Organization; Standards of Conduct and Referral of Known or Suspected Criminal Violations; Loan Policies and Operations; Funding and Fiscal Affairs, Loan Policies and Operations, and Funding Operations; General Provisions; Definitions; Disclosure to Shareholders; Disclosure to Investors in System-Wide and Consolidated Bank Debt Obligations of the Farm Credit System; Effective Date

AGENCY:

Farm Credit Administration.

ACTION:

Final rule; Announcement of effective date.

SUMMARY:

The Farm Credit Administration (FCA) published a final rule under parts 611, 612, 614, 615, 618, 619, 620, and 630 on February 2, 2006 (71 FR 5740). This final rule amends our regulations affecting the governance of the Farm Credit System (System). The final rule enhances impartiality and disclosure in the election of directors; requires that Farm Credit banks and associations establish policies identifying desirable director qualifications; requires boards to have a director or an advisor who is a financial expert; requires System institutions to establish director training procedures; and ensures that boards conduct annual self-evaluations. The final rule addresses the term of service and removal of outside directors, while requiring all Farm Credit banks and associations with assets over $500 million to have at least two outside directors. The rule also provides associations with small boards an exemption from having at least two outside directors. The rule further requires that Farm Credit banks and associations have nominating committees and that all System institutions have audit and compensation committees. The final rule clarifies the current rule on disclosure of conflicts of interest and compensation. The final rule does not apply to the Federal Agricultural Mortgage Corporation (FAMC). In accordance with 12 U.S.C. 2252, the effective date of the final rule is 30 days from the date of publication in the Federal Register during which either or both Houses of Congress are in session. Based on the records of the sessions of Congress, the effective date of the regulation is April 5, 2006.

DATES:

Effective Date: The regulation amending 12 CFR parts 611, 612, 614, 615, 618, 619, 620, and 630 published on February 2, 2006 (71 FR 5740) is effective April 5, 2006, except for the amendments to §§ 611.210(a)(2), 611.220(a)(2)(i) and (ii), 611.325, and 620.21(d)(2) which will be effective April 5, 2007. A reminder of the effective date for these sections will be published at a later date.

Compliance Date: Compliance with board composition requirements (§§ 611.210(a)(2) and 611.220(a)(2)(i) and (ii)) and establishment of bank nominating committees (§§ 611.325 and 620.21(d)(2)) must be achieved 1 year from the effective date of this rule. All other provisions require compliance on the effective date of this rule.

FOR FURTHER INFORMATION CONTACT:

Gary Van Meter, Deputy Director, Office of Regulatory Policy, Farm Credit Administration, McLean, VA 22102-5090, (703) 883-4232, TTY (703) 883-4434; or Laura D. McFarland, Senior Attorney, Office of General Counsel, Farm Credit Administration, McLean, VA 22102-5090, (703) 883-4020, TTY (703) 883-4020.