[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: 12CFR614.4540]



[Page 135-136]

 

                       TITLE 12--BANKS AND BANKING

 

                 CHAPTER VI--FARM CREDIT ADMINISTRATION

 

PART 614_LOAN POLICIES AND OPERATIONS--Table of Contents

 

  Subpart P_Farm Credit Bank and Agricultural Credit Bank Financing of 

                      Other Financing Institutions

 

Sec. 614.4540  Other financing institution access to Farm Credit Banks 

and agricultural credit banks for funding, discount, and other similar 

financial assistance.



    Source: 63 FR 36547, July 7, 1998, unless otherwise noted.





    (a) Basic criteria for access. Any national bank, State bank, trust 

company, agriculture credit corporation, incorporated livestock loan 

company, savings association, credit union, or any association of 

agricultural producers engaged in the making of loans



[[Page 136]]



to farmers and ranchers, and any corporation engaged in the making of 

loans to producers or harvesters of aquatic products may become an other 

financing institution (OFI) that funds, discounts, and obtains other 

similar financial assistance from a Farm Credit Bank or agricultural 

credit bank in order to extend short- and intermediate-term credit to 

eligible borrowers for authorized purposes pursuant to sections 1.10(b) 

and 2.4(a) and (b) of the Act. Each OFI shall be duly organized and 

qualified to make loans and leases under the laws of each jurisdiction 

in which it operates.

    (b) Assured access. Each Farm Credit Bank or agricultural credit 

bank must fund, discount, or provide other similar financial assistance 

to any creditworthy OFI that:

    (1) Maintains at least 15 percent of its loan volume at a seasonal 

peak in loans and leases to farmers, ranchers, aquatic producers and 

harvesters. The Farm Credit Bank or agricultural credit bank shall not 

include the loan assets of the OFI's parent, affiliates, or subsidiaries 

when determining compliance with the requirement of this paragraph; and

    (2) Executes a general financing agreement with the Farm Credit Bank 

or agricultural credit bank that establishes a financing or discount 

relationship for at least 2 years.

    (c) Underwriting standards. Each Farm Credit Bank and agricultural 

credit bank shall establish objective policies, procedures, pricing 

guidelines, and loan underwriting standards for determining the 

creditworthiness of each OFI applicant. A copy of such policies, 

procedures, guidelines, and standards shall be made available, upon 

request to each OFI and OFI applicant.

    (d) Denial of OFI access. A Farm Credit Bank or an agricultural 

credit bank may deny the funding request of any creditworthy OFI that 

meets the conditions in paragraph (b) of this section only when such 

request would:

    (1) Adversely affect a Farm Credit Bank or agricultural credit 

bank's ability to:

    (i) Achieve and maintain established or projected capital levels; or

    (ii) Raise funds in the money markets; or

    (2) Otherwise expose the Farm Credit Bank or agricultural credit 

bank to safety and soundness risks.

    (e) Notice to applicants. Each Farm Credit Bank or agricultural 

credit bank shall render its decision on an OFI application in as 

expeditious a manner as is practicable. Upon reaching a decision on an 

application, the Farm Credit Bank or agricultural credit bank shall 

provide prompt written notice of its decision to the applicant. When the 

Farm Credit Bank or agricultural credit bank makes an adverse credit 

decision on an application, the written notice shall include the 

specific reason(s) for the decision.

    (f) Reports to the board of directors. Each Farm Credit Bank and 

agricultural credit bank shall provide its board of directors with a 

written annual report regarding the scope of OFI program activities 

during the preceding fiscal year.



[63 FR 36547, July 7, 1998, as amended at 69 FR 29862, May 26, 2004]