[Federal Register Volume 68, Number 160 (Tuesday, August 19, 2003)]
[Notices]
[Pages 49773-49774]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-21112]


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FARM CREDIT ADMINISTRATION


Proposed Related Services; Farm Management and Agricultural Trust

AGENCY: Farm Credit Administration.

ACTION: Notice; Request for public comment.

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SUMMARY: The Farm Credit Administration (FCA or we) requests public 
comment on an inquiry by a Farm Credit System (System or FCS) 
institution for approval to offer farm management and agricultural 
trust services as authorized ``Related Services.'' The requested 
services are being published for a 60-day public comment period prior 
to the FCA acting on the request to offer such services.

DATES: Please send your comments to the FCA by October 20, 2003.

ADDRESSES: You may send comments by electronic mail to [email protected], through the Pending Regulations section of the FCA's 
interactive Web site at www.fca.gov, or through the government-wide 
www.regulations.gov portal. You may also send written comments to 
Robert Coleman, Director, Regulation and Policy Division, Office of 
Policy and Analysis, Farm Credit Administration, 1501 Farm Credit 
Drive, McLean, Virginia 22102-5090 or by facsimile to (703) 734-5784. 
Copies of all comments we receive can be reviewed at FCA's office in 
McLean, Virginia.

FOR FURTHER INFORMATION CONTACT: 

Lori Markowitz, Policy Analyst, Office of Policy and Analysis, Farm 
Credit Administration, McLean, VA 22102-5090, (703) 883-4498, TTY (703) 
883-4434;
     or
Joy Strickland, Senior Counsel, Regulatory Enforcement Division, Office 
of General Counsel, Farm Credit Administration, McLean, VA 22102-5090, 
(703) 883-4020, TTY (703) 883-4020.

SUPPLEMENTARY INFORMATION: 

I. Objective

    Consistent with law and safety and soundness principles, the 
objective of this notice is to request public comment on a request from 
a FCS institution to offer farm management and agricultural trust 
services as authorized ``Related Services.''

II. Background

    Related services, as defined in 12 CFR 618.8000(b) means ``any 
service or type of activity provided by a System bank or association 
that is appropriate to the recipient's on-farm, aquatic, or cooperative 
operations, including control of related financial matters.'' Any new 
service not previously authorized and placed on the Related Services 
List in 12 CFR part 618 requires a prior determination that the service 
is legally authorized. The FCA also must evaluate whether the service 
presents excessive risk to the requesting institution or the System as 
a whole, including whether the service could result in significant 
conflicts of interest or expose the institution or the System as a 
whole to significant liability.

III. Proposed Related Services

    Under the proposal, the following services would be provided to 
persons eligible to receive such services from Farm Credit institutions 
under 12 CFR 618.8005.
    1. Farm Management Services: Professionals familiar with the market 
would provide management of agricultural properties for real estate 
owners in the service area. Farm management includes defining ownership 
goals, identifying problems, analyzing alternatives, and making 
recommendations for achieving business goals. Farm managers would 
present the customer with a full spectrum of lease or custom farming 
alternatives and help the owner decide how to ultimately get the best 
return on assets. Key factors of the service would include developing a 
comprehensive farm operating plan, securing operators and negotiating 
leases, providing property reporting, including annual budgets and 
projections, analyzing government programs, formulating and 
implementing capital improvements and repairs, and handling commodity 
sales.
    2. Agricultural Trust Services: The applicant would assist 
customers in creating a trust and managing the assets of the trust. As 
the trustee, the applicant would handle the responsibilities involved 
in settling the estate, including record keeping, asset management, 
asset disposition, tax filings, and income distributions.

IV. Requesting Comments

    In its evaluation of the proposed services, the FCA will focus on 
systemic issues rather than on institution or program-specific factors. 
If we authorize the above related services, any System bank or 
association may develop a program and subsequently offer the same 
related service(s) to eligible recipients, subject to any special 
conditions or limitations imposed by the FCA. We may, at the time of 
approval, impose such special conditions or limitations on any approved 
service to ensure safety and soundness or compliance with law or 
regulation. These programs would be subject to review during the 
examination process.
    Because of the complex nature of these proposed services, the FCA 
solicits public comment prior to acting on the request, in accordance 
with 12 CFR 618.8010(b)(3). We believe that evaluation of the proposal 
will be aided by public comment. Specifically, we request comments on 
the risks inherent in offering these services, such as the

[[Page 49774]]

potential for conflicts of interest and liability or environmental 
concerns, particularly in regard to providing such services to 
borrowers who may be having financial difficulty or who may be missing 
loan payments. We request commenters propose how they believe these 
identified risks might be mitigated, keeping in mind that some of the 
risks could be addressed by licensing requirements, requiring pertinent 
disclosure for certain services, and adopting internal controls. We 
also request comments on the potential benefits to farmers, the impact 
of such services on the lending function, and any other pertinent 
issues. In addition, we request comments on what Systemwide issues 
might be raised by a decision to authorize such services.

    Dated: August 13, 2003.
Jeanette C. Brinkley,
Secretary, Farm Credit Administration Board.
[FR Doc. 03-21112 Filed 8-18-03; 8:45 am]
BILLING CODE 6705-01-P