94-15136. Policy Statement on Regulatory Philosophy

[Federal Register Volume 59, Number 119 (Wednesday, June 22, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-15136]


[[Page Unknown]]

[Federal Register: June 22, 1994]


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FARM CREDIT ADMINISTRATION

[BM-17-FEB-94-02]

 

Policy Statement on Regulatory Philosophy

AGENCY: Farm Credit Administration.

ACTION: Policy statement.

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SUMMARY: The Farm Credit Administration (FCA) Board adopted a ``Policy 
Statement on Regulatory Philosophy'' [BM-17-FEB-94-02; FCA-PS-59] on 
February 17, 1994. This policy statement is in final form; however, 
pursuant to the ``Policy Statement on Rules for Transaction of Business 
and Operational Responsibilities of the Farm Credit Administration 
Board'' [NV-94-05 (07-FEB-94); FCA-PS-58], Article VII, Section 2(b), 
this Policy Statement should be reviewed by the FCA Board no later than 
February 17, 1999.

EFFECTIVE DATE: February 17, 1994.

FOR FURTHER INFORMATION CONTACT: Curtis M. Anderson, Secretary to the 
Farm Credit Administration Board, Farm Credit Administration, McLean, 
Virginia 22102-5090, [phone], TDD [phone].

SUPPLEMENTARY INFORMATION: The text of the Board's policy statement 
concerning regulatory philosophy is set forth below in its entirety:

Policy Statement on Regulatory Philosophy; BM-17-FEB-94-02; FCA-PS-
59

    Effective Date: Upon adoption.
    Effect on Previous Action: None.
    Source of Authority: Farm Credit Act of 1971, as amended; 12 U.S.C. 
2001 et seq.
    THE 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 promulgate regulations 
that are necessary to implement the law and to promote the safety and 
soundness of the Farm Credit System (System). In general, the Board's 
regulatory objective will be to:

    Protect the public, the investors, and the customer/shareholders 
of the System in an effort to create an environment whereby 
customer/shareholders and investors can take advantage of the 
System's strength and rely on its future viability with confidence.

    The FCA Board believes that safe and sound operations of System 
institutions will promote: (a) Investor confidence in System debt 
securities, which works to ensure adequate funds at reasonable rates 
for lending to customer/shareholders; and, (b) customer/shareholder 
confidence in each cooperatively owned System institution, which works 
to ensure customers and capital.
    To effectively achieve its objective, the FCA will do the 
following:
    1. The FCA will promulgate regulations only as required by law, as 
necessary to interpret the law, or as necessary to promote the safe and 
sound operation of System institutions.
    2. The FCA will work to eliminate outdated regulations and ensure 
that its regulations implement the purposes of the law without 
unnecessary burden or cost. The FCA Board recognizes that some costs 
and benefits are difficult to quantify and that some are qualitative, 
but essential to consider. When there is a significant cost impact, the 
FCA will consider the risk or problem, as well as the costs associated 
with a regulatory solution, from the perspective of the customer/
shareholder, the System institution, the investor, and the regulator, 
including when appropriate a numerically-based cost analysis. In 
choosing among alternatives, the FCA will adopt its regulatory approach 
based upon a reasoned determination that the benefits of the intended 
regulations justify their cost.
    3. The FCA will strive to ensure that each regulation has a well-
defined objective. Regulations will address specific identified risks 
or problems. The Board will consider these risks from the perspective 
of the customer/shareholder, the System institution, the investor, and 
the regulator. Preambles to regulations will explain the FCA Board's 
rationale for the regulatory solution adopted. Consistent with its 
statutory authority, the FCA will establish a regulatory environment 
that grants System institutions the business flexibility to offer a 
full range of high quality, low cost credit and other services to 
customer/shareholders.
    4. The FCA's regulations shall, to the extent feasible, specify 
performance criteria and objectives rather than operational methods for 
achieving its purposes. The FCA recognizes that it does not manage the 
day-to-day activities of System institutions. Operational constraints 
that are imposed by regulations should be based on specific statutory 
requirements or the achievement of regulatory objectives.
    5. In setting regulatory priorities, the FCA, to the extent it has 
discretion, will give high priority to issues that pose the greatest 
risk within the Farm Credit System.
    6. The FCA will carefully consider policy positions of the other 
financial regulators to determine whether or not consistency 
facilitates the objectives of the Act. The FCA Board recognizes that 
differences between the System and non-agricultural lenders will at 
times warrant different approaches.
    7. The FCA will draft its regulations and policy statements to be 
clear and easy to understand, with the goal of minimizing the potential 
for ambiguity, uncertainty, and resultant litigation.
    8. The FCA will utilize appropriate innovative approaches to 
seeking the public's perspective regarding regulatory proposals.
    The FCA Board will take these principles into consideration as its 
considers the need for and the content of new regulatory initiatives 
and as it reviews existing regulations to determine their continuing 
need and effectiveness. The FCA Board is mindful that most regulatory 
activities will involve competing considerations and is committed to 
considering and weighing those competing considerations and arriving at 
thoughtful regulatory judgments.

    Adopted this 17th day of February, 1994, by order of the Board.

    Dated: June 16, 1994.
Curtis M. Anderson,
Secretary, Farm Credit Administration Board.
[FR Doc. 94-15136 Filed 6-21-94; 8:45 am]
BILLING CODE 6705-01-P