SUPERVISORY ACTIONS APPLICABLE TO LEVEL III.

“SEC. 8.37. SUPERVISORY ACTIONS APPLICABLE TO LEVEL III. “(a) Mandatory Supervisory Actions.— “(1) Capital restoration plan.— If the Corporation is classified as within level III, the Corporation shall, within the time period determined by the Director, submit to the Director a capital restoration plan and, after approval, carry out the plan. “(2) Restrictions on dividends.— “(A) Prior approval.— If the Corporation is classified as within level III, the Corporation— “(i) may not make any payment of dividends that would result in the Corporation being reclassified as within level IV; and “(ii) may make any other payment of dividends only if the Director approves the payment before the payment. “(B) Standard for Approval.— If the Corporation is classified as within level III, the Director may approve a payment of dividends by the Corporation only if the Director determines that the payment (i) will enhance the ability of the Corporation 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, or (iii) is otherwise in the public interest. “(3) Reclassification from Level III to Level IV.— The Director shall immediately reclassify the Corporation as within level IV if— “(A) the Corporation is classified as within level III; and “(B) (i) the Corporation does not submit a capital restoration plan that is approved by the Director; or “(ii) the Director determines that the Corporation has failed to make, in good faith, reasonable efforts necessary to105 STAT. 1877 comply with such a capital restoration plan and fulfill the schedule for the plan approved by the Director. “(b) Discretionary Supervisory Actions.— In addition to any other actions taken by the Director (including actions under subsection (a)), the Director may, at any time, take any of the following actions if the Corporation 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, including off-balance sheet obligations. “(2) Limitation on growth.— Limit or prohibit the growth of the assets of the Corporation or require contraction of the assets of the Corporation. “(3) Prohibition on dividends.— Prohibit the Corporation from making any payment of dividends. “(4) Acquisition Of new capital.— Require the Corporation to acquire new capital in any form and in any amount sufficient to provide for the reclassification of the Corporation as within level II. “(5) Restriction of activities.— Require the Corporation to terminate, reduce, or modify any activity that the Director determines creates excessive risk to the Corporation. “(6) Conservatorship.— Appoint a conservator for the Corporation consistent with this Act. “(c) Effective Date.— This section shall take effect on January 1, 1992.”. (c) Amendment to Section 8.3(C).— Section 8.3(c) of such Act (12 U.S.C. 2279aa–3(c)) is amended— (1) by redesignating paragraph (13) as paragraph (14); and (2) by inserting after paragraph (12) the following new paragraph: “(13) To establish, acquire, and maintain affiliates (as such term is defined in section 8.11(g)) under applicable State laws to carry out any activities that otherwise would be performed directly by the Corporation under this title.”. (d) Amendment to Section 8.6.— Section 8.6 of such Act (12 U.S.C. 2279aa–6) is amended by adding at the end the following new subsection: “(g) Purchase of Guaranteed Securities.— “(1) Purchase authority.— The Corporation (and affiliates) may purchase, hold, and sell any securities guaranteed under this section by the Corporation that represent interests in, or obligations backed by, pools of qualified loans. Securities issued under this section shall have maturities and bear rates of interest as determined by the Corporation. “(2) Issuance of debt obligations.— The Corporation (and affiliates) may issue debt obligations solely for the purpose of obtaining amounts for the purchase of any securities under paragraph (1), for the purchase of qualified loans (as defined in section 8.0(9)(B)), and for maintaining reasonable amounts for business operations (including adequate liquidity) relating to activities under this subsection. “(3) Terms and limitations.— “(A) Terms.— The obligations issued under this subsection shall have maturities and bear rates of interest as determined by the Corporation, and may be redeemable at the option of the Corporation before maturity in the manner stipulated in the obligations. 105 STAT. 1878 “(B) Requirement.— Each obligation shall clearly indicate that the obligation is not an obligation of, and is not guaranteed as to principal and interest by, the Farm Credit Administration, the United States, or any other agency or instrumentality of the United States (other than the Corporation). “(C) Authority.— The Corporation may not issue obligations pursuant to paragraph (2) under this subsection while any obligation issued by the Corporation under section 8.13(a) remains outstanding.”.