[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: 12CFR612.2140]



[Page 87-88]

 

                       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. 612.2140  Directors--prohibited conduct.



    A director of a System institution shall not:

    (a) Participate, directly or indirectly, in deliberations on, or the 

determination of, any matter affecting, directly or indirectly, the 

financial interest of the director, any relative of the director, any 

person residing in the director's household, any business partner of the 

director, or any entity controlled by the director or such persons 

(alone or in concert), except those matters of general applicability 

that affect all shareholders/borrowers in a nondiscriminatory way, e.g., 

a determination of interest rates.

    (b) Divulge or make use of, except in the performance of official 

duties, any fact, information, or document not generally available to 

the public that is acquired by virtue of serving on the board of a 

System institution.

    (c) Use the director's position to obtain or attempt to obtain 

special advantage or favoritism for the director, any relative of the 

director, any person residing in the director's household, any business 

partner of the director, any entity controlled by the director or such 

persons (alone or in concert), any other System institution, or any 

person transacting business with the institution, including borrowers 

and loan applicants.

    (d) Use the director's position or information acquired in 

connection with the director's position to solicit or obtain, directly 

or indirectly, any gift, fee, or other present or deferred compensation 

or for any other personal benefit on behalf of the director, any 

relative of the director, any person residing in the director's 

household, any business partner of the director, any entity controlled 

by the director or such persons (alone or in concert), any other System 

institution, or any person transacting business with the institution, 

including borrowers and loan applicants.

    (e) Accept, directly or indirectly, any gift, fee, or other present 

or deferred compensation that is offered or could reasonably be viewed 

as being offered to influence official action or to obtain



[[Page 88]]



information that the director has access to by reason of serving on the 

board of a System institution.

    (f) Knowingly acquire, directly or indirectly, except by inheritance 

or through public auction or open competitive bidding available to the 

general public, any interest in any real or personal property, including 

mineral interests, that was owned by the employing, supervising, or any 

supervised institution within the preceding 12 months and that had been 

acquired by any such institution as a result of foreclosure or similar 

action; provided, however, a director shall not acquire any such 

interest in real or personal property if he or she participated in the 

deliberations or decision to foreclose or to dispose of the property or 

in establishing the terms of the sale.

    (g) Directly or indirectly borrow from, lend to, or become 

financially obligated with or on behalf of a director, employee, or 

agent of the employing, supervising, or a supervised institution or a 

borrower or loan applicant of the employing institution, unless:

    (1) The transaction is with a relative or any person residing in the 

director's household;

    (2) The transaction is undertaken in an official capacity in 

connection with the institution's discounting, lending, or participation 

relationships with OFIs and other lenders; or

    (3) The Standards of Conduct Official determines, pursuant to 

policies and procedures adopted by the board, that the potential for 

conflict is insignificant because the transaction is in the ordinary 

course of business or is not material in amount and the director does 

not participate in the determination of any matter affecting the 

financial interests of the other party to the transaction except those 

matters affecting all shareholders/borrowers in a nondiscriminatory way.

    (h) Violate an institution's policies and procedures governing 

standards of conduct.