[Federal Register Volume 76, Number 170 (Thursday, September 1, 2011)]
[Rules and Regulations]
[Pages 54638-54656]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-22203]



[[Page 54637]]

Vol. 76

Thursday,

No. 170

September 1, 2011

Part IV





Farm Credit Administration





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12 CFR Chapter VI





Board Policy Statements; Rule

  Federal Register / Vol. 76 , No. 170 / Thursday, September 1, 2011 / 
Rules and Regulations  

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FARM CREDIT ADMINISTRATION

12 CFR Chapter VI


Board Policy Statements

AGENCY: Farm Credit Administration.

ACTION: Policy statements.

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SUMMARY: The Farm Credit Administration (FCA) Board recently undertook 
its 5-year review of FCA Board policy statements. This review resulted 
in revisions to 14 policy statements that are mostly technical, 
grammatical, or syntactical. However, a few of the revisions add 
clarity to the policy statements and other revisions incorporate 
changes required either by new laws or by changes in the functional 
statement of operations for some FCA offices.

DATES: The effective date is indicated on each individual policy 
statement set forth below.

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: A list of the 14 revised FCA Board policy 
statements and the text of each are set forth below in their entirety. 
All FCA Board policy statements may be viewed on FCA's Web site. Please 
go to http://www.fca.gov. Then select ``Laws & Regulations,'' then 
select ``FCA Handbook,'' then select ``FCA Board Policy Statements.''

FCA Board Policy Statements

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 and 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-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 Institutions
FCA-PS-79 Consideration and Referral of Supervisory Strategies and 
Enforcement Actions

Communications During Rulemaking

FCA-PS-37

    Effective Date: 08-JUL-11.
    Effect on Previous Actions: Replaces previous Farm Credit 
Administration (FCA or Agency) Board policy on public communications 
during a rulemaking, adopted March 25th, 1992. See 57 FR 11083, April 
1, 1992. Amended by NV-11-15 (8-JUL-11).
    Source of Authority: None.
    The FCA Board finds that it is in the public interest and 
consistent with the requirements of the Administrative Procedure Act to 
revise its policy on communications with the public during the 
rulemaking process.

The FCA Board Hereby Adopts the Following Policy Statement

    In keeping with the need to ensure an open, freely accessible, and 
well-informed rulemaking process while balancing the need for 
impartiality and fairness, the FCA adopts the following guidelines 
governing substantive oral communications between the public and Board 
members and staff during the course of a related rulemaking.

Before a Rulemaking Begins

    Unrestricted communication with the public before rulemaking begins 
supports and promotes the Agency's efforts to design creative and 
effective regulatory policy. No specific guidelines apply to that 
communication.

From Publication of Notice of Proposed Rulemaking to the End of the 
Comment Period

    After a particular rulemaking has begun with publication of a 
notice of proposed rulemaking (including publication of an advance 
notice of proposed rulemaking), FCA encourages members of the public to 
provide written comments during the public comment period. All written 
comments are placed in a public file, where they are available for 
examination and copying during normal business hours. The comments 
receive careful consideration and become part of the public record of 
the rulemaking.
    Where appropriate, FCA may also conduct public hearings or open 
meetings to take testimony or hold discussions on a rulemaking. Such 
opportunities for comment from the public will be announced in advance 
and the comments received will be placed in the public rulemaking file.
    Substantive oral communications during the comment period between 
FCA personnel, including Board members and staff, and members of the 
public regarding the subject of an ongoing rulemaking will be 
summarized in writing and placed in the public rulemaking file. While 
FCA personnel are always available to explain or clarify proposed 
rules, if an individual wants to engage FCA personnel in substantive 
discussion concerning a published proposed rule, he or she should first 
file a written comment covering the matter to be discussed, 
particularly if he or she has not already filed a written comment. If 
new substantive comments are discussed, FCA staff will reduce the 
substance of such comments to writing, promptly place it in the public 
rulemaking file, and urge the individual to submit a written comment.

From the Close of the Comment Period to the Adoption of the Final Rule

    From the close of the comment period until adoption of the final 
rule, substantive discussions between members of the public and FCA 
personnel relating to the proposed rule should be curtailed. In the 
interest of fairness, if new facts or arguments must be brought to the 
attention of the FCA, the communication must be in writing so that it 
can promptly be placed in the public rulemaking file.
    FCA believes these guidelines will help ensure a complete 
rulemaking record for future agency consideration of the rule or in the 
event of court review. Further, FCA strongly believes that the 
rulemaking process must be open and evenhanded in order to avoid even 
the appearance of impropriety or undue influence that might arise from 
private communication during certain periods. Finally, if a substantive 
comment on a proposed rule were transmitted to FCA in a private 
communication that did not become part of the public record, other 
members of the public would not have an opportunity to respond to any 
new arguments or facts contained in that communication. Because FCA 
believes that its rulemaking process benefits from give and take among 
commenters who are able to consider each others' comments, this policy 
statement requires all comments to be placed in the public rulemaking 
file.
    This policy statement does not apply to public communications 
regarding any rulemaking issue unless and until the matter becomes the 
subject of a notice of proposed rulemaking. Nothing in the policy 
statement is meant to affect the ability of FCA to use negotiated 
rulemakings, open meetings or other types of public forums to augment 
its rulemaking under section 553 of the Administrative Procedure Act.

    Dated this 8th day of July 2011.


[[Page 54639]]


    By Order of the Board.

Dale L. Aultman,
Secretary to the Board.

Alternative Means of Dispute Resolution

FCA-PS-41

    Effective Date: 8-JUL-11.
    Effect on Previous Action: Originally adopted 16-JUL-92 (see 57 FR 
33198, July 27, 1992); amended 30-MAY-96; amended 10-FEB-97; amended by 
NV-11-15 (8-JUL-11).

    Source of Authority: Administrative Dispute Resolution Act of 
1996, Public Law 104-320, 110 Stat. 3870 (1996), and codified at 5 
U.S.C. 571 et seq.
    The Administrative Dispute Resolution Act of 1996 (Act), addresses 
the concern that traditional methods of dispute resolution, such as 
litigation and administrative adjudication, have become increasingly 
time-consuming and expensive. The Act authorizes and encourages greater 
use of alternative means of dispute resolution (ADR), requiring each 
Federal agency to adopt a policy addressing the use of ADR.
    ADR consists of informal, voluntary procedures used by parties who 
seek to resolve their disputes by consent. Such procedures include, but 
are not limited to, mediation, conciliation, facilitation, fact-
finding, arbitration, and mini-trials, or any combination thereof. By 
emphasizing the common goals of the parties and fostering an atmosphere 
of cooperation, ADR can offer a less contentious and more expeditious 
alternative to traditional methods of dispute resolution such as 
litigation and administrative adjudication.
    The use of ADR in appropriate circumstances is consistent with the 
Farm Credit Administration's (FCA or Agency) mission as an agency. To 
promote a safe and sound, competitive Farm Credit System, the FCA 
always strives to effectively and efficiently manage its resources. By 
expediting the resolution of certain disputes, ADR can reduce the FCA's 
transaction costs, increase the FCA's productivity, and help the FCA 
accomplish its goals.

The FCA Board Hereby Adopts the Following Policy Statement

    It is the policy of the FCA to resolve disputes in an effective and 
efficient manner. Many of the disputes encountered by the FCA are 
resolved most effectively and efficiently through settlement 
negotiations between the FCA and the other parties to the disputes 
prior to the initiation, or in the early stages of, more formal 
litigation or administrative adjudication. The FCA will continue to use 
settlement negotiations as a method of dispute resolution.
    In addition, the FCA will consider whether it is appropriate to use 
ADR when a dispute arises. In assessing the advisability of using ADR 
procedures, as defined in 5 U.S.C. 571(3), the FCA will consider 
whether such procedures are likely to reduce the FCA's transaction 
costs, increase the FCA's productivity, and help the FCA accomplish its 
goals of effective regulations and policies and the enhancement of 
FCA's effectiveness and cost efficiency. The FCA will also consider the 
factors set forth in 5 U.S.C. 572(b) in deciding whether it is 
appropriate to use such ADR procedures.
    The FCA's Dispute Resolution Specialist (ADR Specialist), 
designated by the Chairman, is responsible for the implementation of 
this policy statement. The ADR Specialist is available to assist FCA 
personnel in considering the appropriate application of ADR procedures. 
Before deciding whether it is appropriate to use an ADR procedure, FCA 
personnel will consult with, and obtain the concurrence of, the ADR 
Specialist or his or her designee.
    The ADR Specialist and those FCA personnel involved in resolving 
disputes are encouraged to attend educational and training programs 
relating to the theory and application of ADR on a regular basis, as 
the FCA budget permits.
    Based on the voluntary nature of ADR, all parties to a dispute must 
agree to use an ADR procedure before it can be initiated.

    Dated This 8th day of July 2011.

    By Order of the Board.

Dale L. Aultman,
Secretary to the Board.

Travel

FCA-PS-44

    Effective Date: 8-JUL-11.
    Effect on Previous Actions: Originally adopted 13-JUN-91; amended 
12-NOV-92; amended by NV-11-15 (8-JUL-11).

    Source of Authority: 5 U.S.C. 7351, 7353; 5 U.S.C. App. (Ethics 
in Government Act of 1978); E.O. 12674, 54 FR 15159, 3 CFR, 1989 
Comp., p. 215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 
Comp., p. 306; 12 U.S.C. 2242 (Section 5.8 of the Farm Credit Act of 
1971, as amended), 41 CFR part 301.

The FCA Board Hereby Adopts the Following Policy Statement

    Members of the Farm Credit Administration (FCA or Agency) Board are 
not subject to the same requirements regarding allowances for travel 
and subsistence that generally apply to officers and employees of the 
United States (Sec.  5.8 of the Farm Credit Act of 1971, as amended). 
Nevertheless, it is the general policy of the FCA Board (Board) that 
Board members will travel on official business in the most economical 
fashion reasonable under the circumstances.
    FCA Board members are subject to Federal laws, rules, and Executive 
Orders relating to conflicts of interest that may result from accepting 
gifts, including travel related expenses, from outside sources. 
Generally, Board members may not accept anything of value from:
     A person seeking official action from, doing business 
with, or conducting activities regulated by the FCA, or
     A person whose interests may be substantially affected by 
the performance or nonperformance of our official duties.
    Such persons are prohibited sources. (See Executive Order 12674, as 
amended; 5 U.S.C. 7353; and 5 CFR part 2635, the Executive Branch-wide 
standards of ethical conduct issued by the Office of Government 
Ethics.) An organization is also a prohibited source if more than half 
of its members are prohibited sources.
    The gift rule under the standards of ethical conduct and the 
Agency's gift acceptance authority at 31 U.S.C. 1353 outline the 
limited circumstances in which government officials may accept gifts 
and the payment of travel expenses from outside sources. Unless an 
exception applies, ethics rules prevent Board members from accepting 
gifts offered because of their official positions. Under no 
circumstances may Board members accept anything of value in return for 
being influenced in the performance of an official act. The aim of 
these rules is to prevent an actual conflict of interest or the 
appearance of a conflict and to uphold public confidence in the 
integrity of the Government and the Agency.
    Except as noted above, third parties may not pay for official 
Agency expenditures. Because the Agency is responsible for the cost of 
conducting official business, Board members will ensure that the Agency 
is billed directly for travel expenses whenever possible (for example, 
by using a Government issued credit card for travel expenses). On those 
occasions when direct Agency payment is impossible or impractical (for 
example, a large group business dinner arranged and paid for in advance 
by the organizer), Board members will promptly notify the Agency of the 
obligation and ensure that the payer is promptly reimbursed. Board 
Members

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recognize that it is important not to create the impression that a 
third party, particularly a prohibited source, is paying for their 
expenses.

Travel

Transportation

    Board members will use less than first-class accommodations for all 
modes of transportation except in circumstances where:
    1. A Board member must use first-class accommodations because no 
other space accommodations are reasonably available or where other 
practical considerations exist (such as to accommodate a disability or 
other special need);
    2. Exceptional security circumstances require it;
    3. The conduct of Agency business requires it; or
    4. A Board member receives first-class travel benefits on an 
unsolicited basis from a carrier (such as free first-class coupons) and 
the benefit cannot be used by the Agency either in the present or the 
future, cannot be redeemed for cash value, and does not require the 
redemption of official miles. Under these circumstances, Board members 
can use the first-class benefit for either official or personal travel.
    Board members will use a commercial charter flight at Agency 
expense only when no commercially scheduled flights are available in 
time to meet the requirements of the travel or when the charter flight 
would be more economical than a commercial flight. Board members will 
avoid the use of private aircraft whenever possible and use them only 
where commercial or charter flights are not reasonably available or 
would impose undue hardships. When reporting travel expenses, Board 
members must adequately justify the use of a commercial charter flight, 
private aircraft, or first-class accommodations.

Lodging

    When available and practical, Board members will book lodging at 
the Government rate or another available reduced rate at hotels and 
motels. When attending a convention, meeting, or other official 
activity, Board members will ordinarily obtain lodging at the hotel or 
motel holding the activity even if reduced rates are available 
elsewhere. Board members may also book more than one room when 
necessary for the conduct of official business on the premises.
    The Agency will not ordinarily reimburse Board members for lodging 
in the metropolitan Washington, DC, area. However, lodging may be 
necessary to take full advantage of a conference.

Other Expenses for Official Activities

    The FCA will reimburse Board members for the usual and reasonable 
expenses incurred as a consequence of official activities in the 
Washington, DC, metropolitan area and in other locations. The Agency 
will allow the repayment of expenses for:
    1. Transportation costs;
    2. Meal costs;
    3. Registration fees or other fees assessed for attendance or 
participation;
    4. The cost of miscellaneous supplies needed to participate in a 
particular function or activity; and
    5. Other costs we incur by participating in official activities.
    The Agency will not allow reimbursement of expenses for official 
activity incurred on behalf of other persons, including relatives, 
except as provided in the Board policy on Official Function 
(Representation and Reception) Expenses.

Form of Payment

    Board members will arrange for official travel using the Agency's 
travel management system whenever possible. Although Board members may 
use cash to pay for official travel expenses and seek repayment from 
the Agency afterwards, whenever possible, the preferred method of 
payment will be the use of the Government-issued credit card for all 
official travel expenses.

Receipts

    When filing claims for reimbursement of travel expenses, Board 
members will provide receipts for expenses as normally required of 
other FCA employees under the Federal Travel Regulation, which 
currently requires receipts for all lodging and travel expenses over 
$75. However, failure to provide a receipt as normally required is not 
grounds for denial of a claim. If a receipt is not available, Board 
members will provide a statement explaining the nature and amount of 
the expense and the reason for not having a receipt.

Combining Official Business Travel With Personal Activities

    Although it is permissible to engage in personal activities while 
on official travel, the purpose of the trip must always be the need to 
conduct official business. The Agency pays for travel and related 
expenses incurred in performing official business. However, the Agency 
may not pay for personal expenses incurred while on official travel. 
Therefore, it is important to record and allocate expenses carefully to 
ensure that official expenses are clearly differentiated from personal 
expenses. Proper handling of Agency expenses is always important, but 
particularly so when engaging in personal activities while on official 
Agency business.
    The Board is aware that, in certain circumstances, engaging in 
personal activities while on official travel could create an appearance 
that personal activities, not official business, prompted the trip. 
When Board members take a trip to conduct official business, it is 
usually clear from the nature of the business that the trip is proper 
and necessary. If there are concerns that personal activities during 
the trip might suggest otherwise, Board members will consult the DAEO 
to avoid a possible appearance of impropriety. The Board understands 
that engaging in official travel that involves a given destination (for 
example, our home state) on a disproportionate basis may raise 
questions about whether the travel truly is necessary. Again, Board 
members will consult with the DAEO about such concerns.

    Dated This 8th day of July 2011.

    By Order of the Board.

Dale L. Aultman,
Secretary to the Board.

Examination Philosophy

FCA-PS-53

    Effective Date: 08-JUL-11.
    Effect on Previous Action: Responds to NV 93-04 (15-JAN-93) and 
Amends FCA Policy Statement 53 dated 15-JUL-93; amended by NV-11-15 (8-
JUL-11).

    Source of Authority: Sections 5.9 and 5.19 of the Farm Credit 
Act of 1971, as amended.

The Farm Credit Administration (FCA or Agency) Board Hereby Adopts the 
Following Policy Statement

    This policy provides a general philosophy and direction for the 
examination and oversight of the Farm Credit System (System).
    The FCA Board provides for the examination and supervision of each 
System institution in accordance with the Farm Credit Act of 1971, as 
amended (the ``Act''). The Board fulfills this responsibility primarily 
through the Office of Examination (OE). The FCA fulfills its 
supervision and examination responsibilities for Farmer Mac, a separate 
government-sponsored enterprise, through its Office of Secondary Market 
Oversight. OE develops oversight plans, conducts examinations, monitors 
the System's condition, current and emerging risks,

[[Page 54641]]

and develops supervisory strategies to ensure that the System operates 
in a safe and sound manner and fulfills its public policy purpose. The 
Act also provides that the Farm Credit System Insurance Corporation 
(FCSIC) Board of Directors should utilize FCA examiners to conduct 
examinations of System institutions, to the extent practicable.

Oversight and Examination

    The FCA Board directs the maintenance of a ``risk-based'' approach 
to oversight and examination for System institutions, which maximizes 
OE's effectiveness and strategically addresses the System's safety and 
soundness and compliance with laws and regulations. The amount of 
examination resources devoted to a System institution and the scope of 
an examination will depend on an institution's ability to identify and 
manage its risks. Accordingly, oversight and examination efforts will 
be heightened and accompanied by appropriate preventive, corrective, or 
enforcement actions when institutions are unable or unwilling to 
address material unsafe and unsound practices or comply with law and 
regulations. This risk-based approach is critical to maintaining 
shareholder, investor, and public confidence in the financial strength 
and future viability of the System.

Examination Staff and Communications

    The risk-based approach must promote effective communications with 
System institutions. Examiners are an essential communication link with 
System institutions through ongoing institution oversight, on-site 
examinations, meetings with boards and management, and written reports 
and correspondence. The examination program shall therefore maintain 
adequately trained examiners who understand the unique risks and 
opportunities of agriculture, maintain an appropriate level of 
regulatory and financial industry experience and skills, and 
communicate and work effectively with System institutions to ensure 
they remain safe and sound and able to fulfill their public policy 
purpose.

Reporting to the FCA Board

    Annually, the Chief Examiner will provide the Board an annual 
oversight and examination plan (plan) for approval. This plan will:
     Assess the condition of and risks affecting the System at 
large and in specific institutions;
     Establish priorities and identify staffing, training, and 
budgetary needs;
     Include an examination schedule that ensures statutory 
requirements are met; and,
     Include operational objectives and strategies for meeting 
the plan.
    The Chief Examiner will report semi-annually to the Board on the 
status of, and proposed adjustments to, the plan. The Chief Examiner 
will also report quarterly on the current condition of the Farm Credit 
System, emerging risks, and any necessary follow-up strategies.

    Dated This 8th Day of July 2011.

    By Order of the Board.

Dale L. Aultman,
Secretary to the Board.

Regulatory Philosophy

FCA-PS-59

    Effective Date: 08-JUL-11.
    Effect on Previous Action: Originally adopted BM-17-FEB-94-02 (see 
59 FR 32189, June 22, 1994); see also 60 FR 26034, May 16, 1995; 
amended by NV-11-15 (8-JUL-11).

    Sources of Authority: Farm Credit Act of 1971, as amended; 12 
U.S.C. 2001 et seq.

The Farm Credit Administration (FCA) Board Hereby Adopts the Following 
Policy Statement

    The FCA shall develop regulations consistent with its authorities 
under the Farm Credit Act of 1971 (Act), as amended, and other relevant 
statutes. It is the FCA Board's philosophy to (1) promulgate 
regulations that are necessary to implement the law; (2) support 
achievement of the Farm Credit System's (System) public mission; and 
(3) ensure the System's safety and soundness.
    The FCA Board will strive to create an environment that promotes 
the confidence of customers and shareholders, investors, Congress, and 
the public in the System's financial strength and future viability. The 
FCA Board believes that safe and sound operations of System 
institutions will instill: (a) Investor confidence in System debt 
securities, which helps ensure that adequate funds are available at 
reasonable rates; and, (b) shareholder/member confidence in each 
cooperatively owned System institution by ensuring that sufficient 
financial resources are maintained to support an adequate supply of 
credit and other services to its shareholders/members in both good and 
bad times.
    FCA will give high priority to issues that enable the System to 
more effectively accomplish its mission and to those issues that pose 
significant risks to the successful operation of the System, with the 
intent of ensuring an adequate and flexible flow of money into rural 
areas. As such, the FCA Board intends to provide System institutions 
with the flexibility consistent with changes in law, agriculture, and 
rural America so institutions can offer high quality, reasonably priced 
credit and related services to farmers, ranchers, their cooperatives, 
rural residents, and other entities upon which farming operations are 
dependent.
    The strategies for accomplishing the Board's regulatory philosophy 
are as follows:
    1. We will develop regulations based on a reasoned determination 
that benefits of any proposed regulation justify its cost.
    2. We will focus our regulatory efforts on issues that address 
identified risks in System institutions or enhance the ability of 
System institutions to better meet the needs of agriculture and rural 
America. Preambles to regulations will explain the rationale for the 
regulatory approach adopted.
    3. We will utilize diverse approaches to encourage public 
participation in the development and review of regulatory proposals in 
appropriate circumstances.
    4. We will emphasize the cooperative principles of a farmer-owned 
Government-sponsored enterprise by advancing regulatory proposals that 
encourage farmer- and rancher-borrowers to participate in the 
management, control, and ownership of their institutions.
    5. We will work to eliminate unnecessary regulations that impair 
the ability of the System to accomplish its mission to serve 
agriculture and rural America and any regulations that are unduly 
burdensome, costly, or not based on the law.
    The details of how the FCA will implement these strategies will be 
described in the Agency's Five-Year Strategic and Annual Performance 
Plans and in its Unified Agenda.
    Semi-annually, the Director of the Office of Regulatory Policy 
(ORP) will provide the Board a proposed Unified Agenda for approval. 
The Unified Agenda will describe the regulatory projects the Agency 
plans to work on during the next 12 month period and apply the 
principles and strategies reflected in this policy. Quarterly, the ORP 
Director will report to the Board on the status of, and proposed 
adjustments to, regulatory projects scheduled on the Unified Agenda.

    Dated this 8th Day of July 2011.

    By Order of the Board.

Dale L. Aultman,
Secretary to the Board.

[[Page 54642]]

Equal Employment Opportunity Programs and Diversity

FCA-PS-62

    Effective Date: 08-JUL-11.
    Effect on Previous Action: Updates FCA-PS-62 [BM-13-JUL-06-03] (71 
FR 46481, 8/14/2006) 7-13-06; amended by NV-11-15 (08-JUL-11).

    Sources of Authority: Title VII of the Civil Rights Act of 1964, 
as amended (42 U.S.C. 2000e et seq.); Age Discrimination in 
Employment Act (29 U.S.C. 621 et seq.); Rehabilitation Act of 1973, 
as amended (29 U.S.C. 721 et seq.); Equal Pay Act of 1974 (29 U.S.C. 
206(d)); Civil Service Reform Act of 1978 (5 U.S.C. 3112); 
Notification and Federal Employee Antidiscrimination and Retaliation 
Act of 2002 (NO FEAR Act) (5 U.S.C. 2301); Genetic Information 
Nondiscrimination Act of 2008 (42 U.S.C. 2000ff et seq.);); section 
5.9 of the Farm Credit Act of 1971, as amended (12 U.S.C. 2243); 
Executive Order 11478 (Equal Employment Opportunity in the Federal 
Government), as amended by Executive Orders 13087 and 13152 to 
include prohibitions on discrimination based on sexual orientation 
and status as a parent; Executive Order 13166 (Improving Access to 
Services for Persons with Limited English Proficiency); 29 CFR part 
1614; Equal Employment Opportunity Commission Management Directives.

Purpose

    The Farm Credit Administration (FCA or Agency) Board reaffirms its 
commitment to Equal Employment Opportunity (EEO) and Diversity (EEOD) 
and its belief that all FCA employees should be treated with dignity 
and respect. The Board also provides guidance to Agency management and 
staff for deciding and taking action in these critical areas.

Importance

    Unquestionably, the employees who comprise the FCA are its most 
important resource. The Board fully recognizes that the Agency draws 
its strength from the dedication, experience, and diversity of its 
employees. The Board is firmly committed to taking whatever steps are 
needed to protect the rights of its staff and to carrying out programs 
that foster the development of each employee's potential. We believe an 
investment in efforts that strongly promote EEOD will prevent the 
conflict and the high costs of correction for taking no, or inadequate, 
action in these areas.

The Farm Credit Administration (FCA) Board Adopts the Following Policy 
Statement

    It is the policy of the FCA to prohibit discrimination in Agency 
policies, program practices, and operations. Employees, applicants for 
employment, and members of the public who seek to take part in FCA 
programs, activities, and services will be treated fairly. FCA, under 
the appropriate laws and regulations, will:
     Ensure equal employment opportunity based on merit and 
qualification, without discrimination because of race, color, religion, 
sex, age, national origin, disability, sexual orientation, status as a 
parent, genetic information, or participation in discrimination or 
harassment complaint proceedings;
     Provide for the prompt and fair consideration of 
complaints of discrimination;
     Make reasonable accommodations for qualified applicants 
for employment and employees with physical or mental disabilities under 
law;
     Provide an environment free from harassment to all 
employees;
     Create and maintain an organizational culture that 
recognizes, values, and supports employee and public diversity and 
inclusion;
     Develop objectives within the Agency's operation and 
strategic planning process to meet the goals of EEOD and this policy;
     Implement affirmative programs to carry out this policy 
within the Agency; and
     To the extent practicable, seek to encourage the Farm 
Credit System to continue its efforts to promote and increase 
diversity.

Diversity and Inclusion

    The FCA intends to be a model employer. That is, as far as 
possible, FCA will build and maintain a workforce that reflects the 
rich diversity of individual differences evident throughout this 
Nation. The Board views individual differences as complementary and 
believes these differences enrich our organization. When individual 
differences are respected, recognized, and valued, diversity becomes a 
powerful force that can contribute to achieving superior results. 
Therefore, we will create, maintain, and continuously improve on an 
organizational culture that fully recognizes, values, and supports 
employee diversity. The Board is committed to promoting and supporting 
an inclusive environment that provides to all employees, individually 
and collectively, the chance to work to their full potential in the 
pursuit of the Agency's mission. We will provide everyone the 
opportunity to develop to his or her fullest potential. When a barrier 
to someone achieving this goal exists, we will strive to remove this 
barrier.

Affirmative Employment

    The Board reaffirms its commitment to ensuring FCA conducts all of 
its employment practices in a nondiscriminatory manner. The Board 
expects full cooperation and support from everyone associated with 
recruitment, selection, development, and promotion to ensure such 
actions are free of discrimination. All employees will be evaluated on 
their EEOD achievements as part of their overall job performance. 
Though staff commitment is important, the role of supervisors is 
paramount to success. Agency supervisors must be coaches and are 
responsible for helping all employees develop their talents and give 
their best efforts in contributing to the mission of the FCA.

Workplace Harassment

    It is the policy of the FCA to provide a work environment free from 
unlawful discrimination in any form, and to protect all employees from 
any form of harassment, either physical or verbal. The FCA will not 
tolerate harassment in the workplace for any reason. The FCA also will 
not tolerate retaliation against any employee for reporting harassment 
or for aiding in any inquiry about reporting harassment.

Disabled Veterans Affirmative Action Program (DVAAP)

    A disabled veteran is defined as someone who is entitled to 
compensation under the laws administered by the Veterans Administration 
or someone who was discharged or released from active duty because of a 
service-connected disability.
    The FCA is committed to increasing the representation of disabled 
veterans within its organization. Our Nation owes a debt to those 
veterans who served their country, especially those who were disabled 
because of service. To honor these disabled veterans, the FCA shall 
place emphasis on making vacancies known to and providing opportunities 
for employing disabled veterans.

Responsibilities

    The Chairman and Chief Executive Officer (CEO) is ultimately 
responsible for developing and carrying out all EEOD requirements and 
initiatives in accordance with laws and regulations to fulfill 
diversity initiatives in approved program plans.

[[Page 54643]]

    To help in fulfilling these responsibilities the CEO, or designee, 
will fill the following positions:
     EEO Director and, as appropriate, EEO Coordinator(s);
     Special Emphasis Program Managers required by law or 
regulation;
     EEO Counselors; and
     EEO Investigators.
    Persons in these positions will perform their duties as specified 
by the CEO or designee and as required by law or regulation. The Head 
of each Agency office will make such persons available upon request 
from the EEO Director.
    The CEO or EEO Director may also establish standing committees to 
deal with specific issues as they arise.
    Dated this 8th day of July 2011.

    By Order of the Board.

Dale L. Aultman,
Secretary to the Board.

Rules for the Transaction of Business of the Farm Credit Administration 
Board

FCA-PS-64

    Effective Date: 08-JUL-11.
    Effect on Previous Action: Originally adopted by NV-94-05 (07-FEB-
94)[FCA-PS-58]; corrected by memo 09-FEB-94; amended by NV-95-03 (13-
JAN-95)[FCA-PS-64]; amended by NV-95-18 (20-MAR-95); amended by NV-95-
46 (9-AUG-95); amended by BM-24-OCT-95-02; amended by NV-95-69 (02-JAN-
96). See also 58 FR 6633, Feb. 1, 1993 and 59 FR 17537, Apr. 13, 1994; 
reaffirmed by NV-96-22 (30-MAY-96); amended by NV-96-36 (26-AUG-96); 
amended by NV-98-16 (8-MAY-98); amended by NV-99-09 (16-MAR-99); 
amended by NV-99-25 (24-SEP-99); amended by NV-11-15 (8-JUL-11).

    Source of Authority: Sections 5.8, 5.9, 5.10, 5.11 and 5.17 of 
the Farm Credit Act of 1971, as amended.

The Farm Credit Administration (FCA) Board Hereby Adopts the Following 
Policy Statement

Rules for the Transaction of Business of the Farm Credit Administration 
Board

Purpose, Scope, and Definitions
    Section 1. Purpose and Scope. These Rules adopted under Sec.  
5.8(c) of the Farm Credit Act of 1971, as amended (Act), concerning the 
transaction of business of the Farm Credit Administration (FCA) Board 
(Board) supplement the statutes and regulations that govern the 
procedures and practice of the Board (including, without limitation, 
the Act, the Sunshine Act, and FCA regulations, 12 CFR 600 et seq.). 
Unless otherwise provided in these Rules, or relevant statutes or 
regulations, this Board will transact its business in accordance with 
Robert's Rules of Order (Newly Revised) (most recent edition).
    Section 2. Definitions, Reporting Relationships, and Performance 
Appraisals.
     ``Act'' means the Farm Credit Act of 1971, as amended.
     ``Board Member'' means each of the three individuals 
appointed by the President, by and with the advice and consent of the 
Senate, to serve as Members of the Board, including the Chairman, 
unless the context requires otherwise. Each Board Member appraises the 
performance of his or her staff.
     ``Board Member Staff'' means those employees reporting 
directly to a Board member such as executive or special assistants, and 
who are organizationally located within the Office of the Board.
     ``Chairman'' means the Board Member designated by the 
President to serve as Chairman of the Board. The Chairman also serves 
as the Agency's Head and Chief Executive Officer (CEO). After 
consultation with the other Board Members, the Chairman appraises the 
performance of the Secretary, Equal Employment Opportunity Director, 
Designated Agency Ethics Official, Chief Operating Officer, and all 
Office Directors reporting directly to him or her.
     ``Designated Agency Ethics Official'' (DAEO) means an 
employee of the FCA designated by the Head of the Agency to administer 
the provisions of Title I of the Ethics in Government Act of 1978, to 
coordinate and manage the Agency's ethics program, and to provide 
liaison with the Office of Government Ethics on all aspects of FCA's 
ethics program. The DAEO reports directly to the Chairman on the 
Agency's ethics program.
     ``Equal Employment Opportunity (EEO) Director'' means an 
employee of the FCA designated by the Head of the Agency to administer 
the provisions of the Agency's EEO program as set forth in 29 CFR part 
1614.
     ``General Counsel'' (GC) means an employee of the FCA who 
serves as the chief legal officer of the Board. The GC reports to the 
Chairman concerning administrative matters and to the FCA Board on 
matters of Agency policy. By the nature of the position the GC, as 
appropriate and necessary, maintains special advisory relationships in 
confidence with the individual Board Members. The GC must also keep the 
FCA Board fully informed of all litigation in which the Agency is 
involved.
     ``Inspector General'' (IG) means an appointed head of the 
Office of Inspector General (OIG), an independent component of the FCA, 
established by and responsible for adhering to the IG Act of 1978, as 
amended. The purpose of the IG is to promote economy, efficiency and 
effectiveness, and to prevent and detect fraud and abuse in the 
programs and operations of FCA.
     ``Office Director'' means an employee of the FCA serving 
as head of an FCA Office, excluding the Inspector General unless 
specified.
     ``Secretary'' means an employee of the FCA who serves as 
Secretary to the Board as appointed by the Chairman. The Secretary, or 
another FCA employee designated by the Chairman, serves as the 
parliamentarian for the Board. The Secretary keeps permanent and 
complete records and minutes of the acts and proceedings of the Board.
     ``Sunshine Act'' means the Government in the Sunshine Act, 
5 U.S.C. 552b.

Amendments

    Section 1. The business of the Board will be transacted in 
accordance with these Rules, which may be amended from time to time: 
Provided, however, that upon agreement of at least two Board Members 
convened in a duly called meeting, the Rules may be waived in any 
particular instance, except that action may be taken on items at a 
Special Meeting only in accordance with part I, Article I, Sec.  3(b) 
of this policy.
    Section 2. These Rules may be changed or amended by the concurring 
vote of at least two Board Members upon notice of the proposed change 
or amendments having been given at least thirty days before such vote.
    Section 3. These Rules will be reviewed by the Board at least every 
five years or as needed.
    Section 4. The Secretary to the Board is hereby delegated authority 
to make technical, syntactical, and grammatical changes to any Board 
Policy, provided a redlined complete copy of the policy(ies) is given 
to each Board member that clearly details each change made at least 30 
days prior to the effective date of the change. Any Board member may, 
within the 30 day period, stop the proposed changes(s) and, if a Board 
member so desires, put forth the matter for Board consideration.

Part I--Rules for the FCA Board Meetings

Article I. Board Meetings.
Article II. Board Action.
Article III. Board and Chairman Delegations.

[[Page 54644]]

Article I

Board Meetings

    Section 1. Sunshine Act. All FCA Board meetings will be announced 
and conducted in conformance with the Government in the Sunshine Act.
    Section 2. Presiding Officer. The Chairman will preside at each 
meeting. In the event the Chairman is unavailable, the other Board 
Member from the Chairman's political party will preside. If there is no 
other Board Member from the Chairman's political party, the Board 
Member serving the longest on the Board will preside.
    Section 3. Calls and Agenda.
    (a) Regular Meeting. The Secretary, at the direction of the 
Chairman, issues a call for items for the agenda to the other Board 
Members and the Office Directors of FCA. The Secretary provides to the 
Chairman a list of all the items submitted, including a list of 
outstanding notational votes and matters voted ``not appropriate for 
notational vote.'' The Chairman then establishes the agenda to be 
posted on the Agency's public notice board or on its public Web site at 
least 1 week before the meeting. The agenda will also be published in 
the Federal Register at least 3 calendar days before the meeting date. 
At each meeting, the Board votes to approve or amend the agenda 
established by the Chairman. The Board may amend the agenda to add 
items that the Board Members believe need to be considered at that 
meeting.
    (b) Special Meeting. Special meetings of the Board may be called:
    (1) By the Chairman; or
    (2) By the other two Board Members; or
    (3) If there is at the time a vacancy on the Board, by a single 
Board Member.
    Any call for a Special Meeting will specify the business to be 
transacted and state the place and time of such meeting. No business 
will be brought before a Special Meeting that has not been specified in 
the notice of call of such meeting without the unanimous consent of all 
Board Members.
    (c) Notice. The Secretary will give appropriate notice of any and 
all meetings and make the call for Special meetings. Reasonable efforts 
to provide such notice to Board Members will be made for all meetings 
of the Board, but failure of notice will in no case invalidate a 
meeting or any action taken during that meeting.
    Section 4. Board Materials. The Secretary will distribute complete 
Board Meeting Books to each Board Member and their staff at least three 
full business days before any Regular Meeting. There may be instances 
when the proposed Board meeting agenda approved by the Chairman may 
need to be amended prior to a Board meeting to include items that 
require Board action. In such instances the Secretary will update the 
Board meeting books with the newly approved item(s) and make the 
required Sunshine Act disclosures and notices as soon as possible. 
However, unless agreed to by all Board Members, no vote may be taken on 
an issue unless the necessary material has been provided to the Board 
Members not less than twenty-four hours before the meeting to consider 
such issue.
    Section 5. Supporting Documentation. The Secretary will maintain 
one copy of all Board Meeting Book material. All copies of the Board 
Meeting Book material for Closed Sessions provided to anyone other than 
the Secretary will be returned to the Secretary for disposal or 
maintained in a secure location approved by the Secretary. One copy of 
each Executive Summary provided to a Board Member will be provided to 
and maintained by the Secretary. Board Meeting Books and Executive 
Summaries are not part of the minutes of the Board unless expressly 
incorporated therein.
    Section 6. Telephone Conference. Any Board Member, including the 
Chairman, may participate in a meeting of the Board through the use of 
conference call telephone or similar equipment, provided that all 
persons participating in the meeting can simultaneously speak to and 
hear each other. Any Board Member so participating will be deemed 
present at the meeting for all purposes.
    Section 7. Public Attendance.
    (a) Attendance. Members of the public may attend all meetings of 
the Board except those meetings or portions of meetings that are closed 
as directed by the Board, consistent with the Sunshine Act.
    (b) Public Appearances before the Board. While members of the 
public are invited and encouraged to attend Board meetings, no member 
of the public has a right to speak in a Board meeting. However, the 
Board may, in its sole discretion, permit a member of the public to 
address the Board if he or she provides a written request and statement 
covering the intended subject matter at least fifteen days before the 
meeting.
    Section 8. Minutes.
    (a) Format. The format of minutes of the Board meetings, unless 
otherwise stated in these rules or relevant statutes or regulations, 
will comply with the most recent edition of Robert's Rules of Order and 
the Sunshine Act. The minutes will clearly identify the date, time, and 
place of the meeting, the type of meeting held, whether the meeting was 
open or closed, the identity of Board Members present and, where 
applicable, that they participated by telephone, and the identity of 
the Secretary and the GC in attendance, or, in their absence, the names 
of the persons who substituted for them. The minutes will contain a 
separate paragraph for each subject matter and will note all main 
motions or motions to bring a main motion before the Board, except any 
that were withdrawn. The minutes will not contain any reference to 
statements made unless a request is specifically made that a statement 
be made a part of the minutes, or if required by the Sunshine Act. The 
minutes of meetings will indicate the substance and disposition of any 
notational votes completed since the last meeting. Except in the case 
of a voice vote, the Secretary will record the vote of each Board 
Member on a question or will note a unanimous consent. The Chairman and 
the Secretary will sign the minutes of the Board meeting, indicating 
the date of approval by the Board.
    (b) Circulation. The Chairman and GC will review draft minutes. The 
Secretary will circulate draft minutes to all Board Members at least 
one week before their consideration at a Board Meeting. The Secretary 
will place in all Board Meeting Books copies of the minutes of the 
meetings of the Board to be voted on at a Board Meeting.

Article II

Board Action

    Section 1. Affirmative Vote Required. Action on any matter requires 
the affirmative vote of at least two Board Members, except as provided 
in Article III, Sec.  1 of this part.
    Section 2. Records of Board Action.
    (a) Meetings. The vote of each Board Member, including the 
Chairman, on a question voted on at a meeting will be recorded in the 
minutes. The Chairman may, if there is no objection, call for a voice 
vote on adjournment or other actions. If a voice vote is taken, its 
result will be recorded in the minutes.
    (b) Notational Votes. The Secretary will provide a summary of any 
action taken by notational vote to the Board Members and Chairman and 
the action taken will be reflected in the minutes of the next meeting 
of the Board.
    Section 3. Notational Voting.
    (a) Nothing in these Rules precludes the transaction of business by 
the circulation of written items (notational votes) to the Board 
Members.
    (b) The Board may use notational voting procedures to decide any 
matter

[[Page 54645]]

that may come before it. Any Board Member may submit a motion to the 
Secretary for distribution as a notational vote. However, in view of 
the public policy of openness reflected in the Sunshine Act and the 
desire to allow any Board Member to present viewpoints to the other 
Board Members, any Board Member can veto the use of the notational 
voting procedure for the consideration of any particular matter by 
voting ``not appropriate for notational vote.''
    (c) Upon submission of an item for notational vote, the Secretary 
will provide each Board Member a complete package of all relevant 
information and a notational vote ballot specifying the Board Member 
making the motion, the motion itself, and the deadline for return of 
the ballot. Within ten business days of receipt, or earlier if the 
motion requires, each Board Member will act on the matter by returning 
the ballot to the Secretary. Each Board Member is to indicate his/her 
position in writing on the ballot in the following manner: (1) Approve, 
(2) disapprove, (3) abstain, or (4) not appropriate for notational 
vote.
    (d) No partial concurrences or amendments are permitted; however, a 
Board Member may suggest a revision to the proponent of the motion, 
subject to compliance with the Sunshine Act, and the proponent may 
withdraw his or her motion at any time before receipt by the Secretary 
of all the ballots of all Board Members or the end of the time period 
provided for on the ballot.
    (e) A Board Member who is absent from the office may authorize a 
staff member to initial the ballot for him/her, provided that the Board 
Member has a designation memorandum on file with the Secretary.
    Section 4. Board Records. The Secretary will maintain the records 
of the Board including, without limitation, the minutes of the Board 
meetings and notational votes.

Article III

Board and Chairman Delegations

    Section 1. Two Vacancies/Authority to Act. In the event two Board 
Members are not available by reason of recusal, resignation, temporary 
or permanent incapacitation, or death, to perform the duties of their 
offices, the Board hereby delegates to the remaining Board Member the 
authority to exercise, in his/her discretion, the authorities of the 
FCA granted to the Agency or the Board by statute, regulation or 
otherwise, except those authorities which are non-delegable. This 
delegation of authority does not include authority to establish general 
policy and promulgate rules and regulations, or any delegation 
expressly prohibited by statute. This delegation will include but is 
not limited to the exercise of the following powers:
    (a) The approval of actions of the Farm Credit System (System) 
institutions that are required by statute, regulations or otherwise to 
be approved by the FCA or its Board;
    (b) The exercise of all powers of enforcement granted to the FCA by 
statute, including but not limited to, the authorities contained in 12 
U.S.C. 2154, 2154a, 2183, 2202a, and 2261-2274; and
    (c) Any actions or approvals required in connection with the 
conduct of a receivership or conservatorship of a System institution.
    Authorities delegated by this Section may be re-delegated, in 
writing, at the discretion of the remaining Board Member, to other FCA 
officers or employees.
    Section 2. National Security Emergencies. Pursuant to Executive 
Order 12656, as amended, in the event of a national security emergency, 
if the Chairman is unable to perform his or her duties for any reason, 
the Chairman, at his or her sole discretion, delegates to the following 
individuals, in the order mentioned and subject to being available, the 
authority to exercise and perform all the functions, powers, authority 
and duties of the Chairman in an acting capacity until such time as 
either the Chairman can resume his/her position or, if no longer able 
to serve as Chairman, the President of the United States designates a 
new Chairman:
    (a) Member of the Board of the Chairman's political party;
    (b) If there is no other Board Member from the Chairman's political 
party, the Board Member serving the longest on the Board;
    (c) General Counsel.
    The Chairman or Acting Chairman will ensure that FCA has an 
alternative location for its headquarters functions in the event a 
national security emergency renders FCA's headquarters inoperative. The 
Chairman or Acting Chairman may establish such branch office or offices 
of the FCA as are necessary to coordinate its operations with those of 
other government agencies.
    Section 3. Individual Assignments. To the extent consistent with 
law, the Board or the Chairman may offer another Member of the Board a 
special assignment and define the duties incident thereto, and the 
Chairman may delegate to another Board Member certain duties and 
responsibilities of the Chairman.
    Section 4. Other Delegations. The FCA Board may delegate such 
authorities as it deems necessary and appropriate. Such delegations are 
included in Attachments A and B to this policy.

Part II--Board and Staff Governance

Article I. Board Governance.
Article II. Staff Governance.

Article I

Board Governance

    Section 1. General. The purpose of this part is to ensure the 
efficient operation of the FCA in light of the various authorities and 
operational responsibilities of Board and the FCA Chairman and CEO.
    The Board recognizes that for the Agency to run efficiently, the 
Chairman/CEO must have sufficient latitude and discretion to direct the 
implementation of Board policies and run the Agency's day-to-day 
affairs. Notwithstanding such latitude, the other Board Members must 
have access to staff and must be able to request information from staff 
that they find necessary to fulfill their policy- and rulemaking 
responsibilities under the Act.
    The Chairman/CEO is always free to bring to the Board issues that 
do not require Board action. Conversely, the Board may involve itself 
in operational matters ordinarily reserved for the Chairman/CEO if it 
concludes that they rise to the level of policy due to their 
sensitivity, seriousness, or controversial nature.
    Section 2. Board Authorities. The Board, acting as a unit, must 
manage, administer, and establish policies for the FCA. The Board 
specifically approves the rules and regulations implementing the Act; 
provides for the examination, enforcement, and regulation of System 
institutions; provides for the performance of all the powers, 
functions, and duties vested in the FCA; and requires any reports 
deemed necessary from System institutions. The Board also adopts the 
FCA seal. Each Board Member has the authority to appoint and direct 
regular, full-time staff in his or her immediate office.
    Section 3. Chairman Authorities. The Chairman, in carrying out his 
or her responsibilities, is governed by the general policies adopted by 
the Board and by such regulatory decisions, findings, and policy 
determinations as the Board may by law be authorized to make.
    The Chairman, in carrying out policies as directed by the Board, 
acts as spokesperson for the Board and represents the Board and the FCA 
in official relations within the Federal

[[Page 54646]]

Government. Under policies adopted by the Board, the Chairman must 
consult on a regular basis with the Secretary of the Treasury 
concerning the exercise of the System's powers under Sec.  4.2 of the 
Act; the Board of Governors of the Federal Reserve System concerning 
the effect of System lending activities on national monetary policy; 
and the Secretary of Agriculture concerning the effect of System 
policies on farmer, ranchers, and the agricultural economy. As to third 
persons, all acts of the Chairman will be conclusively presumed to be 
in compliance with general policies and regulatory decisions, findings, 
and determinations of the Board.
    The Chairman enforces the rules, regulations, and orders of the 
Board. The Chairman designates attorneys to represent the Agency in any 
civil proceeding or civil action brought in connection with the 
administration of conservatorships and receiverships and in civil 
proceedings or civil actions when so authorized by the Attorney General 
under provisions of title 28 of the United States Code. The Chairman, 
subject to the approval of the Board, may establish one or more 
advisory committees in accordance with the Federal Advisory Committee 
Act.
    The Chairman may not delegate any of the foregoing powers without 
prior Board approval.
    The Chairman also exercises those powers conferred on the Head of 
the Agency, including the power to make certain designations.
    Section 4. CEO Authorities. The Chairman of the FCA Board is also 
the Agency's CEO. The CEO, in carrying out his or her responsibilities, 
directs the implementation of policies and regulations adopted by the 
Board and, after consultation with the Board, executes the 
administrative functions and duties of the FCA.
    ``Consultation with the Board'' is achieved when the Chairman/CEO 
makes a good faith attempt to seek advice, guidance, and input from the 
Board before taking significant action on matters related to the 
execution of administrative functions or duties.
    The Chairman as CEO runs the day-to-day operations of the Agency. 
This includes the power to implement the policies and regulations 
adopted by the Board, appoint personnel as necessary to carry out 
Agency functions, set staff pay and benefits and direct staff. As 
provided in Sec.  5.11(b) of the Act, the Chairman/CEO appoints heads 
of major administrative divisions subject to the approval of the Board. 
In accordance with the IG Act, the IG is appointed by the FCA Board.
    The Chairman as CEO may designate to other FCA officers and 
employees the authority to exercise and perform those powers necessary 
for the day-to-day management of the Agency.

Article II

Staff Governance

    Section 1. Authority over Staff. The Chairman/CEO has authority to 
hire the personnel necessary to carry out the mission of the Agency and 
to direct staff, except that each Board Member is entitled to appoint 
and direct his or her regular, full-time staff within the constraints 
of the adopted budget for the Office of the Board.
    Subject to the approval of the Board, the Chairman/CEO appoints and 
removes the ``heads of major administrative divisions.'' The Board 
defines the ``heads of major administrative divisions'' as all Office 
Directors who are career appointees. The Board must approve the 
conversion of an existing career position to a non-career (political) 
position. In accordance with the IG Act, a removal of the IG may only 
be made upon the written concurrence of a \2/3\ majority of the FCA 
Board.
    Section 2. Organization Chart. Consistent with its mandate to 
approve regulations and appointments outlined above, the Board approves 
the FCA organizational chart down through the Office level along with 
relevant functional statements for each Office. Authority to make 
organizational changes within any division rests with the Chairman/CEO, 
and may be delegated to the Chief Operating Officer or Office 
Directors. In accordance with the IG Act, the IG has personnel 
authority for the Office of the Inspector General.

Part III--Board Operations

Article I. Committee and Financial Operations, and Other Activities.
Article II. Board Member Travel and Related Expenses.

Article I

Committee and Financial Operations, and Other Activities

    Section 1. Committee Operations. To assist the Board in exercising 
its authority for oversight and approval of the Strategic Plan, the 
formulation of regulations and policy, and the monitoring and 
assessment of risk, the Board directs the formation of three 
committees.
    Each Committee Chair will be designated by the Chairman. Each 
committee will be comprised of the Board Members' Executive Assistants 
and such Agency staff as determined by the Committee Chair. The 
Committee Chair will designate a Coordinator with expertise in, or 
significant accountability for, the activities of the committee. 
Committees will meet as often as determined by the Committee Chair to 
achieve committee objectives. The Chairman may also approve the use of 
external consultants to assist the committees on an as-needed basis.
    (a) Strategic Planning Committee. The objective of this committee 
is to provide a forum for Board input on (1) the development of, and 
periodic updates to, the Strategic Plan, and (2) changes in processes 
and procedures that will improve the quality of this key Agency 
document.
    (b) Regulation and Policy Development Committee. The objective of 
this committee is to provide a forum to (1) obtain Board input 
throughout the entire process of developing, modifying, or eliminating 
individual regulations, (2) discuss changes in processes and procedures 
that will improve the Agency's regulation and policy development 
process, and (3) foster open discussion during the development and 
periodic update of the Agency's regulatory agenda.
    (c) Risk Committee. The objective of this committee is to provide a 
forum to (1) facilitate Board awareness of risks to the ongoing mission 
fulfillment and safety and soundness of the System and Farmer Mac, (2) 
ensure an integrated and coordinated Agency risk analysis process that 
effectively uses information from a wide variety of internal and 
external sources, and (3) foster open discussion about risks to the 
System and Farmer Mac and the implications of such risks for future 
Agency operations.
    Section 2. Financial Operations.
    (a) Budget Approval. The Chairman, consistent with the provisions 
of the Act, other law and regulations, and applicable policy, oversees 
the development of budget proposals and causes the expenditure of funds 
within approved budgets to meet the Agency's mission and objectives. 
The Board approves an object class budget for the Agency as a whole and 
a budget for each office. Any reallocation of funds in excess of 
$100,000 requires FCA Board approval. Reallocation of funds of $100,000 
or less requires the Chairman's approval (or that of the Chairman's 
designee). The Chief Financial Officer (CFO) will provide a monthly 
report to the Board on all budgetary reallocations that occur after the 
FCA Board approves a fiscal year budget. The CFO will also provide a 
quarterly budget report to the Board that discusses actual performance 
of the budgeted items. The quarterly

[[Page 54647]]

report may be presented during regular Board meetings or during a Board 
briefing.
    The IG, in accordance with the IG Act, transmits a budget estimate 
specifying an aggregate amount for OIG operations, OIG training needs, 
and amounts for support of the Council of the Inspectors General on 
Integrity and Efficiency.
    Section 3. Other Board Operations.
    (a) Audit Resolution Process. The Chairman is responsible for 
overseeing the audit resolution process and, through a designee, for 
audit resolution implementation and follow-up. However, the Chairman 
must obtain Board approval of audit resolutions where the issue would 
normally require Board action. The Inspector General and Audit Follow-
up Official will report to the Board the status of any unresolved audit 
recommendations, unimplemented management decisions, and other issues 
on a semiannual basis following the Inspector General's Semi-Annual 
Report to Congress.
    (b) Litigation. The Chairman has authority to undertake litigation 
to defend the Agency, consistent with established Board policy. The 
Board will approve litigation where the Agency is plaintiff, will 
approve recommendations to the Justice Department to pursue an appeal, 
and will approve positions advanced in litigation that conflict with 
existing Board policy or establish a significant new policy. The 
Chairman's authority to settle certain claims against the Agency have 
been delegated to the GC provided the GC consults with the Chairman.
    (c) Documents and Communications.
    (1) Approval, Review, and Consultation. The FCA Board is 
responsible for determining the Agency's position on policy. Board 
Policy Statements should be reviewed at least every five years.
    The Board must approve all documents published in the Federal 
Register, including proposed and final FCA regulations, except for 
notices of effective dates or technical corrections of regulations. 
Board approval is not necessary prior to Federal Register publication 
of Privacy Act systems notices or notices of other routine or 
administrative matters unless they raise policy issues requiring Board 
approval. Bookletters, informational memoranda, and other mass mailings 
to Farm Credit institutions (except documents listed in Attachment A) 
must be approved by the Board prior to distribution. Documents may be 
added to or deleted from Attachment A by Board approval.
    The issuance of a ``no action'' letter is a policy matter requiring 
Board approval. For the purposes of this statement, a ``no action'' 
letter is a statement to a Farm Credit institution that, 
notwithstanding any other provision of law or regulation, the Board 
will take no action against a System institution solely because it 
engaged in conduct specified in the letter.
    Authority to promulgate internal administrative issuances, 
including FCA Policies and Procedures Manual (PPM) issuances, rests 
with the Chairman and may be delegated to the Chief Operating Officer. 
The Chairman will provide the Board with final drafts of PPM issuances 
and other administrative issuances for an appropriate consultative 
period if those issuances relate to examination and supervision, 
audits, internal controls, the budget, the strategic planning process, 
regulation development, or personnel matters relating strictly to 
promotion or pay.
    (2) Signature Authority. Authority to sign official Board 
documents, including, but not limited to, proposed and final 
regulations, Federal Register notices, no-action letters, minutes, and 
other Board actions is delegated to the Secretary. After any action by 
the Board required under paragraph (c)(1) of this section, the Chairman 
has the authority to sign bookletters, informational memoranda, and 
other mass mailings to Farm Credit institutions. This signature 
authority may be delegated to senior staff members.
    (3) Correspondence. The Chairman approves and signs routine 
correspondence (that is, correspondence in the ordinary course of 
business), to members of Congress, correspondence responding to White 
House referrals, or other correspondence on behalf of the Board or the 
Agency. The Chairman may delegate approval and signature authority for 
such correspondence to the Chief Operating Officer or FCA Office 
Director when the subject matter involves congressional or White House 
case work. When the subject matter involves the presentation of an 
Agency position or policy relative to regulations, legislation, or any 
other significant matter, the Chairman may not delegate authority, and 
the correspondence must be approved by the Board, except that the Board 
need not approve a previously approved response or a restatement of 
previously adopted Board policy. Board approval does not apply when the 
Chairman is speaking only for him- or herself and includes the 
appropriate disclaimer. Likewise, on similar matters, Board Members 
should include appropriate disclaimers. The Chairman or the Chairman's 
designee has authority to sign acknowledgments or interim responses 
without Board approval, provided such responses contain no policy 
statements or only previously approved statements.
    (4) Authentication and Certification of Records and Documents. The 
Chairman designates the person authorized and empowered to execute, 
issue and certify under the seal of the FCA:
     Statements authenticating copies of, or excerpts from 
official records and files of the FCA;
     Effective periods of regulations, orders, instructions, 
and regulatory announcements on the basis of the records of the FCA;
     Appointment, qualification, and continuance in office of 
any officer or employee of the FCA, or any conservator or receiver 
acting in accordance with the FCA receivership regulations at 12 CFR 
part 627 on the basis of the records of the FCA.
    The Chairman may further empower the designated official(s) to sign 
official documents and to affix the seal of the FCA thereon for the 
purpose of attesting the signature of officials of the FCA.

Article II

Board Member Travel and Related Expenses

    Section 1. Pre-confirmation Travel. Travel expenses incurred by an 
FCA Board nominee that are solely for the purpose of attending his or 
her Senate confirmation hearings will be considered the personal 
expense of the nominee and will not be reimbursed by FCA. However, 
consistent with existing Government Accountability Office 
interpretations, the FCA will pay for a nominee's travel expenses to 
the Washington, DC metropolitan area (including lodging and 
subsistence), if payment is approved, in advance whenever practicable, 
by the Chairman based on a determination that the nominee's travel is 
related to official business that will result in a substantial benefit 
to the FCA. That determination will be made on a case-by-case basis and 
is within the sole discretion of the Chairman. The same standards and 
policies that apply to the reimbursement of Board Members' travel 
expenses will apply to the reimbursement of nominee's expenses. As part 
of the documentation for the approval process, the Chairman must 
execute a written finding that a nominee's travel would substantially 
benefit the FCA.
    Travel that may result in substantial benefit to the FCA could 
include meetings, briefings, conferences, or other similar encounters 
between the nominee and FCA Board Members, office directors, the Chief 
Operating Officer, or other senior congressional

[[Page 54648]]

and executive branch officials, for the purpose of developing 
substantive knowledge about the FCA, its role, its interaction with 
other Government entities, or the institutions that it regulates. 
Meetings or briefings of this nature may enable a nominee to more 
quickly and effectively assume leadership at the Agency after 
confirmation by the Senate and could thus substantially benefit the 
Agency.
    Section 2. Board Member Relocation. Notwithstanding the provisions 
of Sec.  5.8(d) of the Act, Board Members will be reimbursed by FCA for 
travel and transportation expenses incurred in connection with 
relocation to their first official duty station in accordance with the 
provisions of the Federal Travel Regulations (FTR). Board Members will 
be issued a specific prior written authorization by the Chief Human 
Capital Officer detailing the expenses that may be reimbursed under the 
current FTR.
    Section 3. Representation and Reception Fund. Section 5.15(a) of 
the Act allows the payment of FCA funds for official representation and 
reception expenses. Expenses incurred from official functions may be 
paid for with funds from the Representation and Reception (R&R) Fund 
only under this policy statement and decisions from the Department of 
Justice or guidance from the Comptroller General of the United States 
(Comptroller General).
    ``Official functions'' include meetings and other contacts with the 
public to explain or further the Agency's mission and typically are 
activities of the FCA Board, individual Board Members, or other FCA 
officials acting for the Board. For example, while extending official 
courtesies to the public on occasions associated with the mission of 
the Agency, FCA staff may use the R&R Fund to cover catering services, 
rental of facilities, receptions, coffee, snacks, refreshments, 
supplies, services and tips.
    Consistent with opinions of the Comptroller General, the FCA Board 
has determined, as a matter of policy, that it will not permit the R&R 
Fund to be used for events or functions in which attendance is 
restricted to Agency employees.
    Similarly, the R&R Fund may not be used for activities relating 
solely to ``personal entertainment'' (interpreted by the Comptroller 
General to include attendance at a sporting event or concert, for 
example) or for personal favors, even if the entertainment is enjoyed 
with, or is a favor given to, members of the public, such as Farm 
Credit System representatives.
    The FCA Board has determined, as a matter of policy, that the R&R 
Fund shall be a fund of last resort and shall not be used for expenses 
that can properly be classified as another type of Agency expense.
    The FCA Board will decide how much to budget for the R&R Fund. The 
FCA Board will approve any amount available for R&R expenses for the 
Chairman and each Board Member, and an amount available for general R&R 
expenses. The amount approved for use by the Chairman and each Board 
Member will be maintained in their budget code. The amount approved for 
general R&R will be maintained in a separate budget class code by the 
Secretary.

    Dated this 8th day of July 2011.

    By Order of the Board.

Dale L. Aultman,
Secretary to the Board.

Attachment A

FCA Communications

Part 1--Mass Communications That Do Not Require Review by the FCA Board 
Prior to Distribution to Farm Credit System Institutions

    1. Issuances or revisions to:
     The FCA Examination Manual, examination criteria, and 
examination procedures;
     The FCA Uniform Call Report instructions;
     Examination plans and general guidance provided to 
examiners, except those relating to Agency positions not previously 
approved by the Board.
    2. Requests for information on:
     Call Reports, LARS, or similar data requests;
     Young, beginning, and small farmers and ranchers reports;
     Other reports as required by statute or determined 
necessary by the Board (consistent with Board instruction).
    3. Information that is being provided on:
     Fraudulent activities;
     Removals/suspensions/prohibitions;
     Other related activities.
    4. Documents that have been issued by other Federal agencies 
including regulations, official staff commentary on regulations, and 
forms;
    5. FCA Handbook updates;
    6. Annual Report of Assessments and Expenses under 12 CFR 607.11;
    7. Office of Inspector General mailings for official purposes;
    8. Vacancy Announcements;
    9. PPM mailings.

Part 2--Mass Communications That Contain the Following Matters Require 
Review by the FCA Board Prior to Distribution to Farm Credit System 
Institutions

    1. Agency policy;
    2. Agency legal interpretations;
    3. Substantive Agency positions on examination, corporate or 
accounting;
    4. No-action positions;
    5. Any communication listed in part 1 containing any of the matters 
listed in part 2 would also require review by the FCA Board prior to 
distribution.

Attachment B

Delegations

    1. The FCA Board delegates to the Chairman the authority to:
    a. Sign letters notifying the Chairman of the Boards of Farm Credit 
System institutions of final approval for any approved corporate 
application, after all conditions for final approval have been met and 
in accordance with applicable procedures;
    b. Execute and issue under the FCA seal the new charter or charter 
amendment document for such institutions; and
    c. Sign certificates of charter after new charters and charter 
amendments are executed.
    The Chairman may re-delegate the authority in item ``a'' to other 
FCA officers or employees as needed.
    2. The FCA Board delegates to the Chairman the authority to approve 
(preliminary and final) corporate applications from associations 
requesting to merge or consolidate provided the applications are deemed 
noncomplex, noncontroversial, and low risk. Applications for mergers or 
consolidations approved under authority of Sec.  7.8 of the Act will be 
considered noncomplex, noncontroversial, and low risk if they meet all 
of the following criteria:
    a. The applicant association(s) has a current FIRS rating of 1, 2, 
or 3 (with no 3-rated association having a formal enforcement action);
    b. The continuing or resulting association(s) has a gross loan 
volume of $500 million or less;
    c. The application(s) is consistent with the Act and regulations 
governing its approval, and
    d. There are no policy or precedent-setting decisions embedded in 
the request.
    3. The FCA Board delegates to the Chairman the authority to 
approve, execute, and issue under the seal of the FCA, amendments to 
charters requested by Farm Credit associations, limited to name changes 
and/or headquarters

[[Page 54649]]

relocations. The Chairman may redelegate this authority to other FCA 
officers or employees. However, all official charters or charter 
amendments must be signed by the Chairman and the Secretary and may not 
be delegated to other staff.

Release of Consolidated Reporting System Information

FCA-PS-65

    Effective Date: 08-JUL-11.
    Effect on Previous Action: None. See 60 FR 15921, Mar. 28, 1995; 
amended by NV-11-15 (08-JUL-11).

    Source of Authority: 12 CFR part 621, subpart D; Freedom of 
Information Act, 5 U.S.C. 552; 12 CFR part 602; OMB Circular A-130 
(Nov. 28, 2000).

The Farm Credit Administration (FCA) Board Hereby Adopts the Following 
Policy Statement

    Purpose: The FCA Board has adopted a policy to disclose reports of 
condition and performance (Call Reports) and any subsequent reports 
containing nonexempt information that are produced from the FCA's 
Consolidated Reporting System (CRS) [hereinafter nonexempt CRS 
reports]. For purposes of this policy, nonexempt CRS reports are 
defined as reports produced from the CRS containing information that 
has been routinely disclosed in Farm Credit System (System) 
institutions' quarterly and annual financial reports and filed with the 
FCA.
    The nonexempt CRS reports include the Uniform Performance Report 
(UPR), Uniform Peer Performance Report (UPPR), Six-Quarter Trend 
Report, Six-Year Trend Report, and Institution Comparison Report. Under 
this policy, the Call Reports and subsequent reports for the 
institution that submitted the information will be available to that 
institution on the FCA Web site approximately 35 days after the end of 
a quarter or a fiscal year.
    Objectives: The FCA facilitates the competitive delivery of 
financial services to agriculture while protecting the public, the 
taxpayer, and the investor. Consistent with that mission, the FCA 
endeavors to provide information to System institutions and to the 
public. Call Reports and other nonexempt CRS reports contain 
information of value to the Agency, the System, and the public that 
enables an evaluation of the financial condition of a System 
institution in comparison to its peers. This information will provide 
institutions with a succinct assessment of performance, in addition to 
that provided in the examination process. The FCA believes that 
implementation of this policy statement will enhance the FCA's 
information management activities in an efficient, effective, and 
economical manner consistent with OMB Circular A-130.
    Operating Principles: Certain information reported to the Agency in 
compliance with Call Report instructions and not routinely disclosed by 
an institution, such as asset and liability repricing schedules or loan 
specific data, will continue to be exempt from disclosure and the FCA 
will not make it available under this policy statement.
    Availability of Reports: All nonexempt CRS reports will be 
available within 45 days after the end of a quarter or a fiscal year 
free of charge on the FCA Web site.
    The FCA often receives special requests for new reports containing 
nonexempt CRS information not produced from the CRS. Consistent with 
the Freedom of Information Act, the FCA will grant such special 
requests when the record is readily reproducible with reasonable 
efforts. We will assess fees to recover the direct costs of complying 
with the request, including the cost of collecting, processing, and 
disseminating the information. The FCA may grant a request for a fee 
waiver to an educational institution, a researcher, a governmental 
agency, a newspaper, and others, when the benefit derived from 
releasing the information exceeds the waived fee. Requests should be 
directed to the Office of Management Services.
    Delegated Authority: The Director, Office of Management Services, 
in concurrence with the Director, Office of Examination, and the 
General Counsel, is responsible for implementing this policy statement, 
developing operating procedures, and assessing requests for fee 
waivers. Any of these responsibilities may be re-delegated to 
appropriate staff in their respective offices.
    Reporting Requirements: The Director, Office of Management 
Services, shall report annually to the Chief Executive Officer on the 
number of special requests for new reports containing nonexempt CRS 
information and fees received.

    Dated this 8th day of July 2011.

    By Order of the Board.

Dale L. Aultman,
Secretary to the Board.

FCS Building Association Management Operations Policies and Practices

FCA-PS-68

    Effective Date: 08-JUL-11.
    Effect on Previous Action: Amends NV-95-40, FCA-PS-68-7-JUL-95; 
amended by NV-11-15 (08-JUL-11).


    Source of Authority: Farm Credit Act of 1971, as amended (Act), 
and the FCS Building Association (FCSBA) Articles of Association and 
Bylaws.

The Farm Credit Administration (FCA) Board Hereby Adopts the Following 
Policy Statement

    The FCSBA was established to provide the facilities and related 
services for the FCA and its field offices. The FCSBA is owned by the 
banks of the Farm Credit System (banks) and is funded by assessments, 
rental income from commercial tenants, and other income. The original 
ownership interest of each bank was based on the bank's assets as a 
percentage of total Farm Credit System (FCS) assets on June 30, 1981. 
The FCSBA owns and operates the FCA headquarters in McLean, Virginia, 
and holds the leases and provides certain services and furnishings for 
FCA field offices. The FCA Board has sole discretionary authority under 
section 5.16 of the Act to approve the plans and decisions for such 
building and facilities. In order to carry out this authority and to 
preserve the FCA's arms-length relationship with the banks, the 
Articles of Association and Bylaws of the FCSBA grant the FCA Board the 
responsibility to oversee the affairs of the FCSBA.
    The purpose of this policy statement is to outline general 
parameters and policies for various operational practices of the FCSBA 
that are supplementary to the FCSBA Bylaws.

A. FCA Board Responsibilities

    Board Responsibilities. As outlined further in this policy 
statement, the FCA Board is responsible for items including, but not 
limited to, approval of all budgets and subsequent changes in object 
class limitations, signature authorities for financial expenditures, 
and long-term investment decisions. The FCA Board concurs in the 
development of performance standards, goals and pay scales for the 
FCSBA President as provided by the FCA Chairman and Chief Executive 
Officer (Chairman). Additionally, all contracts in excess of $150,000 
per year, or those that cover the selection of outside auditors, 
property management services or the commission of special studies with 
a cost in excess of $5,000 that were not approved during the annual 
budget process require the approval of the FCA Board.
    Chairman's Responsibilities. The Chairman shall be responsible for

[[Page 54650]]

coordinating the FCA Board's involvement in, and responsibilities for, 
the operation of the FCSBA, including: (1) Developing performance 
standards and pay scales for the President of the FCSBA and appraising 
the President's performance with the concurrence of other FCA Board 
Members, (2) reviewing periodic financial and operating reports, (3) 
providing procedures as necessary concerning the FCA staff's 
relationship with the FCSBA, and (4) reviewing such other matters as 
the Chairman may deem advisable for the purpose of bringing such 
matters to the attention of the FCA Board. The Chairman may delegate 
these responsibilities to one or more FCA staff, as he or she deems 
advisable, except those responsibilities related to pay and 
performance.

B. FCSBA President

    General Signature Authority. As required by Article V, Section 2 of 
the FCSBA Bylaws, in addition to member certificates, the FCA Board 
authorizes the FCSBA President to sign general correspondence and 
contracts deemed necessary for the administration of FCSBA activities. 
The FCSBA President must get Board approval before changing the 
signatory authority for checks and before changing any banks with which 
the FCSBA does business.
    Duties. The FCSBA President reports to the FCA Board and is 
generally responsible within the context of governing policies for all 
activities necessary to: (1) Manage FCSBA support to FCA, (2) manage 
the assets of the FCSBA, and (3) understand and consider the interests 
of the banks. Specific responsibilities include budget preparation and 
execution; planning; financial reporting and control; preparation of 
quarterly cash flow reports; supervision of inventory and supporting 
schedules for all fixed assets (furniture, fixtures and equipment); 
maintenance of management objectives schedules; supervision of the 
telecommunications system; the purchase and contracting for all 
supplies and services; records management; necessary correspondence; 
public relations activities in consultation with the FCA Office of 
Congressional and Public Affairs; personnel supervision and evaluation; 
the leasing and management of all space in the Farm Credit Building; 
site selection and lease negotiation for all FCA Field Offices; 
investment management; preparation and administration of all policies 
and operating procedures; engineering oversight; construction 
management; and preparation of all monthly, quarterly and annual 
reports required by the FCA Board. The FCSBA President shall coordinate 
these activities with the FCA Liaison as appropriate or required.
    Standard Operating Procedures. In addition to those duties outlined 
under Article V, Section 2, of the FCSBA Bylaws and this Policy 
Statement, the FCSBA President is authorized to issue Standard 
Operating Procedures (SOPs), as he or she deems appropriate, in an 
effort to carry out the mission of the FCSBA provided that each SOP is 
reviewed by the FCA Board in advance. The President shall maintain all 
SOPs in a manner that reflects current policies and practices. SOPs 
will be filed with the Secretary to the Board, the FCSBA and others as 
requested.
    Periodic Reports. The FCSBA President shall submit such periodic 
reports and proposals to the FCA Board and Liaison as may be necessary 
to facilitate budgets, assessments, audits, finances, plans, 
investments, reserve policy and accounting procedures that support the 
needs of the FCA Board and the banks as owners of the FCSBA. The FCSBA 
President shall normally report to the FCA Board at least quarterly. At 
a minimum, the report shall include:
    1. A cash statement of operations, an explanation of budget 
variances, and month-to-date cash reconciliation report. This report 
will include specific notations of any expected reallocations of funds 
requiring Board approval.
    2. A status of all projects/building improvements that are planned, 
including current accounting of actual costs of each project.
    3. A summary of the status of reserve accounts and investments 
including documentation as available demonstrating compliance with 
investment policies.
    4. A comprehensive Management Objectives tracking report outlining 
the status of issues and projects resulting from a combination of one 
or more sources such as audit and examination recommendations, FCA 
Board directives, as well as management initiatives.
    5. Other matters such as insurance, leasing and contract 
performance issues that may be timely for the particular reporting 
period.
    Annual Report. The FCSBA President shall prepare an annual report 
on the operations of the FCSBA. The draft of the report shall be 
provided to the FCA Board for its review within approximately 30 days 
of receiving the final report from the independent auditors. After FCA 
Board review, the report shall be provided to the banks and may be 
provided to others who have an interest in FCSBA affairs. Although 
other reports to the banks may be warranted from time to time, the 
Annual Report shall serve as the primary report to the FCS. The report 
shall include:
    1. A discussion of significant issues and accomplishments.
    2. Audited financial statements and reportable conditions.
    3. A discussion of the previous year's and current year's budget.
    4. A discussion of basic and supplemental services provided to FCA 
by the FCSBA including an estimate of market and actual values of those 
services.
    5. A discussion of non-budgeted expenditures, that have been 
reimbursed by the FCA.

C. FCA Liaison

    Duties. The FCA Chief Executive Officer appoints the Liaison to the 
FCS Building Association. The FCA Liaison facilitates and coordinates 
the FCA's needs with the FCSBA in such areas as office renovations, 
internal moves, telecommunications services, field office support, and 
matters concerning building security and Emergency Preparedness. The 
FCA Liaison provides an internal control function through the 
countersigning of certain categories of checks as designated by the FCA 
Board. Additionally, the FCA Liaison reviews FCSBA proposals that come 
before the FCA Board, and provides counsel regarding issues on which 
the FCA Board must decide or provide direction. The FCA Liaison is also 
responsible for assuring that FCA operations, as appropriate, comply 
with FCSBA policies and practices as well as FCA guidance relating to 
the FCSBA. Finally, the FCA Liaison shall review monthly cash 
reconciliation reports as provided by the FCSBA President and report 
irregularities, as appropriate.

D. Annual Audit and Management Controls

    Annual Audit and Management Controls Review. As provided by Article 
IV, Section 9, of the FCSBA Bylaws, the FCSBA shall produce audited 
financial statements on an annual basis. A review of material internal 
control procedures shall be included in the audit process on a periodic 
basis.

E. Financial Management

    Budget Philosophy. It is FCA Board policy to ensure that every 
effort is made to minimize operating expenses without jeopardizing the 
banks' investment in the assets that are managed. Approved budgets are 
planned and implemented in consideration of a series of policy

[[Page 54651]]

objectives as outlined in this statement and always in an effort to 
balance income and expenses.
    Budget Development Time Frames. FCSBA budgets are prepared on a 
calendar year basis. Each November 1, the FCSBA President shall provide 
the proposed budget for the next calendar year to the FCA Board for its 
review and comment. With FCA Board concurrence, the proposed budget may 
be made available to the banks for further comment.
    Operating Revenues. The FCSBA receives annual operating revenues 
from (1) bank assessments, (2) office rental income from private 
commercial tenants, (3) other income from operating balances, and (4) 
reserve account transfers as necessary.
    Operating Expenses. Operating expenses are budgeted using the 
appropriate object classifications as follows, which may be modified 
with FCA Board approval:

FCA Field Office Rent,
Taxes and Contract Services,
Maintenance and Repair,
Utilities,
Salaries and Benefits,
Professional and Consulting Fees,
Property Management Fees,
Other Expenses.

    As a part of the draft budget proposal to the FCA Board on or 
before November 1st every year, the FCSBA President shall provide an 
individual expense breakdown for each item within the object class. 
This breakdown shall include the actual expense from the previous year, 
the estimated expense for the current year, and the projected expense 
for the proposed year. Unanticipated and emergency expenses during the 
course of the year as well as expenditures beyond amounts approved for 
object classes may be funded out of the operating reserve subject to 
FCA Board approval.
    Capital expenditures funded by transfers from the component reserve 
account should be shown separately with a breakdown of individual 
expenditures.
    Operating Reserves. In consideration of liquidity needs as well as 
unanticipated expenses, each approved budget shall include the sum 
equivalent to 15 percent of the annual operating expense as operating 
reserves.
    Component Reserve Account. To reserve for capital replacement items 
and repairs to the McLean facility, the FCSBA shall maintain a 
component reserve account which is separate from operating funds and 
reserves. The funding for this account shall be initially based on the 
Capital Reserve Study of June 1, 2005, which is then to be updated 
every 10 years by an independent engineering assessment. The policy 
objective is to ensure adequate funding, on a net present value basis, 
to cover up to a 10-year capital repair and replacement program to be 
updated, as necessary, with each approved budget.
    Assessments. To ensure the maintenance of minimum ``cash on hand,'' 
FCSBA assessments are based on bank assets as of June 30, and issued 
quarterly consistent with the FCSBA Bylaws. After taking interest, 
rental, and other revenue into consideration, budgeted annual 
assessments must be sufficient to fund the operations of the FCSBA, 
including the ability to hold operating reserves equal to 15 percent of 
expenses as well as component reserves consistent with FCSBA policy.
    Adjustments to assessments can occur subject to FCA Board approval 
when total year end ``cash and cash equivalents'' exceed or are below 
operating and component reserve requirements. Adjustments are normally 
considered for third quarter assessments and are based upon the 
previous year's audited financial statements. Earnings, if any, are 
distributed through this process in lieu of direct payment.
    Investments. The FCSBA invests its funds in an effort to achieve 
maximum yield consistent with liquidity needs and investment safety. 
For short-term accessibility, operating reserves and other operating 
``cash on hand'' may be invested in short-term money market accounts, 
certificates of deposits of Federally insured institutions, and short-
term instruments of the U.S. Government or commercial paper rated P-1 
or A-1 by Moody's and Standard and Poor's, respectively. Operating 
reserves investment decisions are made by the FCSBA President 
consistent with this policy.
    With the goal of achieving the best long-term returns while 
minimizing risk, component reserves are invested solely in instruments 
backed by the U.S. Government and agencies of the U.S. Government. The 
maturities and amounts of component reserve investments shall be 
generally consistent with the anticipated liquidity needs of the FCSBA 
capital replacement and repair program. Component reserve investment 
decisions require FCA Board approval.
    Budgeting for Reimbursable Expenses. The FCA regularly reimburses 
the FCSBA for telecommunications and other expenditures on a cost 
recovery basis. Because there is no positive or negative financial 
impact on the FCSBA, these transactions are handled on a ``net'' basis 
and thus not included in the budget.
    Budget Execution. The FCSBA President shall administer the annual 
budget as approved by the FCA Board. Expenditures during the course of 
the year that would exceed the object class budget require prior FCA 
Board approval. Exceptions to this policy are made in the event of 
emergency or the funding of accrued employee benefits. Expenditures in 
these cases will be brought to the FCA Board in the form of an 
Executive Summary for approval within 10 business days of occurrence. 
In considering its approval, the FCA Board has the option of either 
adjusting other object classes, utilizing the operating reserve, or 
taking other action, as it deems appropriate.

F. Contract Management

    General. In accordance with Article IV of the FCSBA Bylaws, it is 
the policy of the FCA Board that all contracts issued on or on behalf 
of the FCSBA be:
    1. Competitively bid with a minimum of three bids, when in excess 
of $15,000.
    2. Obtained with a minimum of three price quotes, when less than 
$15,000, and more than $2,500.
    3. Generally awarded to the lowest bidder meeting contract 
specifications except in those instances where the differences in cost 
are considered negligible relative to a particular benefit offered by a 
higher bid.
    4. Reviewed and approved by the FCA Board when in excess of the 
amount of $150,000, or for the purpose of outside auditors, property 
managers, or special studies that were not approved during the budget 
process.
    5. Retained in file a minimum of 3 years.
    6. When possible, bid in conjunction with the budget year.
    Exceptions. Notwithstanding the above requirements, the FCA Board 
has the authority to make exceptions, as it deems appropriate to the 
circumstances. Additionally, competitive bidding is not required if the 
circumstances warrant immediate resolution or are vendor specific to 
equipment, in which case the FCSBA President will provide the FCA Board 
with a detailed report of the surrounding circumstances in 10 business 
days.
    Contract Timeframes. Recurring contracts are normally for annual 
terms; however, when deemed cost effective, the FCSBA may allow terms 
up to 3 years. Obtaining best and final offers from bidders is 
encouraged.
    Approval Authorization. The FCSBA President is authorized to 
approve contracts consistent with these guidelines and the FCSBA SOP. 
The

[[Page 54652]]

FCSBA President may re-delegate up to $50,000 of contracting authority 
to the building property manager.
    Contract Performance. The FCSBA President shall insure that 
adequate systems are in place to measure, administer, and report on the 
performance of FCSBA contracts.

G. Asset Management

    Personal Property. The FCSBA President shall insure that adequate 
methodologies and systems are in place to ensure that FCSBA property is 
effectively accounted for on a periodic basis.

H. The FCSBA as a System Institution

    Examination. The FCSBA is examined as provided by the Act. The 
scope of examination shall be generally consistent with the level of 
risk deemed associated with the operating practices of FCSBA 
management.
    Assessments for Examination. The FCSBA will be charged annually for 
assessments consistent with FCA regulation found in 12 CFR 607.4, 
``Assessment of other System entities.''
    Liquidation by System Request. Should the Boards of the banks 
adopt, pursuant to Article IX of the FCSBA Articles of Association, a 
resolution to dissolve and liquidate the FCSBA, the dissolution and 
liquidation will be subject to, and conducted in accordance with, the 
Act and the regulations promulgated thereunder.

I. FCSBA Services to the FCA

    Basic Services. The FCSBA provides space to the FCA headquarters in 
McLean, Virginia, and leases space on behalf of FCA for its field 
offices. Basic services provided to the FCA are similar to what is 
typical of rented office space and include, but are not limited to, 
such items as utilities, janitorial service, repairs for normal wear 
and tear, parking and appropriate landscaping as well as amenities 
which are available to all tenants and have the effect of maintaining 
property values and/or enhancing rental income.
    Supplemental Services. In addition to providing basic services, the 
FCSBA will, on a case-by-case basis, provide certain supplemental 
support services related to FCA's housing needs under the following 
kinds of circumstances:
    1. The FCSBA can provide the service on better terms than the FCA.
    2. The service, if not provided by the FCSBA, could potentially 
adversely affect the aesthetic or other value of property, systems, 
building infrastructure, the health and safety of occupants, or the 
occupancy level of commercial tenants.
    3. The capacity exists for the FCSBA to provide the service within 
the context of its employee expertise and/or its overall 
responsibilities to all tenants.
    4. By providing the service, an advantage inures to the benefit of 
the FCS that would not otherwise occur.
    5. An FCA Board determination that the service will be of 
particular benefit to the FCA, the FCS or the public.
    As deemed necessary, the FCSBA President shall issue SOPs 
prescribing operational or other details of FCSBA services provided to 
the FCA.
    Non-Reimbursable and Reimbursable Services. Whether or not the FCA 
will reimburse the FCSBA for a supplemental service will generally be 
determined as follows:
    1. Reimbursement is not required for support provided by the FCSBA 
when resources are available within FCA Board approved budgets for the 
FCSBA and one or more of the criteria for supplemental services 
expenditures outlined above have been met.
    2. Unless otherwise determined by an FCA Board action, supplemental 
support services requiring resources beyond that available within the 
FCSBA budget will require reimbursement.
    Reimbursements in excess of $10,000 that occur on an ongoing basis 
will require a written Memorandum of Understanding between the FCA and 
the FCSBA outlining the terms and conditions of the services provided 
and reimbursement. One time or minor recurring reimbursements may be 
handled by purchase orders. Reimbursable expenses shall be determined 
on an actual cost basis or a recognized methodology to achieve the goal 
of fully reimbursing the FCSBA on the transaction.

    Dated this 8th day of July 2011.

    By Order of the Board.

Dale L. Aultman,
Secretary to the Board.

Disaster Relief Efforts by Farm Credit Institutions

FCA-PS-71

    Effective Date: 08-JUL-11.
    Effect on Previous Action: Supersedes FCA Bookletter 368-OE, 
September 14, 1993. See 61 FR 37471, July 18, 1996; amended by NV-11-15 
(08-JUL-11).

    Source of Authority: Section 5.17 of the Farm Credit Act of 
1971, as amended.

The Farm Credit Administration (FCA) Board Hereby Adopts the Following 
Policy Statement

    The FCA recognizes that in the aftermath of hurricanes, floods, 
droughts, or other natural or man-made disasters, specific sections of 
the country or segments of the agricultural community are declared to 
be disaster areas. Such disaster area declarations may be made by the 
President of the United States, the Governor of a State, or a specific 
Federal or State government agency. When a disaster area includes a 
rural community where a Farm Credit institution is located or does 
business, the institution can be affected in two ways: directly, such 
as by physical damage to the institution itself or incapacitation of 
employees; or indirectly, such as by damage suffered by individuals and 
businesses with loans from the institution. In the interest of 
providing the highest quality and most efficient service to 
agricultural borrowers, the FCA encourages Farm Credit institutions 
operating in disaster-affected areas to work within their communities 
to help alleviate pressures on borrowers under stress.
    When conducted in a reasonable and prudent manner, the efforts of 
Farm Credit institutions to work in the public's interest with 
borrowers in the disaster areas will be considered consistent with safe 
and sound business practices. It is the FCA's belief that the 
institutions have considerable flexibility under the existing 
regulations to provide appropriate disaster relief. Such relief efforts 
may include, but would not necessarily be limited to, extending the 
terms of loan repayment or restructuring a borrower's debt obligations. 
In addition, a Farm Credit institution may consider easing some loan 
documentation or credit-extension terms for new loans to certain 
borrowers or requesting the FCA to grant relief from specific 
regulatory requirements. It is the FCA's belief that the principal 
objectives of any disaster assistance program developed by a Farm 
Credit institution and approved by its board should be to:
    1. Provide necessary and timely relief to disaster-affected 
customers of the institution;
    2. Minimize the adverse effects of the disaster on the 
profitability, financial condition, operating efficiency, and morale of 
customers, as well as on the institution;
    3. Review applicable statutory and regulatory requirements and 
determine whether requesting the FCA to provide exceptions from 
regulatory requirements would be appropriate; and
    4. Promote, through such consideration and actions, the Farm Credit 
System's mandate to provide American farmers and ranchers with sound, 
adequate, and constructive credit and closely related services.
    The FCA further believes that proper risk controls and management 
oversight

[[Page 54653]]

should be exercised to ensure that such efforts serve the interests of 
the lending institution as well as those of the community. Any 
institution providing disaster relief should document such relief 
actions as well as any significant departures from otherwise applicable 
institution policies and procedures.
    The aforementioned objectives and risk controls are conditions and 
characteristics on which the FCA will evaluate an institution's relief 
activities. These objectives and risk controls should be set forth in 
any request to the FCA for specific regulatory relief.
    The FCA also recognizes that conditions related to a disaster may 
impair an institution's ability to comply in a timely way with 
regulatory reporting and publishing requirements. Farm Credit 
institutions should contact the Director of the Office of Examination 
when relief from specific regulatory or reporting requirements is 
needed.
    Additionally, the Board of Governors of the Federal Reserve System 
(Federal Reserve Board) has, from time to time, granted relief from 
certain Regulation Z requirements to consumers located in declared 
disaster areas. It is likely that the Federal Reserve Board will 
continue to promulgate similar temporary exceptions in disaster-
affected areas. When this occurs, the FCA will, as a matter of 
convenience, continue to notify the Farm Credit institutions affected 
by Regulation Z exceptions.

    Dated this 8th day of July 2011.

    By Order of the Board.

Dale L. Aultman,
Secretary to the Board.

Financial Institution Rating System (FIRS)

FCA-PS-72

    Effective Date: 08-JUL-11.
    Effect on Previous Action: Amended by NV-11-15 (08-JUL-11).

    Source of Authority: Sections 5.9 and 5.17 of the Farm Credit 
Act of 1971, as amended.

The Farm Credit Administration Board Hereby Adopts the Following Policy 
Statement

I. Policy

    The Financial Institution Rating System (FIRS) shall be the rating 
system used by Farm Credit Administration (FCA or Agency) examiners for 
evaluating and categorizing the safety and soundness of Farm Credit 
System (System) institutions on an ongoing, uniform, and comprehensive 
basis.
    The FIRS will provide valuable information to the Agency for 
assessing risk and allocating resources based on the safety and 
soundness of regulated institutions. Ratings assigned to regulated 
institutions will be adjusted periodically so that they accurately 
reflect the condition of institutions.

II. Standards and Implementation

    Based on the conclusions reached in the ongoing examination of an 
institution's financial, managerial, and operational condition, FCA 
examiners will assign ratings to each of the rating factor components 
and assign a composite rating that reflects the condition and overall 
safety and soundness of the System institution. These ratings shall be 
reported to the institution's Board of Directors and Chief Executive 
Officer.
    Component and composite ratings are assigned on a 1 to 5 numerical 
scale. A 1-rating indicates the strongest performance and management 
practices and the least degree of supervisory and regulatory concern, 
while a 5-rating indicates an extremely high, immediate or near-term 
probability of failure and unsatisfactory management practices and, 
therefore, the highest degree of concern.
    Although each institution has its own examination and supervisory 
issues and concerns, the FIRS is structured to evaluate all significant 
financial, asset quality, and management factors common to all System 
institutions. Examination criteria for each of the rating components 
are defined in the FCA Examination Manual, which is available to the 
public. The FCA Examination Manual also incorporates the evaluative 
criteria under which component and composite ratings are assigned.

Composite Rating

    The FIRS provides a general framework for assimilating and 
evaluating all significant financial, managerial, and operational 
factors to assign a composite rating to each System institution. The 
composite rating is based on a qualitative and quantitative analysis of 
the factors comprising each of the following components, the 
interrelationships among components, and the overall level of concern 
for those risks that affect a System institution.
    The composite rating does not assume a predetermined weight for 
each component nor does it represent an arithmetic average of assigned 
component ratings. The weight given to any individual component in 
determining composite ratings varies depending on the degree of concern 
associated with the component and the threat posed to the overall 
safety and soundness of the institution.

Component Ratings

    Listed below is a brief description of the FIRS components and the 
more common evaluative criteria and factors considered under each 
component.
     Capital--A System institution is expected to maintain 
capital and capital management practices commensurate with the nature 
and extent of risks to the institution and the ability of management to 
identify, measure, monitor, and control these risks. The capital 
component is based on an evaluation of an institution's capacity to 
absorb losses and provide for future growth. An evaluation of capital 
relies on many factors such as regulatory capital requirements, trends, 
portfolio and institutional risk, growth, adequacy of risk funds, 
management capability, and other factors as appropriate.
     Assets--This component is based on an assessment of both 
the quality of the current portfolio and the quality of the associated 
risk management processes that substantially impact the quality of 
assets. An assessment of assets relies on many factors such as loan 
portfolio management, investment portfolio management, loan portfolio 
trends, risk identification processes, credit administration, allowance 
for loan losses, and other factors that affect the quality, 
performance, income producing capacity, and stability of assets.
     Management--The management component is based on an 
assessment of board and management performance against all factors 
considered necessary to operate the institution within accepted banking 
practices and in a safe and sound manner in accordance with applicable 
laws, regulations, and guidelines.
     Earnings--This component is based on an evaluation of the 
quantity, quality, and sustainability of the institution's earning 
performance. An evaluation of earnings considers factors such as the 
level of earnings, composition and quality of net income, stability of 
earnings performance, relationship to portfolio risk, quality of 
earnings management, and other factors as deemed appropriate.
     Liquidity--The liquidity component is based on an 
evaluation of an institution's capacity to promptly meet the demand for 
payment of its obligations, fund its loan portfolio, and readily meet 
the reasonable credit needs of the territory served. An evaluation of 
liquidity also considers continued access to funding, the existence of 
secondary sources of liquidity, and other factors as deemed 
appropriate.

[[Page 54654]]

     Sensitivity--This component reflects the degree to which 
changes in interest rates may affect earnings or the market value of an 
institution's equity. An evaluation of this component considers such 
factors as the size and complexity of the institution's financial 
activities, the level of interest rate risk exposure relative to 
capital and earnings, investment and derivatives activities, 
management's ability to identify, measure, monitor, project, and 
control interest rate risk, and other factors as deemed appropriate.

III. Responsibility

    It is the responsibility of the Chief Examiner to ensure that the 
components used to support the composite ratings are reviewed 
periodically to make certain they reflect the material matters that 
impact the safety and soundness of institutions. In this respect, the 
Chief Examiner shall make recommendations to the FCA Board to add or 
delete components as necessary. Specific evaluative criteria and 
factors for determining component and composite ratings shall be 
established by the Chief Examiner and incorporated in the FCA 
Examination Manual or by other means as appropriate. The Chief Examiner 
is responsible for ensuring that ratings assigned to institutions are 
commensurate with and accurately reflect the risk in the institutions.

IV. Reporting

    At least quarterly, the Chief Examiner will provide the FCA Board a 
report of the composite rating of all FCS institutions.

V. Implementation

    System institutions examined after the date this policy is adopted 
by the FCA Board will be assigned composite and component ratings in 
accordance with this Policy Statement.

    Dated this 8th day of July 2011.

    By Order of the Board.

Dale L. Aultman,
Secretary to the Board.

Borrower Privacy

FCA-PS-77

    Effective Date: 08-JUL-11.
    Effect on Previous Action: Amended by NV-11-15 (08-Jul-11).

    Source of Authority: Section 5.9 of the Farm Credit Act of 1971, 
as amended.

The Farm Credit Administration (FCA) Board Hereby Adopts the Following 
Policy Statement

    The Farm Credit Administration Board believes that each Farm Credit 
System institution has an affirmative and continuing obligation to 
respect the privacy of its customers and to protect the security and 
confidentiality of those customers' nonpublic personal information. 
Since 1972, FCA regulations have required that borrower information be 
held in strict confidence by Farm Credit institutions, their directors, 
officers and employees. Our regulations at 12 CFR part 618, subpart G 
specifically restrict Farm Credit institution directors and employees 
from disclosing information not normally contained in published reports 
or press releases about the institution or its borrowers or members. 
These regulations also provide Farm Credit institutions clear 
guidelines for protecting their borrowers' nonpublic personal 
information. Particularly since Farm Credit institutions are owned and 
directed by the farmers, ranchers and cooperatives who borrow from 
them, the privacy and security of customer information is vital to the 
System's continued dependability and long-term success. Therefore, the 
FCA Board strongly encourages each System institution to regularly 
inform their customers of the institution's obligation to protect 
nonpublic personal information.
    Additionally, rapid technological advances have made unauthorized 
and/or inadvertent disclosure of personal financial information more 
common and more difficult to protect against. Therefore, in addition to 
monitoring compliance with our regulations on disclosure, FCA will 
examine each System institution's internal controls on a regular basis 
to ensure that adequate safeguards are in place to protect the 
confidentiality of customer nonpublic personal information.

    Dated this 8th day of July 2011.

    By Order of the Board.

Dale L. Aultman,
Secretary to the Board.

Official Names of Farm Credit System Institutions

FCA-PS-78

    Effective Date: 08-JUL-11.
    Effect on Previous Action: Supercedes FCA-PS-63 [NV-96-22] 05/30/
96; amended by NV-11-15 (08-JUL-11).

    Source of Authority: Sections 1.3(b), 2.0(b)(8), 2.10(c), 3.0, 
5.17(a)(2)(A), 7.0, 7.6(a), 7.8(a) of the Farm Credit Act of 1971, 
as amended; 12 CFR part 611.

The Farm Credit Administration (FCA or Agency) Board Hereby Adopts the 
Following Policy Statement

Objective

    Our objective is to ensure that the public can identify a Farm 
Credit System (System) bank, association, or service corporation as 
belonging to the Farm Credit System and is not misled by the name the 
institution uses. We also believe that Farm Credit System institutions 
should have some flexibility in proposing official names for their 
institutions.

Official Names

    The FCA Board will approve an official name for a Farm Credit 
System bank,\1\ association, or service corporation that meets the 
following two requirements:
---------------------------------------------------------------------------

    \1\ Farm Credit System bank includes Farm Credit Banks, Banks 
for Cooperatives, and Agricultural Credit Banks.
---------------------------------------------------------------------------

     The name includes appropriate identification of the 
institution as a System institution; and
     The name is not misleading or inappropriate.
    Appropriate identification means the name contains either 1) the 
relevant statutory or regulatory designation, or its corresponding 
acronym, or 2) other appropriate identification as a System 
institution. Relevant statutory and regulatory designations, and their 
corresponding acronyms, are as follows:
     Agricultural Credit Bank or ACB.
     Bank for Cooperatives or BC.
     Farm Credit Bank or FCB.
     Agricultural Credit Association or ACA.
     Production Credit Association or PCA.
     Federal Land Credit Association or FLCA.
     Federal Land Bank Association or FLBA.
    Other appropriate identification as a System institution includes 
the following:
     Farm Credit Services.
     Farm Credit.
     FCS.
     A member of the Farm Credit System.
    Misleading names are those that a reasonable person might find 
confusing. For example, we would not issue a charter to an institution 
requesting a name that is the same as or similar to that of an existing 
institution because the public might find this confusing. Merely 
avoiding identical names is not enough; to minimize confusion, a 
proposed name must sufficiently distinguish an institution from other 
institutions. If the Agency had approved a charter for an institution 
using MyTown, ACA, as its official name, it would not issue a charter 
for an institution proposing ACA of MyTown or MyTown Farm Credit 
Services, ACA, as its official name. Nor would we issue

[[Page 54655]]

a charter with the phrase ``farm credit association'' as part of the 
official name, because the inevitable use of the acronym ``FCA'' would 
be confused with the name of the Agency. Also, we would not approve a 
name for an institution that could cause the public to confuse that 
institution's authorities and services with those of a commercial bank, 
thrift institution, or credit union. For example, we would not issue a 
charter to a System institution requesting the term ``national bank'' 
in its official name because this could cause confusion regarding the 
services the institution may offer.

Trade Names

    A System institution may use a trade name. The trade name must not 
be misleading. If an institution uses a trade name, it must use both 
the official and trade names in all written communications.

Related Issues

    If an ACA and its subsidiaries operate under substantially 
different names, they must clearly identify the parent/subsidiary 
relationship in all written communications. For example, if MyTown, 
PCA, is a subsidiary of EveryTown, ACA, the PCA must identify itself as 
a subsidiary of the parent ACA in its written communications.
    Please note that while the FCA cannot reserve names, the Patent and 
Trademark Office will register names under certain conditions. When 
applying for a name change or new charter, System institutions should 
submit a statement indicating whether they have applied for a trademark 
in that name.
    This statement addresses only FCA's policy. Other laws, such as 
Federal or state trademark laws, may apply. Institutions should ensure 
that their official and trade names do not infringe the trademarks or 
service marks of other companies. Institutions may wish to consult 
legal counsel to determine whether their proposed names could be 
challenged or protected under state or Federal law.

    Dated This 8th day of July 2011.

    By Order of the Board.

Dale L. Aultman,
Farm Credit Administration Board.

Consideration and Referral of Supervisory Strategies and Enforcement 
Actions

FCA-PS-79

    Effective Date: 08-JUL-11.
    Effect on Previous Action: Rescinds and supersedes the previous PS-
79; amended by NV-11-15 (08-JUL-11).

    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 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.

[[Page 54656]]

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 8th day of July 2011.

    By Order of the Board.

Dale L. Aultman,
    Farm Credit Administration Board.

    Dated: August 25, 2011.
Dale L. Aultman,
Secretary, Farm Credit Administration Board.
[FR Doc. 2011-22203 Filed 8-31-11; 8:45 am]
BILLING CODE 6705-01-P