Title: FINAL RULE--General Provisions; Releasing Information--12 CFR Part 618
Issue Date: 10/06/1993
Agency: FCA
Federal Register Cite: 58 FR 51993
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FARM CREDIT ADMINISTRATION

12 CFR Part 618

RIN 3052-AB39

General Provisions; Releasing Information


ACTION: Final rule.

[*51993]

SUMMARY: The Farm Credit Administration (FCA), by the Farm Credit Administration Board (Board) adopts a final rule amending its regulation governing the release of information by Farm Credit System (System) directors, officers and employees. The FCA's final collateral evaluation regulations, published on November 20, 1992, conflict with the requirements of the regulation concerning release of appraisal information. The amendments to the regulation would allow information concerning borrowers and loan applicants to be given by a Farm Credit institution for the confidential use of authorized representatives of any State certifying and licensing agency, in contemplation of State certification and licensure of a System employee as a real estate appraiser.

EFFECTIVE DATE: The regulation shall become effective upon expiration of 30 days after this publication in the Federal Register during which either or both Houses of Congress are in session. Notice of the effective date will be published in the Federal Register.

FOR FURTHER INFORMATION CONTACT: Dennis K. Carpenter, Senior Policy Analyst, Regulation Development Division, Office of Examination, Farm Credit Administration, McLean, VA 22102-5090, (703) 883-4498, TDD (703) 883-4444.

SUPPLEMENTARY INFORMATION: In connection with the FCA's final collateral evaluation regulations (part 614, subpart F), the FCA received public comments noting that application requirements of some State appraiser certifying and licensing agencies conflict with requirements of 618.8320 relating to the release of information regarding borrowers and loan applicants. See 57 FR 54683, November 20, 1992. The commentors asserted that several State certifying and licensing agencies established in compliance with title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) require that applicants agree to provide the agencies copies of appraisal reports they have prepared, which may include borrower information, in support of their applications. Compliance with such an application requirement by a System employee would cause the employee to violate paragraph (a) of 618.8320 of existing regulations, which requires that letters and statements relative to the property of borrowers and loan applicants be held in strict confidence by directors, officers, and employees of every bank and association. Paragraph (a) identifies reports of inspectors and appraisers as documents that are prohibited from being exhibited or quoted, subject to exceptions identified by paragraph (b) of 618.8320. Existing 618.8320(b) does not authorize the release of appraisal reports for the purposes for which the State certifying and licensing agencies are requiring the information. Proposed amendments to the regulation were published in the Federal Register (57 FR 53453) on November 10, 1992.

The comment period for the proposed amendments to 618.8320 closed on December 10, 1992. The FCA received one letter commenting on the proposed regulations. The Farm Credit Council (Council), on behalf of its membership, provided comments which generally supported the proposed amendments. Additionally, the Council offered suggestions for further clarification of the proposed amendments.

The Council commented that it is unreasonable to expect System entities to be able to determine whether a State's certification and licensing program makes reasonable provisions for protecting the confidentiality of borrower information. FCA disagrees and provides the following as clarification of its expectations.

The proposed 618.8320(b)(10) requires each Farm Credit institution to determine that the State certification and licensing program makes reasonable provisions for protecting the confidentiality of the borrower information contained in the appraisal report. The FCA proposed this paragraph to ensure that borrower confidentiality is not compromised. The FCA believes that confidentiality of certain borrower information contained in an appraisal report should be protected and that Farm Credit institutions should review the State's certification and licensing program to determine that reasonable provisions for protecting confidentiality have been included before releasing such information. A determination of "reasonable provisions" might include an assessment of specific information required by the State's certification and licensing program and whether or not the State's program provides that confidentiality of records will be maintained. Such assurances might be included in specific policies and procedures of the State agency addressing the maintenance of the information or a letter from the State agency describing the handling of the information as confidential.

The System institution should take appropriate steps to protect the confidentiality of any borrower information that is not essential to the State's evaluation of the application. Appropriate steps might include redacting identifying borrower information that is not essential to the State's evaluation of the application.

The Council also requested further clarification of the word "certifies" in proposed 618.8320(b)(10). As used in the proposed regulation, the word "certifies" refers to written documentation that verifies that appraisal information is being provided in connection with an employee's application for State certification and licensing for a real estate appraiser. Such written documentation should be maintained in a general or other appropriate file of the institution and should include a copy or listing of the information provided to the State agency and certification by the institution that the information is being provided in connection with an employee's application for State certification and licensure.

After reviewing the Council's comments, the FCA adopts the [*51994] regulation in final without change, with additional direction and clarification provided by this preamble.

List of Subjects in 12 CFR Part 618

Agriculture, Archives and records, Banks, banking, Insurance, Reporting and recordkeeping requirements, Rural areas, Technical assistance.

For the reasons stated in the preamble, part 618 of chapter VI, title 12 of the Code of Federal Regulations is amended to read as follows:

PART 618-GENERAL PROVISIONS

1. The authority citation for part 618 continues to read as follows:

Authority: Secs. 1.5, 1.11, 1.12, 2.2, 2.4, 2.5, 2.12, 3.1, 3.7, 4.12, 4.13A, 4.25, 4.29, 5.9, 5.10, 5.17 of the Farm Credit Act; 12 U.S.C. 2013, 2019, 2020, 2073, 2075, 2076, 2093, 2122, 2128, 2183, 2200, 2211, 2218, 2243, 2244, 2252.

Subpart G-Releasing Information

2. Section 618.8320 is amended by redesignating paragraph (b)(10) as new paragraph (b)(10)(i) and by adding a new paragraph (b)(10)(ii) to read as follows:

618.8320 -- Data regarding borrowers and loan applicants.

* * * * *

(b) * * *

(10)(i) * * *

(ii) Information concerning borrowers contained in an appraisal report may be given by a Farm Credit institution to any State agency certifying and licensing real estate appraisers provided that the Farm Credit institution:

(A) Certifies that the information is required in connection with an employee's application for certification and licensure and that the institution has taken appropriate steps to protect the confidentiality of any borrower information that is not essential to the State's evaluation of the application; and

(B) Determines that the State certification and licensing program makes reasonable provisions for protecting the confidentiality of the borrower information contained in the appraisal report.

* * * * *

Dated: September 28, 1993.

Curtis M. Anderson,


Secretary, Farm Credit Administration Board.

[FR Doc. 93-24469 Filed 10-5-93; 8:45 am]


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