[Code of Federal Regulations]

[Title 12, Volume 6]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 12CFR614.4255]



[Page 119]

 

                       TITLE 12--BANKS AND BANKING

 

                 CHAPTER VI--FARM CREDIT ADMINISTRATION

 

PART 614_LOAN POLICIES AND OPERATIONS--Table of Contents

 

              Subpart F_Collateral Evaluation Requirements

 

Sec. 614.4255  Independence requirements.



    (a) Prohibitions. For all personal and intangible property, and for 

all real property exempted under Sec. 614.4260(c) of this subpart, no 

person may:

    (1) Perform evaluations in connection with transactions in which 

such person has a direct or indirect interest, financial or otherwise, 

in the loan or subject property;

    (2) As a director, vote on or approve a loan decision on which such 

person performed a collateral evaluation; or

    (3) As a director, perform a collateral evaluation in connection 

with any transaction on which such person made or will be required to 

make a credit decision.

    (b) Officers and employees. If the institution's internal control 

procedures required by Sec. 618.8430 of this chapter include 

requirements for either a prior approval or post-review of credit 

decisions, officers and employees may:

    (1) Participate in a vote or approval involving assets on which they 

performed a collateral evaluation; or

    (2) Perform a collateral evaluation in connection with a transaction 

on which they have made or will be required to make a credit decision.

    (c) Real estate appraiser. Except as provided in Sec. 614.4260(c) 

of this subpart, all evaluations of real property that serve as the 

primary security for a loan shall be performed by a qualified real 

estate appraiser who has no direct or indirect interest, financial or 

otherwise, in the loan or subject property and is not engaged in the 

marketing, lending, collection, or credit decision processes of any of 

the following:

    (1) A Farm Credit System institution making or originating the loan;

    (2) A Farm Credit System institution operating under common 

management with the institution making or originating the loan; or

    (3) A Farm Credit System institution purchasing an interest in the 

loan.

    (d) Fee appraisers. Fee appraisers shall be engaged directly by the 

Farm Credit System institution or its agent, and shall have no direct or 

indirect interest, financial or otherwise, in the property or 

transaction. A Farm Credit System institution may accept a real estate 

appraisal that was prepared by an appraiser engaged directly by another 

Farm Credit System institution, by a United States Government agency, a 

Government-Sponsored Enterprise or by a financial institution subject to 

title XI of FIRREA.

    (e) Loan purchases. No employee who, acting as a State licensed or 

State certified appraiser, performed a real estate appraisal on any 

collateral supporting a loan shall subsequently participate in any 

decision related to the loan purchase.