Farm Credit System Loan Restructuring and Local Control Act of 1987

Title I: Short Title - Farm Credit System Loan Restructuring and Local Control Act of 1987.

Title II: Central Reserve For Farm Credit System - Amends the Farm Credit Act of 1971 to authorize the Central Reserve Fund Board (established by this Act) to issue up to $4,000,000,000 in federally guaranteed bonds. Authorizes the Secretary of the Treasury to assist in the interest payments on such bonds for five years.

Title III: Central Reserve Fund Board - Establishes the Central Reserve Fund Board to administer the Central Reserve Fund.

Title IV: Assistance to Farm Credit Institutions - Provides for Federal assistance to Farm Credit System (FCS) institutions. Permits the use of Central Reserve Fund moneys to pay system institutions to enable them to redeem stock at par value and to otherwise remain financially viable. Requires the board of directors of a farm credit district to have a certain plan in place in order for any FCS institution in its district to be eligible.

Requires a recovery plan to be submitted within 60 days of the enactment of this Act. Requires a plan to: (1) establish a special credit team in the district to review on a case-by-case basis all the nonaccrual and high risk loans; (2) describe how the team plans to restructure rather than foreclose on troubled loans whenever it is cheaper for the institution to do so; and (3) describe how the district will reduce its operating costs at least ten percent below their 1985 levels.

Requires that: (1) the restructuring of each loan be done by the FCS institution that holds the loan; and (2) the district have in place a system for monitoring restructured loans to determine whether the restructuring has been successful.

Sets forth a procedure for determining whether a loan should be restructured or foreclosed.

Requires the Farm Credit Administration to report quarterly to the Central Reserve Fund Board on the adherence of the districts to their filed plans. Directs the Board, on the basis of such reports, to determine whether or not a district should receive, or continue to receive, Federal assistance.

Title V: Protection of Borrower Stock - Provides for protection of borrower stock. Declares that during the five year period following enactment of this Act, in the case of any FCS institution loan to a borrower that is secured by borrower stock: (1) if the stock is retired, it shall be paid at par value; (2) if the borrower defaults on the loan, the stock may be canceled; or (3) under other specified circumstances, the stock may be otherwise disposed of.

Title VI: Termination of Farm Credit System Capital Corporation - Terminates the Farm Credit System Capital Corporation and transfers all of its assets and liabilities to the Central Reserve Fund.

Title VII: Borrower Rights - Declares that any borrower, for a loan that is current under the loan agreement terms, may not: (1) be required to provide additional collateral; (2) be foreclosed on or otherwise liquidated for failing to post additional collateral; or (3) be required to furnish additional financial information unless the loan agreement so provides, or unless the borrower requests a change in the agreement terms.

Requires FCS institutions to provide borrowers with specified information about their loans, including copies of all documents, copies of the institution's charter and by-laws, interest rates, copies of current forbearance or restructuring policies, and the appraised value of the collateral.

Provides for stockholder reconsideration, upon the request of at least five percent of the stockholders, of any decision by an association under the Farm Credit System to merge voluntarily with another association. Requires such a request to be made within 60 days after a majority of an association's stockholders votes to merge. Voids the merger if a majority of stockholders present and voting at the reconsideration meeting votes against the merger.

Title VIII: Establishment of Secondary Market for Agricultural Mortgages - Establishes as a federally-chartered institution of the Farm Credit System the Federal Agricultural Mortgage Corporation (Corporation). States that the Corporation shall not be liable for the debts of any other System institutions.

Directs the Corporation to provide a secondary agricultural mortgage market by: (1) developing uniform underwriting, security appraisal, and repayment standards; (2) determining the eligibility of agricultural mortgage marketing facilities to contract with the Corporation for credit enhancement of specific mortgage pools; and (3) providing credit enhancement to assure repayment of principal and interest on pools of qualified agricultural mortgage loans.

Sets forth provisions relating to: (1) the Board of Directors; (2) operating powers; (3) stock; (4) agricultural mortgage marketing facility certification (including revocation); (5) credit enhancement of qualified agricultural mortgage loans; (6) the required ten-percent contribution reserve (including distributions of any earnings on such reserve and loss allocation); (7) standards for qualified agricultural mortgage loans; (8) credit enhancement (including fees and limitations on liability); (9) Corporation regulation (including an annual report); and (10) exemption from Federal and State securities laws under specified conditions (including authorized investments).