ice ce president and a loan committee of three serving without compensation and by a secretary treasurer with ml gal nry ary fixed flied by the tana farm loan board gal and by the association CAPITAL capiral STOCK se see 33 5 each 0 carry in a double liability 8 may be owned only by borrower borrowers who are required to subscribe ubi crib 5 per cent of their loan losa la ilk l the capital lock stock of the association which in turn subscribes subs cribei an equal amount of f stock la in the federal land bank sec see 8 shares are paid for in cash or 0 the amount may be added to the face of the loan and retired la in amortization payment payments at par in euch such case the face of the loan shall not exceed the 60 50 per cent and 20 per cent limitation sec see ai assessment 7 on shares may be levied for operating expenses if it funds ere are not otherwise other sise lee available POWERS sec see 10 to appraise land for mortgage through its loan committee of three sec see 11 to indorse and become liable for the mortgages of its shareholders sec see 11 to receive and deliver the proceeds of loans to borrowers borr owera bee 11 10 1 0 acquire and dispose of property necessary for the convenient transaction transact lou of its bult business Iness sec 11 to issue 1 certificates of deposit for not longer than one year and to pay 4 per cent interest thereon convertible into farm loan bonds at the federal land bank of its district sec see T ato to rei receive eive and transmit to the federal land bank payments of interest nod and principal and amortization unionization paa a menu LOANS sec 12 loans shall be secured by first mortgages on 00 land libla its it land bank district r section 12 to run from 5 to 40 years with ith amortization ani with ad dit lonal ional optional prepayments prepay menta after five years bee ee 12 1 interest on loans shall not exceed 6 per cent per annum on the unpaid principal sec 12 borrowers shall pay 8 per cent simple interest on defaulted payments bee 12 loans may be made for the fol following loNIng ica and und for no other under penalty a to purchase land for agricultural purposes b to purchase equipment fertilizer and live stock for the operation of the mortgaged farm c to provide buildings and for the improvement of farm lands d to pay debts existing at time of organization of the first bonal a farm loan association within athin the county sec see 12 1 maximum loan minimum loan sec see 12 iso no loan shall exceed 50 per centon cent of the value of theland the land mortgaged and 2 20 per cent of the permanent insured improvements bic 12 no loans shall be made to any person mho ho Is 1 not at the time or shortly to become engaged in the cultivation of the farm farni mortgaged note all applications for loani originate nith voth the national farm loan associations or agents and all loans are made and closed by the federal land banks this does not apply to joint stock land banks TAXATION sec see 2 20 same aa as applies to federal land bunts banks SPECIAL provisions sec bee 0 D associations may retain as commis commission slon one eighth of I 1 per cent semiannually from interest payments on the unpaid principal of loans see 0 9 associations may way borrow from federal land banks at 0 per cent annual interest Inte reet up to one fourth of its total stockholdings in said bank sm S 24 2 t reserves and dividends no limit la Is placed on dividend distributions after the reserve account built up from net earnings equals 20 per cent of the capital stock and after 2 per cent of the net earnings anti annually ua fly thereafter are added to the reserve ac count sec bee 2 an defaults must br be ade good within 30 day days after notice sec see SO Provi provision slon Is 1 made for dis solution and the aPPOInt appointment meint of a receiver JOINT S STOCK T LAND BANKS organization section id IL A private corporation subject to the requirements under this thi act which may be formed by ten or nore more persons ith a board of directors director 4 of ot five or more sec bee 1 IL may operate within the a state tate in which its principal office in I 1 located and some one ous state sec see 28 subject to semiannual ex laminations ami nations by trie the federal land bank examiner CAPITAL STOCK sec SM 16 minimum sec 16 Double II liability AbIlItY of shareholders sec 10 16 the united states govern ment shall own cone none of the shares of or stock sec ac no farm lonn loan bonds can be Is aed until the capital stock la Is fully paid although the bank may begin bui ine 1 a when hen one halt half of the tile capital Is and paid in cah cabb POWERS see SM 10 to lend mouty on farm mortgage security sec IC 10 10 lo issue and sell 11 farm loan loon bonds bee 26 to issue farm loan bonds up to I 1 times the amount of its capita tat and surplus sec see IM 10 except cs otherwise provided it has be the p miers of and Is subject to the restrict restrictions lons linio sed on federal iceal land banks flanks privileges sec IL MAY lend more than 10 aw to any one borrower but not beyond 60 per ar cent of the value of he the land and 20 per cent of the permanent in improvements sc sec are axe dot not restricted to the purposes ees for introna farm loaa loan sec 11 ll 10 loane loans may be road made to t farm owners regardless of anther wn wl ther encased engaged to in cultivation of the land mortgaged or not sec 16 ID interest terest on loans hall shall not exceed more than I 1 per cent the interest rate established for its last eerie series of bonds nor more than a 0 per cent in any case sec see id 10 commissions Commiss lons or other charges not specifically authorized by this at shall not be demun demanded ded or re calved 11 0 BONDS 01 1 14 0 S sec see 20 issued tn in series of or more in denominations of 25 50 and 1000 sec see 20 2 may ilay bear maximum rate of aper 5 per cent interest per annum bee 10 ilonis hall shall be so 0 o engraved as to be readily distinguishable from federal land bank bonds sec bee 19 10 mortgages and united states government bonds equal 1 i amount to the farm loan bonds issued are retained as collateral se arity by the land bank registrar sec see 17 no issue Is authorized without fill the approval of the farm loan board sec see at federal reserve banks are authorized to buy and sell the bonds of joint stock land banks sec see 22 substitution of mortgages and united states government bonds held as collateral to farm loan bonds Is permitted sec see 27 its bonds are lawful investment investments tor for fiduciary and trust funds and security for all public deposits TAXATION sec see 20 the capital stock surplus and earnings ore are subject to the taxing powers of the state sec see 2 20 26 its ita mortgages executed under this act and its farm loan bonds and all income derived are exempt from federal state and municipal and local taxation sec see 21 26 real property taken and held under the provisions of sections 11 and 13 Is 13 not tax exempt SPECIAL provisions sec C L joint stock land banks are made public depositories and financial agents of the united states government sec see 0 6 put lie deposits cannot be invested in farm form |