Organization; Stockholder Vote on Like Lending Authority

AGENCY:

Farm Credit Administration.

ACTION:

Reproposed rule; request for comment.

SUMMARY:

The Farm Credit Administration (FCA or Agency) is reproposing regulations to carry out territorial consent requirements of the Farm Credit Act of 1971, as amended (Act). The reproposed rule requires Farm Credit System (FCS or System) institutions and stockholders in certain areas of the country to vote on certain charter amendments. The charter amendments would provide eligible customers the opportunity to obtain lending services from more than one association.

EFFECTIVE DATE:

Please send your comments to us by October 30, 2000.

ADDRESSES:

You may send comments by electronic mail to “reg-comm@fca.gov” or through the Pending Regulations section of our Web site at “www.fca.gov.” You may also send comments to Patricia W. DiMuzio, Director, Regulation and Policy Division, Office of Policy and Analysis, Farm Credit Administration, 1501 Farm Credit Drive, McLean, Virginia 22102-5090 or fax them to (703) 734-5784. You may review copies of all comments we receive in the Office of Policy and Analysis, Farm Credit Administration.

FOR FURTHER INFORMATION CONTACT:

Eric Howard, Senior Policy Analyst, Office of Policy and Analysis, Farm Credit Administration, McLean, VA 22102-5090, (703) 883-4498, TDD (703) 883-4444,

   or

Joy Strickland, Senior Counsel, Office of General Counsel, Farm Credit Administration, McLean, VA 22102-5090, (703) 883-4020, TDD (703) 883-4444.

SUPPLEMENTARY INFORMATION:

I. Objectives

On March 8, 2000, we announced our plan to remove geographic barriers by considering applications for national (also referred to as nationwide) charters from direct lender associations. We believe removing the geographic constraints on System entities will promote greater efficiency, improve customer service, and ensure the System continues to meet the current and future needs of rural America. We also believe national charters can improve the safety and soundness of FCS associations' loan portfolios because they offer opportunities to diversify commodity and geographic concentration risks. We issued guidance to System institutions on May 3, 2000, explaining the process of applying for a national charter. Before we can grant national charters in all 50 states, however, the Act requires certain associations to conduct stockholder votes. Our objectives for this rule are to:

• Implement the stockholder approvals required by statute; and
• Ensure stockholders have adequate information before voting on competitive charters.

II. Background

On May 9, 2000, we published a proposed rule in the Federal Register to amend part 611 of our regulations. See 65 FR 26776. Provisions in the Farm Credit Banks and Associations Safety and Soundness Act of 1992 (1992 amendments) require stockholder votes on competitive charters involving certain associations in Alabama, Louisiana, Mississippi, and New Mexico. Stockholder approval in these states is necessary before we can act on applications for competitive charters that would include the territory served by the covered associations. The proposed rule required stockholders in these four states to vote on competitive charters that would allow eligible customers to borrow from more than one association.

We received 18 comment letters in response to the proposed rule. Of this total, we received comments from three Farm Credit banks, three production credit associations (PCAs), four Federal land credit associations (FLCAs), two agricultural credit associations, and one jointly managed PCA/FLCA. We also received a comment letter from a Farm Credit Bank (FCB) and seven of its affiliated associations. Several commenters sent in more than one comment.

The comment letters revealed several views about the proposed requirements for conducting stockholder votes on competitive charters. One commenter wrote to convey full support for the proposed rule. Several commenters expressed support for removing the territorial restrictions that prevent borrowers from choosing their System lender, but objected to specific requirements of the proposed rule. Many of the commenters objected to the short timeframes required to fulfill the proposed voting procedures. Other commenters raised concerns over the impact added competition would have on their institution and urged us to withdraw or substantially revise the rule to address these concerns. Finally, the FCB of Texas and seven of its affiliated associations (hereinafter referred to as the FCB of Texas) questioned our authority to issue a rule requiring stockholder votes on competitive charters.

We have decided to repropose this regulation. On July 20, 2000, we published a notice in the Federal Register seeking comment on our May 3, 2000 publication entitled National Charters (Booklet). See 65 FR 45066. This Booklet is located on our Web site at “www.fca.gov” and provides guidance on the national charter application process. Because we believe that comments on the Booklet may be relevant to this regulation, we have decided to ask for further comment on the regulation. In addition, we have modified the proposed rule to address many of the comments we received. The modifications provide greater flexibility for implementing the statutory voting requirements. We believe that an additional opportunity for comment may be beneficial to the covered associations and their stockholders.

III. The Reproposed Regulations—General Comments

A. FCA Authority

The FCB of Texas commented the FCA lacks the authority to force a vote on competitive charters in the covered areas. The commenters assert that nothing in the Act or its amendments requires affected institutions to conduct votes of their stockholders or boards of directors. And, if a covered association does not conduct a vote, the FCA would not be able to approve a new or amended competitive charter. According to the commenters, the FCA's authority is merely to inform the covered institutions of an overcharter request. It would then be up to the institutions' boards of directors to conduct the votes if they chose to do so. Finally, the commenters assert that conducting a vote on competitive charters is a business decision that is best left to the institution.

In response to these comments, we observe that the FCA has broad authority in section 5.17(a)(9) of the Act to prescribe regulations necessary or appropriate for carrying out the Act. Section 5.17(a)(11) of the Act gives us the authority to exercise such incidental powers as may be necessary or appropriate to fulfill our duties and carry out the purposes of the Act. We also have the authority in sections 2.0(b)(8)(D), 2.10(c)(4) and 5.17(a)(2)(A) of the Act to issue and approve amendments to Federal charters of System institutions. This reproposed rule is based on these authorities implementing the requirements of the 1992 amendments.

The 1992 amendments state that FCA cannot issue a charter amendment that will result in competition for institutions in covered areas unless specified approvals take place. The Act does not, however, contain any details on how to fulfill the approvals. We agree with the commenters that, as a general principle, business decisions should be left to System institutions. However, the FCA wishes to implement the Act in a way that ensures a fair process for all institutions and stockholders affected by this statutory requirement.

Many institutions have submitted charter amendment requests to us for national territories. The Act requires certain approvals before we can grant national charter amendments. We believe that it is critical that the approval process be fair to both the covered institutions that must approve the charter amendments and the institutions seeking the charter amendments. To ensure an appropriate approval process, we are implementing a voting process through notice and comment rulemaking. By taking this action, all affected parties will have an opportunity to provide input on the process.

The commenters have suggested a situation that provides strong justification for FCA to adopt regulations requiring a voting process to implement the 1992 amendments. The commenters suggest that covered institutions could refuse to conduct a stockholder vote. Under this scenario, no competitive charter amendments in the covered geographic areas would ever be possible. This result would be unfair to the System institutions seeking national charters. It would also be unfair to stockholders in the covered areas who would be deprived of the opportunity to express their views on the merits of having other FCS lenders serving their areas. This is clearly not what Congress intended when it adopted the 1992 amendments.

There is no evidence in the plain language of the Act or the legislative history that Congress intended to prevent competitive charter amendments from being granted. If Congress intended to prevent competitive charters, it could have done so. There is also no evidence that Congress intended to grant the covered institutions the ability to prevent charter amendments through inaction. Instead, the remedy Congress granted the covered institutions is to prevent competition by disapproving charter amendments through votes of the stockholders and bank boards of directors in all the covered areas and association boards of directors in New Mexico.

If the covered associations never act on competitive charters, no other associations could get charter amendments for those areas. This would unfairly restrict all the other associations in the System from seeking competitive charters in the covered areas. In contrast, our approach in the reproposed regulation is fair. Those stockholders, associations, and banks that do not want competitive charters in the covered territories have a full and fair remedy to prevent competitive charters. They can vote to disapprove the issuance of competitive charters. This rule would ensure that a fair approval process occurs.

B. Group Voting on National Charters

Some commenters stated that voting on national charters as a group violates the 1992 amendments. They contend the 1992 amendments require a vote to approve or disapprove each competitive charter amendment. They believe that the covered institutions should have an opportunity to evaluate the identity of the specific association requesting the charter amendment and the impact of granting it a competitive charter. The commenters note our concern over the cost and disruptive effect voting on each charter request would entail.

In response, we note that the 1992 amendments do not specify the details for stockholders, associations, and bank boards of directors to approve or disapprove competitive charter amendments. Therefore, it is our responsibility to specify how to carry out the consent requirement in a reasonable manner. We acknowledge that there are other, less desirable procedures, such as a separate vote on each competitive charter amendment that might comply with the Act. We believe, however, the Act also permits the covered institutions to conduct a vote on whether any association charter amendment can be granted. We further believe that the intent of Congress, which was to give covered institutions the right to prevent their territories from being overchartered without their consent, is preserved by voting on whether any association could be chartered in the covered territories.

The commenters suggest that FCA bundle many requests together to lessen the burden of separate stockholder and board votes. This suggestion presents many practical problems considering there are over 100 direct lender associations in the System. Providing specific association-by-association information on each association seeking a national charter would be cumbersome and burdensome to both the covered institutions and the voting stockholders. We believe we are proposing the most reasonable approach by requiring covered institutions to conduct votes on whether any competitive charter may be granted in their territories. If a covered institution wishes to allow competitive charters for certain associations but not others, it can vote to disapprove the question in the rule and conduct individual votes on particular associations at a later time. In the latter event, the institution can make the business decision to conduct votes on more than one association at a time as it sees fit. However, we do not believe it is appropriate for us to place this added burden on covered institutions and their stockholders.

C. Fairness of Process

Finally, one bank and three associations commented that it is unfair that a covered association could vote to disapprove overchartering but remain eligible to receive a nationwide charter. The commenters encouraged us to prevent covered associations from being able to protect their current lending area from competition by disapproving the question, while at the same time applying for a nationwide charter.

We note that the commenters make compelling points on this issue. We did not, however, make this change in the reproposed regulations for several reasons. First, the 1992 amendments grant certain rights to the covered associations that the Act does not provide to the rest of the FCS associations. We believe implementing the commenters' suggestions could be viewed as penalizing the covered associations for exercising their statutory protections. Further, limiting those eligible for national charters would be inconsistent with the Board's philosophy to ensure greater opportunities for agricultural and rural borrowers.

IV. The Reproposed Regulations—Section-by-Section Discussion

A. Section 611.1150—Definitions

We received three comments concerning which institutions should be covered by the voting requirements. The FCB of Wichita commented that Farm Credit of New Mexico, FLCA, (New Mexico FLCA), should be a covered association. The New Mexico FLCA commented that we should include it as a covered association and that it supports the comments of the FCB of Wichita. The bank stated that the New Mexico FLCA exercises lending authority in territory that was served by associations that were reassigned pursuant to section 433 of the Agricultural Credit Act of 1987 (1987 Act). Thus, the bank concluded that the New Mexico FLCA comes within the protections of the 1992 amendments. The bank believes that excluding the New Mexico FLCA could result in unfair competition from other New Mexico associations should cross-title lending authority be implemented.

We did not include the New Mexico FLCA as a covered association because we believe the 1992 amendments apply only to associations that were reassigned. The language of the 1992 amendments must be interpreted consistent with its legislative history. The legislative history clarifies that Congress intended the amendments to only apply to those “associations availing themselves of the opportunity to be reassigned.” Congress stated that: “The amendment is intended only to assure the farmer-borrowers who own the reassigned associations that their associations would not be overchartered without their consent.” Thus, the legislative history demonstrates that section 5.17(a)(13) and (14) does not apply to the New Mexico FLCA.

After the PCAs changed their affiliation from the FCB of Wichita to the FCB of Texas, the FCB of Texas' charter was amended to include short-and intermediate-term lending in New Mexico, but that authority was not deleted from the FCB of Wichita's charter. The overlapping bank charters created the potential for PCA overchartering that the 1992 amendments were designed to address. At the time the 1992 amendments were enacted, there was no potential for overchartering the New Mexico FLCA because it was not reassigned and the FCB of Wichita continued to have the only long-term lending charter for that territory. Therefore, we believe Congress clearly intended to protect only the reassigned New Mexico PCAs from overchartering without consent.

We also received comments from the Northwest Louisiana PCA and the FCB of Texas that the rule should include the Northwest Louisiana PCA as a covered association. The commenters maintain that the 1992 amendments were intended to protect those areas that suffered because of the failure and subsequent receivership of the former Federal Intermediate Credit Bank of Jackson (FICBJ). Because the Northwest Louisiana PCA is included in that geographic area, it should not be overchartered without its consent. They further maintain that excluding the PCA merely because it reassigned to the FCB of Texas would unfairly deny it this statutory protection.

This position is contrary to the language of the 1992 amendments. Congress carefully crafted a description of the area where the protections would apply. Section 5.17(a)(2)(B) applies only to the geographic area where due to the failure of the FICBJ to merge, the FICBJ or its successor (AgFirst FCB) is chartered to provide short-and intermediate-term credit, and a neighboring FCB that is not the FICBJ's successor (FCB of Texas) is chartered to provide long-term credit. Northwest Louisiana PCA was reassigned from the FICBJ to the FCB of Texas in 1993. However, because the reassignment was not under section 433 of the 1987 Act, the PCA's territory was deleted from the FICBJ's charter. The FCB of Texas is currently chartered to provide long-term credit in the geographic area served by Northwest Louisiana PCA. Neither the FICBJ nor its successor (AgFirst FCB) is chartered to provide short-and intermediate-term credit in this area. As a result, Northwest Louisiana PCA is not entitled to the protections of the 1992 amendments.

Finally, one association commented the 1992 amendments should not apply in areas where the FCB of Texas no longer provides direct long-term credit because it has transferred its long-term lending authority to the FLCAs. Thus, the commenter believes that the protections should not apply to the FLCAs and should only apply to the remaining Federal land bank association (FLBA), the Federal Land Bank Association of South Mississippi. In response, we note that under section 5.17(a)(2)(C) the protections apply in the area where the FCB of Texas “is chartered to provide long-term credit.” As the commenters correctly note, the FCB of Texas has transferred direct lending authority to the FLCAs in the former Jackson district and no longer provides credit directly. Although the direct lending authority remains in the bank's charter, our regulations make clear that this authority cannot be exercised once a bank transfers direct lending authority to its FLCAs. However, the FCB of Texas' charter also authorizes it to lend to its associations for the purpose of providing long-term credit. We conclude that the charter thus allows the bank to “provide long-term credit” within the meaning of section 5.17(a)(2)(C) and that the consent provisions apply to the FLCAs.

We have carefully considered the comments on the definition of covered associations. For the reasons stated above, we are making no changes to the associations covered by the reproposed rule.

B. Section 611.1151—What Stockholders Must Decide

Most of the commenters expressed concern with the wording of the proposed stockholder question. Some of the commenters believe the question could be confusing or misleading to stockholders on the consequences of their vote. Commenters also inquired why we proposed one question for stockholders and another for boards of directors. Others felt that the question was too vague and should more closely follow the language of the statute. Finally, other commenters contended that the question was designed to encourage approval.

These commenters have persuaded us to repropose a single question for both stockholders and boards of directors. The question in the reproposed rule more closely follows the statute, but is written in plain language to promote greater understanding by the voters. By more closely following the statute, the consequences of approving or disapproving the question should be clearer to stockholders. We note that neither the proposed nor reproposed question is intended to encourage a particular outcome. In addition, to help reduce the potential for confusion, we are adding a statement for the New Mexico PCAs to explain that the territories that currently overlap will not be affected by the outcome of the question.

Two banks and two associations encouraged us to change the voting process to allow reciprocal approval of the question. The commenters expressed concern that under the proposal, a covered association voting “yes” would open its territory to another covered association that voted “no.” The commenters suggested that covered associations should be able to condition their approval of the question on the approval of other covered associations.

We agree with the commenters' suggestion, and the reproposed question provides for reciprocal voting. The reproposed question is as follows:

Should the Farm Credit Administration issue a charter or charter amendment that would allow any Farm Credit System association to exercise lending authority in the territory now served by X Association?

Approval. Voting to approve means that any other association will be able to make loans in the territory now served by X Association, but only if X Association has the opportunity to make loans in the territory served by the other association.

Disapproval. Voting to disapprove means that no other association will be able to [make long-term mortgage loans or make short-and intermediate-term loans as appropriate] in the territory now served by X Association.

[For New Mexico PCAs—Currently, more than one PCA serves your territory. This competition will not be eliminated regardless of your vote.]

C. Section 611.1152—Bank and Association Boards of Directors' Votes

The FCB of Texas commented that its stockholders should be permitted to vote on the question as it affects lending in the former Jackson district. The bank believes that its charter will be affected by the national charter amendments and therefore, the Act requires a vote of its stockholders. Section 5.17(a)(2)(B) of the Act requires approval by various parties depending on which charters are “affected.” Because this rulemaking only addresses amendments to association charters, only the provisions of section 5.17(a)(2)(B)(i) apply. Under that section, bank stockholders do not participate in the voting. Further, this rule applies to charter amendment requests for direct lender associations only. By the time voting occurs under this rule, the FCB of Texas will have no direct lending authority in the former Jackson district. Therefore, the FCB of Texas' charter will not be affected by direct lender association charter amendment requests. Thus, we are not including bank stockholder voting in the reproposed rule.

A bank and two associations asked for clarification on bank and association board voting. They asked which bank boards would vote in connection with the PCAs that were reassigned in New Mexico. We clarify that the board of directors of the FCB of Wichita will vote on the question as it affects the PCA of Southern New Mexico, which is affiliated with it. The FCB of Texas will vote on the question as it affects the two associations it funds, the PCA of New Mexico and the PCA of Eastern New Mexico.

The commenters also asked whether each of the boards of directors of the PCAs that were reassigned in New Mexico would vote on competitive charters with respect to the other New Mexico PCAs. We clarify that the boards of directors of the PCAs in New Mexico will vote on the question only with respect to their own institution.

Finally, the FCB of Texas asserted that conducting stockholder votes before the boards of directors' votes could waste resources and promote unnecessary conflict between stockholders and the boards of directors. The commenters also noted that typically a matter is presented to stockholders only after the board of directors has considered the issue and recommends approval. The commenters maintain that if the boards of directors vote first and disapprove the question, there would be no need for a stockholder vote.

We believe there are compelling reasons for the association stockholders to vote first. It is the stockholders/borrowers who will be most affected by the outcome of the national charter votes. We believe that the bank boards (and, in New Mexico, the PCA boards) should have the benefit of knowing the views of the association stockholders before making their own decision.

We also disagree that this order of voting promotes confusion and unnecessary conflict between stockholders and their boards of directors. In the former Jackson district, the Act does not provide for the approval of the association boards of directors. Nonetheless, the voting procedure allows the associations' board and management to make a recommendation to the stockholders and provide reasons for their recommendations. Thus, we do not believe this process will confuse the stockholders about their boards' position on the issue.

D. Section 611.1153—Information Statement

The FCB of Texas commented the FCA lacks the authority to dictate the form and substance of the Information Statement. The commenters assert that nothing in the Act grants the FCA the power to prescribe or even influence the material in an information statement transmitted to stockholders. The commenters also assert that the FCA has no authority to make any changes in the content of the Information Statement. The commenters agree that all information contained in the Information Statement should be accurate and complete, but they are concerned that we are attempting to control the contents of their communications with stockholders.

The FCA has authority in the Act to regulate and review information provided by institutions to stockholders in several areas. For example, section 5.17(a)(8) authorizes us to regulate information on the financial condition and operations of the institutions, and section 7.11 authorizes us to approve the disclosures to stockholders for certain corporate actions including mergers, transfers of lending authority and terminations. We have implemented these statutory provisions by rule. These areas highlight the need for FCA review of and involvement in the disclosure provided to stockholders to ensure stockholders receive complete and accurate information. We also have broad authority to prescribe regulations necessary and appropriate to implement the Act. Using that authority, we have previously adopted rules to implement other corporate actions, such as transfers of lending authority and mergers, consolidations, and charter amendments of associations. These rules include detailed requirements for our review and approval of the information provided to stockholders. We used these regulations as a guideline for developing the model Information Statement. We believe that regulating the disclosure given to stockholders for significant chartering actions is critical to carrying out our statutory authority.

Our authority to change the content of the Information Statement is consistent with our authority to review and approve it and to adopt regulations prescribing its content. Notwithstanding our authority to do so, we recognize that making changes to the Information Statement would be a step beyond the past procedures we have adopted. Based on the points raised by the commenters, we do not believe it is necessary to include this provision in the reproposed rule.

As a general matter, we want to assure the commenters that our intent is not to influence a vote of the stockholders of the associations. We want only to ensure that the stockholders receive accurate and complete information on the consequences of competitive charters in the covered areas. We also believe that our involvement in the disclosure process is necessary to ensure that the stockholders receive balanced information. We point out that the association boards of directors are free to recommend approval or disapproval to their stockholders and provide detailed reasons for their recommendations. Finally, we are not requiring the institutions to adopt the model Information Statement word-for-word. Although we believe the model Information Statement is balanced and provides complete information to stockholders, institutions may modify the wording, as long as the information presented is complete, balanced, and not misleading.

The FCB of Texas commented that the FCA has no authority to include a statement of the FCA Board in the Information Statement. The commenters believe that this is inconsistent with the FCA's role as an arms-length regulator. The commenters further state that inclusion of a FCA Board statement would be an attempt to manipulate the business decisions of the institutions. We believe that we have authority to require a statement of our views on the charter amendments to be included in the Information Statement. We do, however, understand the commenters' concerns. Our goal in proposing to include our views in the Information Statement was to ensure fair and balanced disclosure. Based on the commenters' concerns, however, we have reconsidered whether including the FCA Board's views is necessary. Because we will review and approve the Information Statement, and because we are providing a model Information Statement, we do not believe that including our views is necessary.

Finally, we clarify for the commenters that all equity holders will receive the Information Statement to keep them informed of the issues affecting their institution. Only voting stockholders, according to the institution's bylaws, would vote on the question.

E. Section 611.1154—Timeframe for the Vote

The FCB of Texas commented that the proposed regulations provided extremely short time limits for conducting the vote. For example, they believe that 10 days for stockholders to review the Information Statement is inadequate. They noted the proposed timeframe does not provide an opportunity for information meetings with stockholders to discuss the potential benefits and drawbacks of this initiative. Finally, the commenters suggest they will need a minimum of 6 months for the entire process, including preparation of the Information Statement.

We understand that the stockholders will be voting on a significant issue. As a result, we have revised the timeframes for preparing the Information Statement and conducting the stockholders' and boards of directors' votes. The reproposed regulation requires the stockholders' votes be completed by July 16, 2001, and the boards of directors' votes be completed by July 31, 2001. The extended timeframes should also allow more time for the institutions to prepare the Information Statement as well as greater time for stockholders to review and discuss the question. In order to ensure that the votes are conducted by July 31, 2001, however, the reproposed regulations require that the covered associations submit the Information Statement to us for review by May 1, 2001. It is also important to note that while we granted covered associations the flexibility to determine the time available for stockholder review, the reproposed regulations continue to require that stockholders be given at least 10 days. Finally, the reproposal extends the time for our review of the Information Statement from 10 to 15 business days.

F. Miscellaneous Sections

We received no comments on §§ 611.1155 through 611.1158; thus we are making no changes to this section in the reproposed rule.

Proposed § 611.1159 would prohibit an officer, director, employee, or agent of an institution from making any representation that would appear to be a statement of the FCA on the merits of the question. The FCB of Texas commented that this section would violate the First Amendment of the Constitution because it “chills free speech.” Further, they believe that as written, the prohibition is too vague. We respond by revising § 611.1159 to more clearly communicate our intention. The reproposed rule prohibits any officer, director, employee, or agent of an institution from making any untrue or misleading statement to stockholders in connection with a vote on the question. This prohibition is standard in disclosures to stockholders for most corporate activities involving stockholder votes, and it is not intended to restrict free speech. Instead, it is intended to ensure that stockholders are not misled.

We received numerous comments on proposed § 611.1160, which provided for us to conduct a stockholder vote on the question if an institution failed to do so. The commenters questioned whether FCA has the authority to conduct a vote of stockholders. We continue to believe that we have the authority to implement the 1992 amendments by conducting a vote of stockholders if necessary. After carefully considering the comments, however, we do not believe that this provision is necessary. Instead, we will rely on our enforcement authorities to ensure the votes are conducted. Thus, we are not including § 611.1160 in the reproposed rule.

G. Other Comments

A bank and two associations commented that they could not evaluate the issues that this proposal raised with regard to cross-title lending authority. The commenters noted that they would reserve further comments on this issue until they received more information on this process. As previously noted, we plan to provide guidance on cross-title authority issues at a later date.

One association commented that imposing voting requirements on associations in some states without imposing the same requirements on associations in all states may violate the due process clause of the Fifth Amendment. We note that we are merely implementing the statutory voting requirements that Congress enacted in the 1992 amendments.

List of Subjects in 12 CFR Part 611

• Accounting
• Agriculture
• Banks and banking
• Rural areas

For the reasons stated in the preamble, we are reproposing amendments to part 611 of chapter VI, title 12 of the Code of Federal Regulations as follows:

PART 611—ORGANIZATION

1. The authority citation for part 611 continues to read as follows:

Authority: Secs. 1.3, 1.13, 2.0, 2.10, 3.0, 3.21, 4.12, 4.15, 4.20, 4.21, 5.9, 5.10, 5.17, 7.0-7.13, 8.5(e) of the Farm Credit Act (12 U.S.C. 2011, 2021, 2071, 2091, 2121, 2142, 2183, 2203, 2208, 2209, 2243, 2244, 2252, 2279a-2279f-1, 2279aa-5(e)); secs. 411 and 412 of Pub. L. 100-233, 101 Stat. 1568, 1638; secs. 409 and 414 of Pub. L. 100-399, 102 Stat. 989, 1003, and 1004.

2. Add subpart J to read as follows:

Subpart J—Stockholder Vote on Like Lending Authority