{"data":{"id":"us/12-cfr-615.5250","jurisdiction":"us","citation":"12 CFR 615.5250","heading":"Disclosure requirements for sales of borrower stock.","body":"(a) For sales of borrower stock, which for this subpart means equities purchased as a condition for obtaining a loan, a System institution must provide a prospective borrower with the following documents prior to loan closing:\n(1) The institution's most recent annual report filed under part 620 of this chapter;\n(2) The institution's most recent quarterly report filed under part 620 of this chapter, if more recent than the annual report;\n(3) A copy of the institution's capitalization bylaws; and\n(4) A written description of the terms and conditions under which the equity is issued. In addition to specific terms and conditions, the description must disclose:\n(i) That the equity is an at-risk investment and not a compensating balance;\n(ii) That the equity is retireable only at the discretion of the board of directors consistent with the institution's bylaws and only if minimum capital standards established under subpart H of this part and part 628 of this chapter are met and that such retirement may also require the approval of the FCA;\n(iii) Whether the institution presently meets its minimum capital standards established under subpart H of this part and part 628 of this chapter;\n(iv) Whether the institution knows of any reason the institution may not meet its capital standards on the next earnings distribution date; and\n(v) The rights, if any, to share in patronage payments.\n(b) Notwithstanding the provisions of paragraph (a) of this section, no materials previously provided to a purchaser (except the disclosures required by paragraph (a)(4) of this section) need be provided again unless the purchaser requests such materials.","path":["Title 12—Banks and Banking","CHAPTER VI—FARM CREDIT ADMINISTRATION","SUBCHAPTER B—FARM CREDIT SYSTEM","PART 615—FUNDING AND FISCAL AFFAIRS, LOAN POLICIES AND OPERATIONS, AND FUNDING OPERATIONS","Subpart I—Issuance of Equities"],"source_url":"https://www.ecfr.gov/api/versioner/v1/full/2026-08-25/title-12.xml","current_through":"2026-08-25","vintage":"","retrieved_at":"2026-08-27T02:24:16Z","sha256":"49e6ec0e367e963b02f1be9954208f63e5404b6f861d956425222b44d586e2cd","source_id":"us-cfr","stale":true,"prev":"us/12-cfr-615.5245","next":"us/12-cfr-615.5255"},"notice":"GroundRules: Original legal text. Not legal advice."}