---
kind: "section"
citation: "12 U.S.C. § 2279f"
title: "12"
title_heading: "Banks and Banking"
number: "2279f"
heading: "Merger of similar banks"
release: "119-102"
url: "https://uscodex.org/usc/12/2279f"
units:
  - "Chapter 23 — Farm Credit System"
  - "Subchapter VII — Restructuring of System Institutions"
  - "Part D — Mergers of Like Entities"
---

# §2279f. Merger of similar banks

- (a) **In general—** [Banks](/usc/12/221a.md?p=a) organized or operating under this chapter may merge with [banks](/usc/12/221a.md?p=a) in other [districts](/usc/12/221a.md?p=a) operating under the same subchapter if the plan of merger is approved by—
  - (1) the Farm [Credit](/usc/12/5481.md?p=7) Administration [Board](/usc/12/221a.md?p=a);
  - (2) the respective [Boards](/usc/12/221a.md?p=a) of [Directors](/usc/12/2279bb.md?p=3) of the [banks](/usc/12/221a.md?p=a) involved;
  - (3) a majority vote of the stockholders of each [bank](/usc/12/1426a.md?p=g-1) voting, in [person](/usc/12/5481.md?p=19) or by proxy, at a duly authorized stockholders’ meeting, with each [association](/usc/12/1828.md?p=s-4-E-i) having a number of votes equal to the number of such [association](/usc/12/1828.md?p=s-4-E-i)’s voting stockholders; and
  - (4) in the case of a [bank](/usc/12/1426a.md?p=g-1) for cooperatives, a majority of the total equity interests in such merging [bank](/usc/12/1426a.md?p=g-1) for cooperatives ([including](/usc/12/25b.md?p=a-3) allocated, but not unallocated, surplus and reserves) held by those stockholders or subscribers to the guaranty [fund](/usc/12/4702.md?p=10) of the [bank](/usc/12/1426a.md?p=g-1) voting.
- (b) **Powers and capitalization—** Sections [2279a–2](/usc/12/2279a–2.md) and [2279a–3](/usc/12/2279a–3.md) of this title shall apply to [banks](/usc/12/221a.md?p=a) merged under this section.
- (c) **Board of directors—**
  - (1) **In general—** After a merger under [subsection (a)](#a), a [board](/usc/12/221a.md?p=a) of [directors](/usc/12/2279bb.md?p=3) shall be created for the resulting [bank](/usc/12/1426a.md?p=g-1).
  - (2) **Composition—** The [board](/usc/12/221a.md?p=a) shall be composed of—
    - (A) two [directors](/usc/12/2279bb.md?p=3) elected by each of the [bank](/usc/12/1426a.md?p=g-1) [boards](/usc/12/221a.md?p=a), with at least one such [director](/usc/12/2279bb.md?p=3) from each [bank](/usc/12/1426a.md?p=g-1) being elected by the eligible stockholders of, or subscribers to, the guaranty [fund](/usc/12/4702.md?p=10) of the merging [banks](/usc/12/221a.md?p=a); and
    - (B) one outside [director](/usc/12/2279bb.md?p=3) elected by the [directors](/usc/12/2279bb.md?p=3) elected under [subparagraph (A)](#c-2-A).
  - (3) **Outside director—**
    - (A) **Qualifications—** The outside [director](/usc/12/2279bb.md?p=3) elected under [paragraph (2)(B)](#c-2-B) shall be experienced in financial services and [credit](/usc/12/5481.md?p=7), and within the 2-year period prior to such election, shall not have been a borrower from, shareholder in, or [director](/usc/12/2279bb.md?p=3), officer, employee, or agent of any [institution](/usc/12/2162.md?p=d-3) of the Farm [Credit](/usc/12/5481.md?p=7) System.
    - (B) **Failure to elect—** If the other [members](/usc/12/1426a.md?p=g-1) of the [board](/usc/12/221a.md?p=a) fail to elect an outside [director](/usc/12/2279bb.md?p=3), the Farm [Credit](/usc/12/5481.md?p=7) Administration [Board](/usc/12/221a.md?p=a) shall appoint a qualified [person](/usc/12/5481.md?p=19) to serve on the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/2279bb.md?p=3) until such [member](/usc/12/1426a.md?p=g-1) is so elected.
  - (4) **Bylaws—** Notwithstanding [paragraph (2)](#c-2), the bylaws of the merged [bank](/usc/12/1426a.md?p=g-1) may, with the approval of the Farm [Credit](/usc/12/5481.md?p=7) Administration, provide for a different number of [directors](/usc/12/2279bb.md?p=3) to be selected in a different manner, except that the bylaws shall provide for at least one outside [director](/usc/12/2279bb.md?p=3).

## Source credit

(Pub. L. 92–181, title VII, § 7.12, as added Pub. L. 100–233, title IV, § 416, Jan. 6, 1988, 101 Stat. 1652; amended Pub. L. 100–399, title IV, § 408(q), (r), Aug. 17, 1988, 102 Stat. 1002, 1003.)

## Notes

### Editorial Notes

### Amendments

1988—Subsec. (b). Pub. L. 100–399, § 408(q), substituted “Powers and capitalization” for “Procedures” in heading and, in amending text generally, substituted “Sections 2279a–2 and 2279a–3 of this title” for “The provisions of sections 2279a–2 through 2279a–4 of this title”.

Subsec. (c)(2)(B). Pub. L. 100–399, § 408(r), substituted “directors” for “members”.

### 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.