[Federal Register: February 22, 2008 (Volume 73, Number 36)]
[Notices]
[Page 9804-9805]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22fe08-71]
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FARM CREDIT ADMINISTRATION
[BM-14-FEB-08-02]
Consideration and Referral of Supervisory Strategies and
Enforcement Actions
AGENCY: Farm Credit Administration.
ACTION: Policy statement.
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SUMMARY: The Farm Credit Administration (FCA or Agency) Board recently
adopted a policy statement that identifies 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 Farm Credit Act of 1971, as amended, or
other statutes.
DATES: Effective Date: February 14, 2008.
FOR FURTHER INFORMATION CONTACT: Roger Paulsen, Office of Examination,
Farm Credit Administration, McLean, VA 22102-5090, (703) 883-4265, TTY
(703) 883-4483,
or
Jane Virga, Senior Counsel, Office of General Counsel, Farm Credit
Administration, McLean, VA 22102-5090, (703) 883-4020, TTY (703) 883-
4020.
SUPPLEMENTARY INFORMATION: The FCA Board adopted a policy statement
identifying conditions that require referrals to the Agency's
Regulatory Enforcement Committee. The policy statement, in its
entirety, follows:
Consideration and Referral of Supervisory Strategies and
Enforcement Actions
FCA-PS-79 [BM-14-FEB-08-02]
Effective Date: February 14, 2008.
Effect on Previous Action: None.
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 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
[[Page 9805]]
regulation that exposes the institution to significant risk;
4. Conditions meet the statutory criteria for a suspension or
removal;
5. Conditions meet the statutory criteria for assessing a civil
money penalty and the factors to be considered in determining the
amount of a civil money penalty justify the imposition of the penalty;
6. Conditions meet the statutory criteria to place an FCS
institution in conservatorship or receivership;
7. An institution or person fails to comply with an Enforcement
Document or is unwilling or unable to address a violation of a
condition imposed in writing; or
8. Conditions justify termination or modification of an existing
Enforcement Document.
As appropriate, referrals for the REC's consideration also may be
made for conditions not specified above.
Notification of the REC
The REC will be notified when any institution is assigned a ``3''
composite FIRS rating and informed of the Agency's supervisory
strategies.
Consultation with the REC
For institutions under a formal Enforcement Document, or assigned a
composite FIRS rating of ``4'' or ``5'', requests for prior approvals,
or other actions, will be referred to the REC for consultation.
Referral to the FCA Board
The REC will refer to the FCA Board for its consideration all
recommendations concurred with by the REC for the placement of an
Enforcement Document on a FCS institution or person. In the unlikely
instance, when an institution receives a composite ``4'' or ``5'' FIRS
rating and a formal Enforcement Document is not recommended to the FCA
Board, the REC will promptly document and report the Agency's
supervisory strategy to the FCA Board.
Reporting to the FCA Board
The REC Chairman will report at least quarterly to the FCA Board if
matters are referred to or reviewed by the REC, but FCA Board action is
not subsequently requested.
Actions by the REC
The REC will develop procedures to address the responsibilities
outlined herein.
Due to OSMO's statutory independence, the Director of OSMO will
develop procedures for actions affecting Farmer Mac.
Dated this 14th day of February, 2008 by order of the Board.
Dated: February 19, 2008.
Roland E. Smith,
Secretary, Farm Credit Administration Board.
[FR Doc. 08-821 Filed 2-21-08; 8:45am]
BILLING CODE 6705-01-P