[Federal Register: August 19, 2003 (Volume 68, Number 160)]
[Notices]
[Page 49773-49774]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19au03-49]
=======================================================================
-----------------------------------------------------------------------
FARM CREDIT ADMINISTRATION
Proposed Related Services; Farm Management and Agricultural Trust
AGENCY: Farm Credit Administration.
ACTION: Notice; Request for public comment.
-----------------------------------------------------------------------
SUMMARY: The Farm Credit Administration (FCA or we) requests public
comment on an inquiry by a Farm Credit System (System or FCS)
institution for approval to offer farm management and agricultural
trust services as authorized ``Related Services.'' The requested
services are being published for a 60-day public comment period prior
to the FCA acting on the request to offer such services.
DATES: Please send your comments to the FCA by October 20, 2003.
ADDRESSES: You may send comments by electronic mail to reg-
comm@fca.gov, through the Pending Regulations section of the FCA's
interactive Web site at www.fca.gov, or through the government-wide
www.regulations.gov portal. You may also send written comments to
Robert Coleman, Director, Regulation and Policy Division, Office of
Policy and Analysis, Farm Credit Administration, 1501 Farm Credit
Drive, McLean, Virginia 22102-5090 or by facsimile to (703) 734-5784.
Copies of all comments we receive can be reviewed at FCA's office in
McLean, Virginia.
FOR FURTHER INFORMATION CONTACT:
Lori Markowitz, Policy Analyst, Office of Policy and Analysis, Farm
Credit Administration, McLean, VA 22102-5090, (703) 883-4498, TTY (703)
883-4434;
or
Joy Strickland, Senior Counsel, Regulatory Enforcement Division, Office
of General Counsel, Farm Credit Administration, McLean, VA 22102-5090,
(703) 883-4020, TTY (703) 883-4020.
SUPPLEMENTARY INFORMATION:
I. Objective
Consistent with law and safety and soundness principles, the
objective of this notice is to request public comment on a request from
a FCS institution to offer farm management and agricultural trust
services as authorized ``Related Services.''
II. Background
Related services, as defined in 12 CFR 618.8000(b) means ``any
service or type of activity provided by a System bank or association
that is appropriate to the recipient's on-farm, aquatic, or cooperative
operations, including control of related financial matters.'' Any new
service not previously authorized and placed on the Related Services
List in 12 CFR part 618 requires a prior determination that the service
is legally authorized. The FCA also must evaluate whether the service
presents excessive risk to the requesting institution or the System as
a whole, including whether the service could result in significant
conflicts of interest or expose the institution or the System as a
whole to significant liability.
III. Proposed Related Services
Under the proposal, the following services would be provided to
persons eligible to receive such services from Farm Credit institutions
under 12 CFR 618.8005.
1. Farm Management Services: Professionals familiar with the market
would provide management of agricultural properties for real estate
owners in the service area. Farm management includes defining ownership
goals, identifying problems, analyzing alternatives, and making
recommendations for achieving business goals. Farm managers would
present the customer with a full spectrum of lease or custom farming
alternatives and help the owner decide how to ultimately get the best
return on assets. Key factors of the service would include developing a
comprehensive farm operating plan, securing operators and negotiating
leases, providing property reporting, including annual budgets and
projections, analyzing government programs, formulating and
implementing capital improvements and repairs, and handling commodity
sales.
2. Agricultural Trust Services: The applicant would assist
customers in creating a trust and managing the assets of the trust. As
the trustee, the applicant would handle the responsibilities involved
in settling the estate, including record keeping, asset management,
asset disposition, tax filings, and income distributions.
IV. Requesting Comments
In its evaluation of the proposed services, the FCA will focus on
systemic issues rather than on institution or program-specific factors.
If we authorize the above related services, any System bank or
association may develop a program and subsequently offer the same
related service(s) to eligible recipients, subject to any special
conditions or limitations imposed by the FCA. We may, at the time of
approval, impose such special conditions or limitations on any approved
service to ensure safety and soundness or compliance with law or
regulation. These programs would be subject to review during the
examination process.
Because of the complex nature of these proposed services, the FCA
solicits public comment prior to acting on the request, in accordance
with 12 CFR 618.8010(b)(3). We believe that evaluation of the proposal
will be aided by public comment. Specifically, we request comments on
the risks inherent in offering these services, such as the
[[Page 49774]]
potential for conflicts of interest and liability or environmental
concerns, particularly in regard to providing such services to
borrowers who may be having financial difficulty or who may be missing
loan payments. We request commenters propose how they believe these
identified risks might be mitigated, keeping in mind that some of the
risks could be addressed by licensing requirements, requiring pertinent
disclosure for certain services, and adopting internal controls. We
also request comments on the potential benefits to farmers, the impact
of such services on the lending function, and any other pertinent
issues. In addition, we request comments on what Systemwide issues
might be raised by a decision to authorize such services.
Dated: August 13, 2003.
Jeanette C. Brinkley,
Secretary, Farm Credit Administration Board.
[FR Doc. 03-21112 Filed 8-18-03; 8:45 am]
BILLING CODE 6705-01-P