FCA Legal Opinion Summary

Legal Opinion Summary
Topic:	Incidental Authority: May a bank develop a credit-scoring interface and provide the product to its affiliated associations, other Farm Credit institutions, and Other Financing Institutions?
ID Number:	03-01
Issue Date:	02/26/2003

A bank proposed to develop a credit-scoring interface program and requested our opinion on its authority to enter into the activity. The interface would replace Fair, Isaac and Company's Credit Desk SBSS product. The bank would provide the product to its affiliated associations as well as to other Farm Credit institutions (FCIs) and other financing institutions (OFIs) that have a discount relationship with FCIs. We concluded that the bank had authority to develop and provide the credit-scoring interface to its affiliated associations, other FCIs, and OFIs under its incidental powers. Credit scoring is clearly an activity necessary and expedient to agricultural lending. In addition, FCIs have long-standing authority to assist one another in administrative activities associated with lending. Section 5.6(5) of the 1971 Act granted each Farm Credit District board the power to authorize agreements for the provision of joint services between FCIs. Although Section 5.6 was repealed in the 1987 Act, legislative history supports the view that Congress intended to eliminate district boards, not to curtail the powers of the restructured FCIs to provide administrative services to one another.