|Legal Opinion Summary|
|Topic:||Incidental Authority/Corporate Authority to Provide for Employees: May a Farm Credit System bank acquire ineligible residential properties from bank employees when they relocate?|
A Farm Credit System (FCS) bank asked whether it could acquire ineligible residential properties from bank employees when they relocate. OGC concluded that it could.
Sections 1.5(5) and 3.1(5) of the Farm Credit Act authorize each FCS bank to “exercise all of the usual incidents of ownership of real and personal property necessary or convenient to its business.” Sections 1.5(8) and 3.1(8) authorize the banks to provide for their officers, employees, and agents. Finally, sections 1.5(21) and 3.1(16) grant the banks all incidental powers that are necessary or expedient to carry on the business of the bank. Associations have similar authorities.
In light of these authorities, whether an employee’s home is eligible for financing under a bank’s lending authorities is irrelevant. FCS institutions have the power to design compensation and benefits programs for their staff, and relocation assistance is a standard component of many such programs. OGC therefore concluded that offering a relocation package (buying and reselling employees’ homes) is within a bank’s corporate authority to provide for its employees and its incidental powers to achieve that end.
(August 18, 1999)