[Federal Register Volume 79, Number 117 (Wednesday, June 18, 2014)]
[Rules and Regulations]
[Pages 34621-34622]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-14227]



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 Rules and Regulations
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  Federal Register / Vol. 79, No. 117 / Wednesday, June 18, 2014 / 
Rules and Regulations  

[[Page 34621]]



FARM CREDIT ADMINISTRATION

12 CFR Parts 611, 620, and 630

RIN 3052-AD00


Organization; Disclosure to Shareholders; Disclosure to Investors 
in System-Wide and Consolidated Bank Debt Obligations of the Farm 
Credit System; Advisory Vote

AGENCY: Farm Credit Administration.

ACTION: Final rule.

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SUMMARY: The Farm Credit Administration (FCA) adopts as final without 
change an interim final rule which amended FCA regulations to remove 
the requirement that Farm Credit System (System) banks and associations 
hold non-binding, advisory votes on senior officer compensation in 
certain circumstances.

DATES: Effective Date: June 18, 2014.

FOR FURTHER INFORMATION CONTACT:
Deborah Wilson, Associate Director, Office of Regulatory Policy, Farm 
Credit Administration, McLean, VA 22102-5090, (703) 883-4224, TTY (703) 
883-4056,
or
Laura McFarland, Senior Counsel, Office of General Counsel, Farm Credit 
Administration, McLean, VA 22102-5090, (703) 883-4020, TTY (703) 883-
4056.

SUPPLEMENTARY INFORMATION: On March 31, 2014, the FCA published the 
interim final rule (79 FR 17854) removing the FCA regulatory 
requirement that (1) associations hold non-binding advisory votes on 
senior officer compensation when 5 percent of the voting stockholders 
petition for the vote, and (2) Farm Credit banks and associations hold 
non-binding advisory votes on senior officer compensation if senior 
officer compensation increased by 15 percent or more from the previous 
reporting period (hereafter referred to as ``advisory voting 
rule'').\1\ The interim final rule responded to the provisions of Title 
VI of the Consolidated Appropriations Act, 2014 (Appropriations Act) 
\2\ and the ``Findings by Congress'' in section 5404 of the 
Agricultural Act of 2014 (Farm Bill).\3\ In adopting the interim final 
rule, the FCA explained the Appropriations Act provided that no funds 
available to the FCA during the current fiscal year may be used to 
``implement or enforce'' the advisory voting rule and the Farm Bill 
directed the FCA to review its rules to ensure they reflect 
Congressional intent that a primary responsibility of the boards of 
directors of System institutions is to oversee compensation practices.
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    \1\ See 77 FR 60582 (10/03/2012). The rule was effective 
December 17, 2012, but non-binding, advisory votes on compensation 
increases of 15 percent or more were not required until 2015 (77 FR 
76215, December 27, 2012).
    \2\ 113 Public Law 76, 128 Stat. 5 (H.R. 3547), signed by the 
President on January 17, 2014.
    \3\ 113 Public Law 79, 128 Stat. 649 (H.R. 2642), signed by the 
President on February 7, 2014.
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    The FCA received two comments on the interim final rule. In its 
comment letter, the Farm Credit Council (Council), on behalf of its 
System members, supported the FCA deleting the non-binding, advisory 
vote provisions in response to the actions taken by Congress in both 
the Appropriations Act and the Farm Bill. In its comment letter, the 
Independent Community Bankers of America (ICBA) expressed the view that 
the FCA did not need to remove the advisory vote provisions in order to 
comply with recent Congressional action and suggested that FCA modify 
the rule through a re-proposal. The ICBA asserted that neither the 
Appropriations Act nor the Farm Bill require the FCA to withdraw the 
advisory vote provisions and that a re-proposal would pose no 
compliance conflict. The ICBA comment letter also mentioned several 
times the need to allow non-binding, advisory votes at System 
institutions.
    After careful consideration of the comments, the FCA has determined 
that no changes to the interim final rule are warranted. FCA believes 
that further notice and comment rulemaking on this subject would be 
neither practical nor meaningful based on the aforementioned 
Congressional actions. We note, however, in response to the commenter 
that advisory votes are not prohibited by this rule. System 
institutions may employ advisory votes of shareholders on a variety of 
topics.
    Therefore, the FCA adopts as a final rule the interim final rule, 
which removed from parts 611, 620, and 630 the requirement for advisory 
voting. Specifically, the following non-binding advisory voting 
provisions are withdrawn:
    [ssquf] Sec.  611.100(a), defining the term ``advisory vote'';
    [ssquf] Sec.  611.360, requiring policies and procedures for non-
binding, advisory votes on senior officer compensation;
    [ssquf] Sec.  611.410, addressing non-binding, advisory votes on 
senior officer compensation;
    [ssquf] Sec.  620.5(a)(11), requiring disclosure of any advisory 
votes held during the reporting year at the institution;
    [ssquf] Sec.  620.6(c)(6), requiring disclosure (adjacent to the 
compensation table) in the annual report of a stockholder's right to 
petition for a non-binding, advisory vote on senior officer 
compensation; and
    [ssquf] Sec.  630.20(i) (last sentence), requiring disclosure of 
any advisory votes held during the reporting year within the System.

All other regulatory provisions and changes resulting from the October 
3, 2012 (77 FR 60582) rulemaking remain in effect. In addition, the 
interim final rule and this action close the rulemaking petition filed 
by the Council on December 4, 2012.\4\
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    \4\ On December 4, 2012, the Council, on behalf of the System 
banks and associations, filed a petition requesting that the FCA 
repeal the advisory voting rule. Interested parties have the right 
to petition a Federal agency to issue, amend, or repeal regulations 
under 5 U.S.C. 553(e). The FCA published the petition in the Federal 
Register on February 19, 2013 (78 FR 11551), and invited comments.
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Regulatory Flexibility Act

    Pursuant to section 605(b) of the Regulatory Flexibility Act (5 
U.S.C. 601 et seq.), the FCA hereby certifies that this final rule will 
not have a significant economic impact on a substantial number of small 
entities. Each of the banks in the System, considered together with its 
affiliated associations, has assets and annual income in excess of the 
amounts that would qualify them as small entities. Therefore, System 
institutions are not ``small entities'' as defined in the Regulatory 
Flexibility Act.

[[Page 34622]]

List of Subjects

12 CFR Part 611

    Agriculture, Banks, banking, Rural areas.

12 CFR Part 620

    Accounting, Agriculture, Banks, banking, Reporting and 
recordkeeping requirements, Rural areas.

12 CFR Part 630

    Accounting, Agriculture, Banks, banking, Organization and functions 
(Government agencies), Reporting and recordkeeping requirements, Rural 
areas.

    Accordingly, the interim rule amending 12 CFR parts 611, 620, and 
630, which was published on March 31, 2014 (79 FR 17854), is adopted as 
a final rule without changes.

    Dated: June 12, 2014.
Dale L. Aultman,
Secretary, Farm Credit Administration Board.
[FR Doc. 2014-14227 Filed 6-17-14; 8:45 am]
BILLING CODE 6705-01-P