99-30365. Policy Statement on Borrower Privacy

[Federal Register Volume 64, Number 224 (Monday, November 22, 1999)]
[Notices]
[Page 63812]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-30365]


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FARM CREDIT ADMINISTRATION

[BM-10-NOV-99-02]


Policy Statement on Borrower Privacy

AGENCY: Farm Credit Administration.

ACTION: Policy statement.

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SUMMARY: The Farm Credit Administration (FCA) Board adopted a policy 
statement that requires Farm Credit System (FCS or System) institutions 
to formally inform borrowers that their nonpublic personal financial 
information is protected by regulation. The policy statement requires 
System institutions to inform new borrowers at loan closing of the FCA 
regulations on releasing borrower information and to address this issue 
in the Annual Report to Shareholders.

EFFECTIVE DATE: November 10, 1999.

FOR FURTHER INFORMATION CONTACT: Eric Howard, Senior Policy Analyst, 
Office of Policy Analysis, Farm Credit Administration, [phone], 
TDD [phone].

SUPPLEMENTARY INFORMATION: The text of the Board's policy statement on 
borrower privacy is set forth below in its entirety:
FCA Board Action on Policy Statement on Borrower Privacy, BM-10-NOV-99-
02, FCA-PS-77
    Effective Date: 10-Nov-99.
    Effect on Previous Actlon: None.
    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 consumer privacy 
is an important component of individual freedom. The FCA Board also 
realizes that the free flow of information is necessary for the 
functioning of our democratic society and market economy. As 
cooperative institutions organized using the principles of democracy 
and free markets, these same issues are important to Farm Credit System 
(System) institutions and their shareholders. Moreover, 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.
    Recently we have witnessed the proliferation of businesses that 
specialize in the collection and dissemination of personal financial 
information. These ``information brokers'' market public and nonpublic 
information to various customers. Advances in computer technology have 
enabled ``information brokers'' to access and distribute personal 
financial information easily, cheaply, and without a consumer's 
knowledge or consent.
    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.
    The FCA Board believes that Farm Credit institutions have a 
responsibility to inform their shareholders of their obligation to 
protect shareholders' nonpublic personal information. Therefore, Farm 
Credit institutions should inform new borrowers at loan closing of the 
FCA regulations on releasing borrower information. Farm Credit 
institutions should also address this information in the Annual Report 
to Shareholders. The implementation of these measures will ensure that 
new and existing borrowers are aware of the privacy protections 
afforded them through FCA regulations and Farm Credit System 
institution efforts.

    Adopted this 10th day of November, 1999 by order of the Board.

    Dated: November 16, 1999.
Nan P. Mitchem,
Acting Secretary, Farm Credit Administration Board.
[FR Doc. 99-30365 Filed 11-19-99; 8:45 am]
BILLING CODE 6705-01-P