FCA Legal Opinion Summary

Legal Opinion Summary
Topic:	Incidental Authority/Excess Capacity: May a Farm Credit System bank that provides a credit-scoring interface program to its affiliated institutions use the program’s excess capacity to provide that service to an unrelated corporate entity?
ID Number:	03-06
Issue Date:	11/05/2003

In a legal opinion issued earlier this year (Summary No. 03-01, dated 2/26/03), OGC opined that a bank, under its incidental authority, could develop a credit-scoring interface program to replace the Fair, Isaac and Company’s Credit Desk SBSS product, which was being phased out. That bank has now asked whether it may use its excess capacity in the program to enable an entirely unrelated corporate entity to use the program. The corporate entity would continue to have its own relationship with Fair Isaac and would not be part of the bank’s aggregated pricing arrangement for its Farm Credit-related customers. The bank would merely provide access to its interface to this corporate entity in return for a transaction fee. Because the bank has excess capacity in its credit-scoring interface program, acquired and maintained in good faith, OGC opined that it may use that capacity by making the credit-scoring interface available to this corporate entity, thereby avoiding waste and helping defray its operating costs.