106 STAT. 4130 PUBLIC LAW 102-552—OCT. 28, 1992

SEC. 602. RISK MANAGEMENT PARTICIPATION AUTHORITY.

Section 3.1(11) (12 U.S.C. 2122(11)) is amended—

(1) by inserting W after "(11)"; and

(2) by adding at the end the following new subparagraph:
"(BXi) Participate in any loan of a type otherwise authorized

under this title that is made to a similar entity by any institution
in the business of extending credit, including purchases of participa-
tions in loans to finance international trade transactions involving
the sale of agricultural commodities or the products thereof, except
that—

"(I) a bank for cooperatives may not participate in a loan—
"(aa) if the participation would cause the total amount
of all loan participations by the bank under this subpara-
graph involving a single credit risk to exceed 10 percent
of the bank's total capital; or

"(bb) if the participation by the bank will itself eoual
or exceed 50 percent of the principal of the loan or, wnen
taken together with participations in the loan by the other
banks for cooperatives under this subparagraph, will cause
the cumulative amount of the participations by all banks
for cooperatives in the loan to equal or exceed 50 percent
of the principal of the loan;

"(II) a bank for cooperatives may not participate in a loan
to a similar entity under this subparagraph if the similar
entity has a loan or loan commitment outstanding with a Farm
Credit Bank or an association chartered under this Act, unless
agreed to by the Bank or association- and

"(III) the cumulative amount of participations that a bank
for cooperatives may have outstanding under this subparagraph
at any time may not exceed 15 percent of the bank's total
assets.

"(ii) As used hi this subparagraph, the term 'similar entity
means an entity that, while not eligible for a loan under section
3.8, is functionally similar to an entity eligible for a loan under
section 3.8 in that it derives a majority of its income from, or
has a majority of its assets invested in, the conduct of activities
functionally similar to those conducted by the entity.

"(in) With respect to similar entities that are eligible to borrow
from a Farm Credit Bank or association under title I or II, the
authority of a bank for cooperatives to participate in loans to
the entities under this subparagraph shall be subject to the prior
approval of the Farm Credit Bank or Banks in whose chartered
territory the entity is eligible to borrow. The approval majr be
granted on an annual basis and under such terms and conditions
as may be agreed on between the bank for cooperatives and the
Farm Credit Bank or Banks that serve the territory.".

SEC. SOS. EQUITY VOTING FOR ONE DIRECTOR OF EACH RANK FOR
COOPERATIVES.

Section 3.2(a) of the Farm Credit Act of 1971 (12 U.S.C. 2123(a))
is amended—

(1) by inserting "(1)" after "(a)"; and

(2) by adding at the end the following new paragraph:
"(2XA) If approved by the stockholders through a bylaw amend-
ment, the nomination and election of one member from a bank
for cooperatives (other than the National Bank for Cooperatives)
shall be carried out with each voting stockholder of a bank for