[Federal Register Volume 74, Number 209 (Friday, October 30, 2009)]
[Notices]
[Pages 56195-56196]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-26230]


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FARM CREDIT ADMINISTRATION


Farm Credit Administration Board Policy Statements

AGENCY: Farm Credit Administration.

ACTION: Notice.

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SUMMARY: The Farm Credit Administration (FCA) is publishing the list of 
FCA Board policy statements, which includes three changes since its 
last publication and one policy statement in its entirety.

FOR FURTHER INFORMATION CONTACT: Wendy Laguarda, Assistant General 
Counsel, Office of General Counsel, Farm Credit Administration, 1501 
Farm Credit Drive, McLean, Virginia 22102-5090, (703) 883-4020, TTY 
(703) 883-4020.

SUPPLEMENTARY INFORMATION: On November 25, 2005, we published a list of 
all current FCA Board policy statements and the text of each in their 
entirety. (See 70 FR 71142.) On June 13, 2006, we published just the 
list and stated that there were no changes. (See 71 FR 34132.) Since 
then, we published a revised policy statement (FCA-PS-62) (71 FR 46481, 
Aug. 14, 2006). The list being published today contains a revised 
policy statement (FCA-PS-79) which was originally published at 73 FR 
9804, Feb. 22, 2008. We are publishing the text of policy statement 
FCA-PS-79 in its entirety.
    You can view each policy statement online at http://www.fca.gov/handbook.nsf. The FCA will continue to publish new or revised policy 
statements in their full text.

FCA Board Policy Statements

FCA-PS-34 Disclosure of the Issuance and Termination of Enforcement 
Documents
FCA-PS-37 Communications During Rulemaking
FCA-PS-41 Alternative Means of Dispute Resolution
FCA-PS-44 Travel
FCA-PS-53 Examination Philosophy
FCA-PS-59 Regulatory Philosophy
FCA-PS-62 Equal Employment Opportunity Diversity
FCA-PS-64 Rules for the Transaction of Business of the Farm Credit 
Administration Board
FCA-PS-65 Release of Consolidated Reporting System Information
FCA-PS-67 Nondiscrimination on the Basis of Disability in Agency 
Programs and Activities
FCA-PS-68 FCS Building Association Management Operations Policies and 
Practices
FCA-PS-71 Disaster Relief Efforts by Farm Credit Institutions
FCA-PS-72 Financial Institution Rating System (FIRS)
FCA-PS-77 Borrower Privacy
FCA-PS-78 Official Names of Farm Credit System Institutions
FCA-PS-79 Consideration and Referral of Supervisory Strategies and 
Enforcement Actions

Consideration and Referral of Supervisory Strategies and Enforcement 
Actions

FCA-PS-79 [NV-09-16]

    Effective Date: August 7, 2009.
    Effect on Previous Action: Rescinds and supersedes the previous PS-
79.
    Source of Authority: Sections 5.19, 5.25-5.35 of the Farm Credit 
Act of 1971, as amended.
    The FCA board hereby adopts the following policy statement:
    The Farm Credit Administration (FCA or Agency) Board provides for 
the regulation and examination of Farm Credit System (System or FCS) 
institutions, which includes the Federal Agricultural Mortgage 
Corporation (Farmer Mac), in accordance with the Farm Credit Act of 
1971, as amended (the ``Act''). This policy addresses conditions that 
warrant referrals to the Agency's Regulatory Enforcement Committee 
(REC) to consider appropriate supervisory strategies and recommend to 
the FCA Board the use of the enforcement authorities conferred on the 
Agency under Part C, Title V of the Act or other statutes. Enforcement 
actions include formal agreements, orders to cease and desist, 
temporary orders to cease and desist, civil money penalties, 
suspensions or removals of directors or officers, and conditions 
imposed in writing to address unsafe or unsound practices or violations 
of law, rule or regulation (Enforcement Document). Taking these 
actions, in an appropriate and timely manner, is critical to 
maintaining shareholder, investor, and public confidence in the 
financial strength and future viability of the System.
    This policy provides only internal FCA guidance. It is not intended 
to create any rights, substantive or procedural, enforceable at law or 
in any administrative proceeding.

Composition of the REC

    The Chairman of the FCA Board will designate the Chief Operating 
Officer

[[Page 56196]]

and the office directors of the Office of Examination, Office of 
General Counsel, and Office of Regulatory Policy, or the directors of 
successor offices, as voting members of the REC. A representative from 
the Farm Credit System Insurance Corporation will be invited to 
participate in REC activities as a non-voting member. The Chairman of 
the FCA Board will also designate one of the voting REC members as 
Chairman of the REC.
    Due to the statutory independence of the Office of Secondary Market 
Oversight (OSMO), there will be different REC membership when 
considering issues related to Farmer Mac.

Referrals to the REC

    Recommended supervisory strategies or enforcement actions 
concerning an FCS institution or person will be referred to the REC 
when any of the conditions exist, as specified below, or when a 
specified condition does not exist, but consideration of an enforcement 
action or review by the REC is appropriate. The REC will review the 
proposed actions and draft enforcement documents and assess the 
recommendations for pursuing any such actions. The REC may revise the 
recommendations and will document its concurrence or nonconcurrence 
with the supervisory strategy or enforcement action.

Conditions Warranting Referral to the REC

    Any one of the following conditions requires a referral to the REC 
for its consideration of supervisory strategies or enforcement actions.
    1. A ``4'' or ``5'' composite FIRS rating is assigned to an FCS 
institution;
    2. The institution or person is deemed unable or unwilling to 
address a material: (a) Unsafe or unsound condition or practice; or (b) 
violation or ongoing violation of law or regulation;
    3. The institution or person is about to engage in a material 
unsafe or unsound practice or is about to commit a willful or material 
violation of law or regulation that exposes the institution to 
significant risk;
    4. Conditions meet the statutory criteria for a suspension or 
removal;
    5. Conditions meet the statutory criteria for assessing a civil 
money penalty and the factors to be considered in determining the 
amount of a civil money penalty justify the imposition of the penalty;
    6. Conditions meet the statutory criteria to place an FCS 
institution in conservatorship or receivership;
    7. An institution or person fails to comply with an Enforcement 
Document or is unwilling or unable to address a violation of a 
condition imposed in writing; or
    8. Conditions justify termination or modification of an existing 
Enforcement Document.

As appropriate, referrals for the REC's consideration also may be made 
for conditions not specified above.

Notification of the REC

    The REC will be notified when any institution is assigned a ``3'' 
composite FIRS rating and informed of the Agency's supervisory 
strategies.

Consultation With the REC

    For institutions under a formal Enforcement Document, or assigned a 
composite FIRS rating of ``4'' or ``5'', requests for prior approvals, 
or other actions, will be referred to the REC for consultation.

Referral to the FCA Board

    The REC will refer to the FCA Board for its consideration all 
recommendations concurred with by the REC for the placement of an 
Enforcement Document on a FCS institution or person. In the unlikely 
instance, when an institution receives a composite ``4'' or ``5'' FIRS 
rating and a formal Enforcement Document is not recommended to the FCA 
Board, the REC will promptly document and report the Agency's 
supervisory strategy to the FCA Board.

Reporting to the FCA Board

    The REC Chairman will report at least quarterly to the FCA Board if 
matters are referred to or reviewed by the REC, but FCA Board action is 
not subsequently requested.

Actions by the REC

    The REC will develop procedures to address the responsibilities 
outlined herein.
    Due to OSMO's statutory independence, the Director of OSMO will 
develop procedures for actions affecting Farmer Mac.
    Dated this 7th day of August 2009 by order of the Board.

    Signed by: Roland E. Smith, Secretary, Farm Credit Administration 
Board.

    Dated: October 26, 2009.
Roland E. Smith,
Secretary, Farm Credit Administration Board.
[FR Doc. E9-26230 Filed 10-29-09; 8:45 am]
BILLING CODE 6705-01-P