[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: 12CFR612.2130] [Page 85-87] TITLE 12--BANKS AND BANKING CHAPTER VI--FARM CREDIT ADMINISTRATION PART 612_STANDARDS OF CONDUCT AND REFERRAL OF KNOWN OR SUSPECTED CRIMINAL VIOLATIONS--Table of Contents Subpart A_Standards of Conduct Sec. 612.2130 Definitions. Subpart A_Standards of Conduct Sec. 612.2130 Definitions. 612.2135 Director and employee responsibilities and conduct--generally. 612.2140 Directors--prohibited conduct. 612.2145 Director reporting. 612.2150 Employees--prohibited conduct. 612.2155 Employee reporting. 612.2157 Joint employees. 612.2160 Institution responsibilities. 612.2165 Policies and procedures. 612.2170 Standards of Conduct Official. 612.2260 Standards of conduct for agents. 612.2270 Purchase of System obligations. Subpart B_Referral of Known or Suspected Criminal Violations 612.2300 Purpose and scope. 612.2301 Referrals. 612.2302 Notification of board of directors and bonding company. 612.2303 Institution responsibilities. Authority: Secs. 5.9, 5.17, 5.19 of the Farm Credit Act (12 U.S.C. 2243, 2252, 2254). Source: 59 FR 24894, May 13, 1994, unless otherwise noted. For purposes of this part, the following terms are defined: (a) Agent means any person, other than a director or employee, who represents a System institution in contacts with third parties or who provides professional services to a System [[Page 86]] institution, such as legal, accounting, appraisal, and other similar services. (b) A conflict of interest or the appearance thereof exists when a person has a financial interest in a transaction, relationship, or activity that actually affects or has the appearance of affecting the person's ability to perform official duties and responsibilities in a totally impartial manner and in the best interest of the employing institution when viewed from the perspective of a reasonable person with knowledge of the relevant facts. (c) Controlled entity and entity controlled by mean an entity in which the individual, directly or indirectly, or acting through or in concert with one or more persons: (1) Owns 5 percent or more of the equity; (2) Owns, controls, or has the power to vote 5 percent or more of any class of voting securities; or (3) Has the power to exercise a controlling influence over the management of policies of such entity. (d) Director means a member of a board of directors. (e) Employee means any salaried officer or part-time, full-time, or temporary salaried employee. (f) Entity means a corporation, company, association, firm, joint venture, partnership (general or limited), society, joint stock company, trust (business or otherwise), fund, or other organization or institution, except System institutions. (g) Family means an individual and spouse and anyone having the following relationship to either: parents, spouse, son, daughter, sibling, stepparent, stepson, stepdaughter, stepbrother, stepsister, half brother, half sister, uncle, aunt, nephew, niece, grandparent, grandson, granddaughter, and the spouses of the foregoing. (h) Financial interest means an interest in an activity, transaction, property, or relationship with a person or an entity that involves receiving or providing something of monetary value or other present or deferred compensation. (i) Financially obligated with means having a joint legally enforceable obligation with, being financially obligated on behalf of (contingently or otherwise), having an enforceable legal obligation secured by property owned by another, or owning property that secures an enforceable legal obligation of another. (j) Material, when applied to a financial interest or transaction or series of transactions, means that the interest or transaction or series of transactions is of such magnitude that a reasonable person with knowledge of the relevant facts would question the ability of the person who has the interest or is party to such transaction(s) to perform his or her official duties objectively and impartially and in the best interest of the institution and its statutory purpose. (k) Mineral interest means any interest in minerals, oil, or gas, including, but not limited to, any right derived directly or indirectly from a mineral, oil, or gas lease, deed, or royalty conveyance. (l) OFI means other financing institutions that have established an access relationship with a Farm Credit Bank or an agricultural credit bank under section 1.7(b)(1)(B) of the Act. (m) Officer means the chief executive officer, president, chief operating officer, vice president, secretary, treasurer, general counsel, chief financial officer, and chief credit officer of each System institution, and any person not so designated who holds a similar position of authority. (n) Ordinary course of business, when applied to a transaction, means: (1) A transaction that is usual and customary between two persons who are in business together; or (2) A transaction with a person who is in the business of offering the goods or services that are the subject of the transaction on terms that are not preferential. Preferential means that the transaction is not on the same terms as those prevailing at the same time for comparable transactions for other persons who are not directors or employees of a System institution. (o) Person means individual or entity. (p) Relative means any member of the family as defined in paragraph (g) of this section. [[Page 87]] (q) Service organization means each service organization authorized by section 4.25 of the Act, and each unincorporated service organization formed by one or more System institutions. (r) Standards of Conduct Official means the official designated under Sec. 612.2170 of these regulations. (s) Supervised institution is a term which only applies within the context of a System bank or an employee of a System bank and refers to each association supervised by that bank. (t) Supervising institution is a term that only applies within the context of an association or an employee of an association and refers to the bank that supervises that association. (u) System institution and institution mean any bank, association, or service organization in the Farm Credit System, including the Farm Credit Banks, banks for cooperatives, agricultural credit banks, Federal land bank associations, agricultural credit associations, Federal land credit associations, production credit associations, the Federal Farm Credit Banks Funding Corporation, and service organizations.