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Informational Memorandum
Subject:Consumer and Borrower Rights Regulatory Compliance Requirements
Date of Memorandum:01/13/2010
Expiration Date:
Signed By:McKenzie, Thomas
FCA Contact Person:Anderson, Michael
Contact Phone:303-696-9737 X2081; 703-883-4450 (McLean)
List of Attachments:

Printer-friendly version => IM-RegComplianceReq_Jan13_2010.pdf

January 13, 2010

To: Chairman, Board of Directors
Chief Executive Officer
All Farm Credit System Banks and Associations

From: Thomas G. McKenzie, Director and Chief Examiner
Office of Examination

Subject: Consumer and Borrower Rights Regulatory Compliance Requirements

As part of OE’s National Oversight Program, the Office of Examination evaluated compliance with the Federal Reserve Consumer Regulations and Farm Credit Administration Borrower Rights Regulations at selected System institutions. The results of the examination activity were communicated separately to each of the institutions examined.

Based on the findings observed, we expect all institutions to evaluate their practices related to compliance with consumer and borrower rights regulations. In particular, institutions must ensure templates and forms are fully completed with appropriate information. Additionally, institutions should also maintain an effective and ongoing training program with emphasis on new or revised laws and regulations, as well as exceptions cited in internal audits and FCA examinations. There were several findings observed at multiple institutions that should be reviewed by all institutions to ensure regulatory compliance. Specifically:

The federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided the applicant has the capacity to enter into a binding contract); because all or part of the applicant's income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. The federal agency that administers compliance with this law concerning this creditor is the Farm Credit Administration, 1501 Farm Credit Drive, McLean, VA 22102-5090.

Furthermore, the Agency would like to remind FCS institutions of the following:

FCS boards and management are encouraged to share this information with their compliance officers and Audit Committees. The examiner-in-charge will contact management teams to evaluate actions taken and to assess the adequacy of borrower rights and compliance controls. If you have any questions about this memorandum, please contact your designated examiner-in-charge or FCA Examiner Keta Mitchell at (972) 869-0550, extension 4141 ( or Operations Risk Program Manager Michael Anderson at (303) 696-9737, extension 2081 (

cc: Federal Farm Credit Banks Funding Corporation
All FCS Service Corporations