---
kind: "section"
citation: "12 U.S.C. § 2127"
title: "12"
title_heading: "Banks and Banking"
number: "2127"
heading: "Guaranty fund subscriptions in lieu of stock"
release: "119-102"
url: "https://uscodex.org/usc/12/2127"
units:
  - "Chapter 23 — Farm Credit System"
  - "Subchapter III — Banks for Cooperatives"
  - "Part A — Banks for Cooperatives"
---

# §2127. Guaranty fund subscriptions in lieu of stock


If any cooperative [association](/usc/12/1828.md?p=s-4-E-i) is not authorized under the laws of the [State](/usc/12/1707.md?p=d) in which it is organized to take and hold stock in a [bank](/usc/12/1426a.md?p=g-1) for cooperatives, the [bank](/usc/12/1426a.md?p=g-1) shall, in lieu of any requirement for stock purchase, require the [association](/usc/12/1828.md?p=s-4-E-i) to pay into or have on [deposit](/usc/12/5301.md?p=18-A) in a guaranty [fund](/usc/12/4702.md?p=10), or the [bank](/usc/12/1426a.md?p=g-1) may retain out of the amount of the loan and [credit](/usc/12/5481.md?p=7) to the guaranty [fund](/usc/12/4702.md?p=10) account of the borrower, a sum equal to the amount of stock which the [association](/usc/12/1828.md?p=s-4-E-i) would otherwise be required to own. Each reference to stock of the [banks](/usc/12/221a.md?p=a) for cooperatives in this chapter shall include such guaranty [fund](/usc/12/4702.md?p=10) equivalents. The holder of the guaranty [fund](/usc/12/4702.md?p=10) equivalent and the [bank](/usc/12/1426a.md?p=g-1) shall each be entitled to the same rights and obligations with respect thereto as the rights and obligations associated with the class or classes of stock involved.


## Source credit

(Pub. L. 92–181, title III, § 3.6, Dec. 10, 1971, 85 Stat. 604.)