[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: 12CFR614.4570]



[Page 137]

 

                       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. 614.4570  Recourse and security.



    (a) Full recourse and guarantee. All obligations that are funded or 

discounted through a Farm Credit Bank or agricultural credit bank shall 

be endorsed with the full recourse or unconditional guarantee of the 

OFI.

    (b) General collateral. (1) Each Farm Credit Bank and agricultural 

credit bank shall take as collateral all notes, drafts, and other 

obligations that it funds or discounts for each OFI; and

    (2) Each Farm Credit Bank and agricultural credit bank shall 

perfect, in accordance with State law, a senior security interest in any 

and all obligations and the proceeds thereunder that the OFI pledges as 

collateral.

    (c) Supplemental collateral. (1) Each Farm Credit Bank and 

agricultural credit bank shall develop policies and loan underwriting 

standards that establish uniform and objective requirements to determine 

the need and amount of supplemental collateral or other credit 

enhancements that each OFI shall provide as a condition for obtaining 

funding, discount and other similar financial assistance from such Farm 

Credit bank.

    (2) The amount, type, and quality of supplemental collateral or 

other credit enhancements required for each OFI shall be established in 

the general financing agreement and shall be proportional to the level 

of risk that the OFI poses to the Farm Credit Bank or agricultural 

credit bank.