§ 720. Obligations of Association
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(a)General To carry out the purposes of this chapter, the Association is authorized to issue bonds, debentures, trust certificates, securities, or other obligations (herein cited as “obligations”) in accordance with this section. Such obligations shall have such maturities and bear such rate or rates of interest as are determined by the Association with the approval of the Secretary of the Treasury. Such obligations shall be redeemable at the option of the Association prior to maturity in the manner stipulated in each such obligation, and may be purchased by the Association in the open market at a price which is reasonable.
(b)Maximum obligational authority The aggregate principal amount (exclusive of interest or additions to principal on account of accrual of interest) of obligations issued by the Association under this section which may be outstanding at any one time shall not exceed $395,000,000. No obligations or proceeds thereof shall be issued or made available after February 5, 1976, except—
(1)to meet existing or potential commitments for loans under section 721 of this title made or applied for prior to January 1, 1976; and
(2)for the purpose of providing loans pursuant to subsections
(g)and
(h)of section 721 of this title.
(c)Guarantees The Secretary shall guarantee the payment of principal and interest on all obligations issued by the Association in accordance with this chapter and which the Association requests be guaranteed. All guarantees entered into by the Secretary under this section shall constitute general obligations of the United States for the payment of which its full faith and credit are pledged.
(d)Validity No obligation issued by the Association under this section shall be terminated, canceled, or otherwise revoked, except in accordance with lawful terms and conditions prescribed by the Association. Such an obligation shall be conclusive evidence that it is in compliance with this section, has been approved, and is legal as to principal, interest, and other terms. An obligation of the Association shall be valid and incontestable in the hands of a holder, except as to fraud, duress, mutual mistake of fact, or material misrepresentation by or involving such holder.
(e)The Secretary of the Treasury If at any time the moneys available to the Secretary are insufficient to enable him to discharge his responsibilities under subsection
(c)of this section or under subsection
(a)of section 746 of this title, he shall issue notes or other obligations to the Secretary of the Treasury in such forms and denominations, bearing such maturities, and subject to such terms and conditions as may be prescribed by the Secretary of the Treasury. Such obligations shall bear interest at a rate to be determined by the Secretary of the Treasury taking into consideration the current average market yield on outstanding marketable obligations of the United States of comparable maturities during the month preceding the issuance of such obligations. The Secretary of the Treasury is authorized and directed to purchase any such obligations and for such purposes is authorized to use as a public debt transaction the proceeds from the sale of any securities issued under chapter 31 of title 31. The purposes for which securities may be issued under such chapter are extended to include any purchase of notes or other obligations issued under this subsection. At any time, the Secretary of the Treasury may sell any such obligations, and all sales, purchases, and redemptions of such obligations by the Secretary of the Treasury shall be treated as public debt transactions of the United States.
(f)Authorization for appropriations There are hereby authorized to be appropriated to the Secretary such amounts as are necessary to discharge the obligations of the United States arising under this section.
(g)Lawful investments All obligations issued by the Association shall be lawful investments and may be accepted as security for all fiduciary, trust, and public funds, the investment or deposit of which shall be under the authority and control of the United States or any officer or officers thereof. All such obligations issued pursuant to this section shall be exempt securities within the meaning of laws administered by the Securities and Exchange Commission.
(Pub. L. 93–236, title II, § 210, Jan. 2, 1974, 87 Stat. 1000; Pub. L. 94–210, title VI, §§ 604, 607(k), Feb. 5, 1976, 90 Stat. 88, 97; Pub. L. 94–555, title II, § 203(e), Oct. 19, 1976, 90 Stat. 2620; Pub. L. 96–448, title VII, § 703(f)(3), Oct. 14, 1980, 94 Stat. 1965.)
Connections19 cite this · traces to 6
Cited by 19 sections · top 16
U.S. Code
statutes-at-large
- Public Law 99–88Making supplemental appropriations for the fiscal year ending September 30, 1985, and for other purposes
- Public Law 97–12Making supplemental and further continuing appropriations for the fiscal year ending September 30, 1981, rescinding certain budget authority, and for other purposes
- Public Law 94–555To amend the Rail Passenger Service Act to provide financing for the National Railroad Passenger Corporation, to amend tile Regional Rail Reorganization Act of 1973 to increase the amount of loan authority under section 211(h)(1) of such Act, and for other purposes
- Public Law 97–257Making supplemental appropriations for the fiscal year ending September 30, 1982, and for other purposes
- Public Law 98–63Making supplemental appropriations for the fiscal year ending September 30, 1983 and for other purposes
- Public Law 98–396Making supplemental appropriations for the fiscal year ending September 30, 1984, and for other purposes
- Public Law 94–303Making supplemental appropriations for the fiscal year ending June 30, 1976, and the period ending September 30, 1976, and for other purposes
- Public Law 94–210To improve the quality of rail services in the United States through regulatory reform, coordination of rail services and facilities, and rehabilitation and improvement financing, and for other purposes
- Public Law 96–448To reform the economic regulation of railroads, and for other purposes
- Public Law 100–71Making supplemental appropriations for the fiscal year ending September 30, 1987, and for other purposes
- Public Law 94–5To amend the Regional Rail Reorganization Act of 11173 to increase the financial assistance available under section 213 and section 215, and for other purposes
18 references not yet in our index
- Pub. L. 93–236, title II, § 210
- 87 Stat. 1000
- Pub. L. 94–210, title VI
- 90 Stat. 88
- Pub. L. 94–555, title II, § 203(e)
- 90 Stat. 2620
- Pub. L. 96–448, title VII, § 703(f)(3)
- 94 Stat. 1965
- Pub. L. 97–258, § 4(b)
- 96 Stat. 1067
- Pub. L. 96–448
- Pub. L. 94–555
- Pub. L. 94–210, § 604
- Pub. L. 94–210, § 607(k)
- section 710(a) of Pub. L. 96–448
- section 303 of Pub. L. 94–555
- Pub. L. 94–210
- section 619 of Pub. L. 94–210
Citation graph
cites case law
§ 720
Obligations of Association
Stat.×13
Stat. Comp.×3
U.S.C.×3
Pub. L.Pub. L. 93–236, title II, § 210
Stat.87 Stat. 1000
Pub. L.Pub. L. 94–210, title VI
Stat.90 Stat. 88
Pub. L.Pub. L. 94–555, title II, § 203(e)
Cites 24 · showing 11Cited by 19 across 3 sources