96-18218. Policy Statement on Disaster Relief Efforts by Farm Credit Institutions

[Federal Register Volume 61, Number 139 (Thursday, July 18, 1996)]
[Notices]
[Pages 37471-37472]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18218]


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FARM CREDIT ADMINISTRATION

[NV-96-27]


Policy Statement on Disaster Relief Efforts by Farm Credit 
Institutions

AGENCY: Farm Credit Administration.

ACTION: Policy statement.

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SUMMARY: Section 5.17 of the Farm Credit Act of 1971, as amended (Act) 
provides the Farm Credit Administration (FCA) the authority to 
establish standards and guidelines appropriate for carrying out the 
purposes of the Act and to ensure the safety and soundness of the Farm 
Credit System (FCS) institutions. Pursuant to such authorities, the FCA 
Board has adopted a Board Policy Statement on Disaster Relief Efforts 
by Farm Credit Institutions. The FCA Board in its Board Policy 
Statement recognizes that natural and man-made disasters and their 
impact on a specific region of the country or specific segment of the 
agricultural community are occurrences that FCS institutions are 
required to respond to from time to time. The Board Policy Statement 
provides the general philosophy of the FCA with regard to disaster 
relief actions by FCS institutions. The Board Policy Statement also 
provides general direction on the principal objectives and safety and 
soundness concerns associated with any disaster relief actions 
undertaken by FCS institutions.

EFFECTIVE DATE: June 13, 1996.

FOR FURTHER INFORMATION CONTACT:

Dennis K. Carpenter, Senior Policy Analyst, Regulation Development, 
Office of Examination, Farm Credit Administration, 1501 Farm Credit 
Drive, McLean, Virginia 22102-5090, [phone];

or

Rebecca S. Orlich, Senior Attorney, Regulatory Enforcement Division, 
Office of General Counsel, Farm Credit Administration, 1501 Farm Credit 
Drive, McLean Virginia 22102-

[[Page 37472]]

5090, [phone], TDD [phone].

SUPPLEMENTARY INFORMATION: The text of the Board's policy statement on 
disaster relief efforts by Farm Credit institutions is set forth below 
in its entirety:

Farm Credit Administration Board Policy Statement on Disaster Relief 
Efforts by Farm Credit Institutions

NV-96-27

FCA-PS-71

    Effective Date: June 13, 1996.
    Effect on Previous Action: Supersedes FCA Bookletter 368-OE, 
September 14, 1993.
    Source of Authority: Section 5.17 of the Farm Credit Act of 1971, 
as amended.
    The FCA board hereby adopts the following policy statement:
    The Farm Credit Administration (FCA) recognizes that in the 
aftermath of hurricanes, floods, droughts, or other natural or man-made 
disasters, specific sections of the country or segments of the 
agricultural community are declared to be disaster areas. Such disaster 
area declarations may be made by the President of the United States, 
the Governor of a State, or a specific Federal or State government 
agency. When a disaster area includes a rural community where a Farm 
Credit institution is located or does business, the institution can be 
affected in two ways: directly, such as by physical damage to the 
institution itself or incapacitation of employees; or indirectly, such 
as by damage suffered by individuals and businesses with loans from the 
institution. In the interest of providing the highest quality and most 
efficient service to agricultural borrowers, the FCA encourages Farm 
Credit institutions operating in disaster-affected areas to work within 
their communities to help alleviate pressures on borrowers under 
stress.
    When conducted in a reasonable and prudent manner, the efforts of 
Farm Credit institutions to work in the public's interest with 
borrowers in the disaster areas will be considered consistent with safe 
and sound business practices. It is the FCA's belief that the 
institutions have considerable flexibility under the existing 
regulations to provide appropriate disaster relief. Such relief efforts 
may include, but would not necessarily be limited to, extending the 
terms of loan repayment or restructuring a borrower's debt obligations. 
In addition, a Farm Credit institution may consider easing some loan 
documentation or credit-extension terms for new loans to certain 
borrowers or requesting the FCA to grant relief from specific 
regulatory requirements. It is the FCA's belief that the principal 
objectives of any disaster assistance program developed by a Farm 
Credit institution and approved by its board should be to:
    1. Provide necessary and timely relief to disaster-affected 
customers of the institution;
    2. Minimize the adverse effects of the disaster on the 
profitability, financial condition, operating efficiency, and morale of 
customers, as well as on the institution;
    3. Review applicable statutory and regulatory requirements and 
determine whether requesting the FCA to provide exceptions from 
regulatory requirements would be appropriate; and
    4. Promote, through such consideration and actions, the Farm Credit 
System's mandate to provide American farmers and ranchers with sound, 
adequate, and constructive credit and closely related services.
    The FCA further believes that proper risk controls and management 
oversight should be exercised to ensure that such efforts serve the 
interests of the lending institution as well as those of the community. 
Any institution providing disaster relief should document such relief 
actions as well as any significant departures from otherwise applicable 
institution policies and procedures.
    The aforementioned objectives and risk controls are conditions and 
characteristics on which the FCA will evaluate an institution's relief 
activities. These objectives and risk controls should be set forth in 
any request to the FCA for specific regulatory relief.
    The FCA also recognizes that conditions related to a disaster may 
impair an institution's ability to comply in a timely way with 
regulatory reporting and publishing requirements. Farm Credit 
institutions should contact their FCA field office when relief from 
specific regulatory or reporting requirements is needed.
    Additionally, the Board of Governors of the Federal Reserve System 
(Federal Reserve Board) has, from time to time, granted relief from 
certain Regulation Z requirements to consumers located in declared 
disaster areas. It is likely that the Federal Reserve Board will 
continue to promulgate similar temporary exceptions in disaster-
affected areas. When this occurs, the FCA will, as a matter of 
convenience, continue to notify the Farm Credit institutions affected 
by Regulation Z exceptions.

    Adopted this 13th day of June, 1996 by order of the Board.

    Dated: July 12, 1996.
Floyd Fithian,
Secretary, Farm Credit Administration Board.
[FR Doc. 96-18218 Filed 7-17-96; 8:45 am]
BILLING CODE 6705-01-P