(b) At the option of the bank and with the consent of the Corporation, the bank may pay out of conditional payments held for the borrower's credit on his bank indebtedness, any portion of the borrower's indebtedness to the Corporation which is secured in whole or in part by the same real property securing the indebtedness to the bank as and when the same becomes due and payable, if it is not otherwise paid by the borrower at or before maturity; in the case of indebtedness not secured by the same or common real property, the bank may make such payment with the consent of the borrower in addition to that of the Corporation. The bank shall transfer the full amount required to take up the matured indebtedness of the Corporation and no reimbursement for interest credited thereon as of prior installment dates nor as of the date of transfer shall be made to the bank by the Corporation: Provided, however, That if the indebtedness of the Corporation to which the payment is to be applied bears a higher effective rate of interest than the indebtedness on which the payments were held unapplied, then the Corporation shall allow a simple interest credit at the difference in such rates from the date(s) such payments were accepted by the bank to the date of maturity of the indebtedness upon which such payments were applied, and the bank shall transfer an amount which, together with the simple interest credit allowed by the Corporation, will take up the matured indebtedness. The first amount accepted as conditional payments by the bank shall be considered as the first amount paid out of the conditional payments either on the indebtedness to the bank or on the indebtedness of the Corporation.

(c) If at any time the total of unapplied conditional payments held for a borrower's credit on his indebtedness to both the bank and the Corporation together with the interest allowance thereon equals or exceeds the total amount of his indebtedness to the Corporation, at the discretion of the bank, upon written direction from the borrower and with the consent of the Corporation, the whole indebtedness to the Corporation may be regarded as having become due and payable at once and may be paid out of such total payments. The Corporation shall make any additional interest allowance required in accordance with paragraph (b) of this section.

§ 10.242 Disposition of unapplied conditional payments. When the balance of unapplied conditional payments held by the bank together with interest allowance thereon is reduced to $10 or less, at its option the bank may apply such balance on the borrower's indebtedness to the bank, subject to notification to the borrower of such action and reversal if he so requests. Any balance of unapplied conditional payments together with interest allowance thereon held in connection with the borrower's indebtedness shall be refunded to the borrower by the bank when the indebtedness is paid in full; Provided, however, That amounts of conditional payments held by the bank for the credit of a borrower who is indebted also to the Corporation, may, at the written direction of the borrower, be transferred to the Corporation, when the borrower's indebtedness to the bank is paid in full. Such payments transferred shall be subject to an interest allowance by the Corporation, in accordance with §§ 10.239 (a) and 10.241-50 (b).

§ 10.245 Compensation for conditional payments held. [Revoked]

§ 10.246 Rate of compensation for conditional payments held. [Revoked]

CONSOLIDATED BONDS; CALL FOR

REDEMPTION

AUTHORITY: §§ 10.530-50 and 10.530-51 issued under sec. 20, 39 Stat. 377; 12 U.S.C. 862.

SOURCE: §§ 10.530-50 and 10.530-51 contained in Regulations, Land Bank Commissioner, Apr. 19, 1944, 9 F.R. 4167.

§ 10.530-50 Method of calling consolidated Federal farm loan bonds. When any Federal land bank shall desire to call for redemption any consolidated Federal farm loan bonds outstanding on its behalf, it shall, pursuant to appropriate authorization of the 12 Federal land banks, file with the Farm Credit Administration, at least 20 days prior to the date on which the call is to become effective, a certified copy of a resolution of its board of directors authorizing such call. The Land Bank Commissioner shall, at least 15 days prior to the date on which the call is to become effective, approve or disapprove the call and, if the call is approved, shall cause formal notice thereof to be published, at least 15 days prior to the effective date of the call, in the FEDERAL REGISTER and through any other facilities that the Farm Credit Administration may elect. Such notice shall describe the bonds so called for

redemption and shall designate the place or places where and the date on and after which they will be payable. Approval of the call and publication of notice as herein required shall be deemed a complete call. From the date of redemption designated in any such notice, interest on the bonds called for redemption shall cease.

§10.530-51 Call for less than entire issue of consolidated Federal farm loan bonds. In any case in which it is desired to call for redemption less than all of the outstanding bonds of any issue or issues, the bonds to be so called shall be selected in such manner as the Land Bank Commissioner shall prescribe.

PART 11-NATIONAL FARM LOAN ASSOCIATIONS

RETIREMENT OF STOCK UPON REPAYMENT OF LOANS

Sec. 11.65 Classification of associations. [Added] 11.392 Disposition of stock proceeds where association stock is unimpaired. [Added]

11.393 Disposition of stock proceeds where association stock is impaired. [Added]

11.394 Disposition of stock proceeds where association is in class 2. [Revoked] 11.395 Disposition of stock proceeds where association is in class 3 or 4. [Revoked]

AUTHORITY: § 11.65 and 11.392 to 11.395, inclusive, issued under sec. 6, 47 Stat. 14, secs. 7, 8, 39 Stat. 365, 367; 12 U.S.C. 665, 721, 733.

SOURCE: § 11.65 and 11.392 to 11.395, inclusive, contained in Regulations, Land Bank Commissioner, Sept. 22, 1944, 9 F.R. 11673.

§ 11.65 Classification of associations. The banks shall review periodically the financial condition of each association, and each completed compartment formed under the provisions of section 25 (b) of the Farm Credit Act of 1937 (12 U.S.C. 724), to determine whether its capital stock is impaired or unimpaired. For this purpose, the stock of an association shall be considered impaired if the total of its liabilities (including estimated losses on contingent liabilities) and capital stock is in excess of its total assets and such excess may not reasonably be regarded, under all the circumstances, as negligible in amount or percentage, as apparent rather than real, or as temporary only.

§ 11.392 Disposition of stock proceeds where association stock is unimpaired. When a mortgage loan through an association with unimpaired stock is paid in full, the bank shall retire its stock outstanding in connection with such loan and shall pay its par value in cash to the association. Upon the retirement of the bank stock, the association shall retire its stock outstanding in connection with such loan and shall pay the full proceeds thereof, less the amount of any claim of the association which may properly be offset against such stock proceeds, to the owner of, or the holder of a valid assignment of the beneficial interest in, such stock. The bank may, however, pursuant to a general resolution adopted by its board of directors and approved by the Farm Credit Administration, retire its stock and, with the consent of the association, credit an amount equal to the par value thereof as a last payment on the retiring borrower's loan. Before crediting stock of an unimpaired association to the retiring borrower's loan, the bank shall have satisfactory evidence that the person paying off the loan either owns, or holds a valid assignment of the beneficial interest in, stock issued by the association in connection with such loan and the association does not have a valid claim which properly may be offset against the proceeds of such stock upon its retirement.

§ 11.393 Disposition of stock proceeds where association stock is impaired. When a mortgage loan through an association with impaired stock is paid in full, the bank shall retire its stock outstanding in connection with such loan, and, if the association is indebted to the bank, it may retain the full amount of the proceeds of such stock and apply it as a credit on such indebtedness or it may pay to the association from the proceeds of such retired stock an amount sufficient to permit the association to make settlements pursuant to conservatorship proceedings, under section 29 of the Federal Farm Loan Act as amended, in which case any balance of such proceeds shall be retained by the bank and applied as a credit on the indebtedness of the association to it. Upon the retirement of the bank stock the association shall retire its stock outstanding in connection with such loan, and, unless it has been through conservatorship as

provided in said section 29, it shall not make any payments to its retired shareholders of record or their heirs or assigns until it has paid, or made adequate provision for paying, its indebtedness to its creditors and has sufficient funds available to make a distribution among its retired shareholders or their heirs or assigns on a pro rata basis. Except where settlement is made pursuant to conservatorship proceedings, an association with impaired stock shall issue to each retiring shareholder, or his heirs or assigns, a certificate which recites, in effect, that the holder of the certificate is entitled to share in the distribution of any assets of the association which is made after all its indebtedness to creditors has been paid or provided for; such sharing to be on the basis of the shares of stock described in the certificate, but not to exceed the par value of such shares, and pro rata with other persons having similar rights.

§ 11.394 Disposition of stock proceeds where association is in class 2. voked]

[Re

If the property offered as security is subject to any outstanding mortgage loan or loans held by the bank, the Corporation, or both, regardless of the amount stated in the application, the application fee shall be based on an amount applied for which includes the unmatured principal, as of the date of the application, of such outstanding mortgage loan or loans. The application fee may be collected at the time the application is filed. It may be retained by the association regardless of whether the loan is rejected or closed as a new, additional, or refunding bank loan, Commissioner loan, or joint bank and Commissioner loan; Provided, however, That if no association appraisal is made after a fee provided for in this paragraph has been collected, the amount of such fee shall be refunded. (Secs. 11 "Third", 17 (d), 39 Stat. 369, 375, as amended; 12 U.S.C. 761 “Third", 831 (d))

§ 19.324 Closed loans; association fees. Except as provided in § 19.325, when a bank loan is closed, associations may collect a closed loan fee in an amount which, when added to the association application fee already collected, will equal but not exceed 1 percent of the amount of the bank loan closed. (Secs. 11 "Third", 17 (d), 39 Stat. 369, 375, as amended; 12 U.S.C. 761 "Third", 831 (d))

§ 19.325 Additional and refunding loans; association fees. Where, upon the basis of an application in which there is offered as security property which is mortgaged, in whole or in part, to a bank, the Corporation, or both, a bank loan is closed through an association which endorsed the outstanding bank loan, the association may, whether the transaction is completed by way of a supplemental loan or a rewriting of the outstanding loan, collect a closed loan fee which, when added to the association application fee already collected, will not exceed 1 percent of the amount which represents other than unmatured principal of the outstanding bank loan as of the date of the application. Where, upon the basis of such an application, a bank loan is closed through a different association than that which endorsed the outstanding bank loan, or through any association if only a loan

held by the Corporation was outstanding, the association may collect a closed loan fee which, when added to the association application fee already collected, will not exceed 1 percent of the amount for which it endorses the bank loan or bank purchase money mortgage. (Secs. 11 "Third", 17 (d), 39 Stat. 369, 375, as amended; 12 U.S.C. 761 "Third", 831 (d))

§ 19.329 Association fees; increased loans. When an applicant for a loan offers as security therefor property which is mortgaged, in whole or in part, to a bank, the Corporation, or both, and the amount applied for is in excess of the total unmatured principal, as of the date of the application, of such outstanding mortgage loan or loans, the provisions of § 19.320 and the last sentence of § 19.324 shall apply in determining the amount of the application fee which may be collected and retained by the association through which such application is submitted, except that the maximum association application fee which may be collected in accordance with § 19.320 shall be based upon the amount of such excess. Where, upon the basis of such application, a bank loan is closed through an association, which endorsed the outstanding bank loan, the association may, whether the transaction is completed by way of a supplemental loan or a rewriting of the outstanding loan, collect a closed loan fee which, when added to the association application fee already collected, will not exceed 1 percent of the amount of the new note or notes which represents other than principal of the outstanding bank loan unmatured as of the date of the application. Where, upon the basis of such application, a bank loan is closed through a different association than that which endorsed the outstanding bank loan, or through any association if only a loan held by the Corporation was outstanding, the association may collect a closed loan fee which, when added to the

association application fee already collected, will not exceed 1 percent of the amount for which it endorses the bank loan. (Secs. 11 "Third", 17 (d), 39 Stat. 369, 375, as amended; 12 U.S.C. 761 "Third", 831 (d)) [Reg., Mar. 11, 1944, 9 F.R. 2769]

CODIFICATION: § 19.329 was revoked Nov. 8, 1944, 9 F.R. 13275.

§ 19.329-50 Association fees; decreased loans. If the amount applied for is equal to or less than the total unmatured principal, as of the date of the application, of any bank and/or Commissioner loans on the property offered as security, the association through which the application is submitted may collect an application fee, but not a closed loan fee. In such cases the amount of the application fee which may be collected and retained by the association shall be determined in accordance with the provisions of § 19.320 and the last sentence of § 19.324. (Secs. 11 "Third", 17 (d), 39 Stat. 369, 375, as amended; 12 U.S.C. 761 "Third", 831 (d)) [Reg., Mar. 11, 1944, 9 F.R. 2769]

CODIFICATION: 19.329-50 was revoked Nov. 8, 1944, 9 F.R. 13275.

and refunding

§ 19.330 Additional loans; bank fees. In connection with applications for additional or refunding loans, whether or not additional security is offered, the bank may require that a fee of not more than $10.00 be submitted with the application, and if a loan is closed, the bank may deduct from the proceeds an additional fee amounting to $1.00 for each $1,000.00, or fraction thereof, by which the amount of new money loaned exceeds $5,000.00 (Sec. 13 "Ninth", 17 (d), 39 Stat. 372, 375, secs. 26, 32, 48 Stat. 44, 48, as amended; 12 U.S.C. 781 "Ninth", 831 (d), 723 (e), 1016 (e))

[Paragraph (d) amended July 19, 1944, 9 F.R. 10142]

§ 22.2 New loan fees. The following new loan and other fees shall be charged and collected from applicants and borrowers through the Puerto Rico Branch Bank of The Federal Land Bank of Baltimore:

(a) Each application for a new loan shall be accompanied by an initial fee in the amount of $10.00. If the application for loan is approved, an additional initial fee of $15.00 must be paid prior to the examination of

300.00 312.50

$23,100.00 to $24,000.00_.
$24,100.00 to $25,000.00‒‒‒‒

If the application results in a joint land bank and Land Bank Commissioner loan, no fee shall be charged or collected from the applicant or borrower in connection with any loan made by the Land Bank Commissioner. If the application results in a single Commissioner loan, the initial fees totaling $25.00 shall be the only fees charged and collected from the applicant or borrower.

[Preceding paragraph, in small type, superseded by following paragraph during period covered by this Supplement]

(a) Each application for a new loan shall be accompanied by an initial fee in the amount of $10.00. If the application for loan is approved, an additional initial fee of $15.00 must be paid prior to the examination of title. If the application results in a Federal land bank loan in excess of $2,000.00, there shall be deducted from the proceeds of the loan an additional fee equal to 14% of each $100.00 or fraction thereof in excess of $2,000.00. If the application results in a joint land bank and Land Bank Commissioner loan, no fee shall be charged or collected from the applicant or borrower in connection with any loan made by the Land Bank Commissioner. If the application results in a single Commissioner loan, the initial fees totaling $25.00 shall be the only fees charged and collected from the applicant or borrower. [Paragraph (a) amended Aug. 22, 1944, 9 F.R. 11618]

The foregoing fees shall not be required to be paid in connection with any application for a loan to refinance a real estate contract or purchase money mortgage executed to the bank or the Federal Farm Mortgage Corporation unless the amount applied for exceeds the amount required for the purpose of refinancing such a real estate contract or purchase money mortgage. If the amount applied for exceeds such amount, the initial fees shall be charged and collected and, if the application results in a loan in excess of the amount required to refinance the real estate contract or purchase money mortgage, there shall be deducted from the proceeds of the loan a fee comparable to the fee which would be collectible in connection with a new loan: Provided, however, That the amount of the fee shall be computed only on that part of the loan which exceeds the amount required to refinance the real estate contract or purchase money mortgage. [Undesignated paragraph added July 19, 1944, 9 F.R. 10142]

(b) Each application for an increased or additional loan shall be accompanied by a fee of $10.00 and, if the application is approved, an additional initial fee of $15.00 must be paid prior to the examination of title. If a loan in an increased amount is closed, there shall be deducted from the proceeds of such increased loan a fee comparable to the fee which would be collectible in connection with a new loan: Provided, however, That the amount of the fee shall be computed only upon the basis of the amount of new money loaned to the borrower.

(c) Fees in connection with divisions of loans, reappraisals, partial releases and releases of personal liability shall be charged and collected from applicants and borrowers to the same extent and under the same conditions as such fees are charged and collected from applicants and borrowers within the states of the Second Farm Credit District as provided in § 22.1 hereof.

In the event no appraisal of the property is made, the entire application fee shall be refunded. Each applicant shall also be required to pay actual cash outlays for notarial fees, recording fees or other disbursements necessary for the completing of the transaction. (Secs. 4, 13 "Ninth", 39 Stat. 362, 372, secs. 26, 32, 48 Stat. 44, 48, as amended; 12 U.S.C. 674, 781 "Ninth", 723 (e), 1016 (e). §§ 19.326 and 19.330 of this chapter)