Title: PROPOSED RULE--General Provisions; Releasing Information--12 CFR Part 618
Issue Date: 11/10/1992
Agency: FCA
Federal Register Cite: 57 FR 53453
___________________________________________________________________________
FARM CREDIT ADMINISTRATION

12 CFR Part 618

RIN 3052-AB39

General Provisions; Releasing Information


ACTION: Proposed rule.

SUMMARY: The Farm Credit Administration (FCA), by the Farm Credit Administration Board (Board), proposes to amend the regulation at 12 CFR part 618, governing release of information by Farm Credit System (System) directors, officers, and employees. The proposed amendment 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.

DATES: Comments should be received on or before December 10, 1992.

ADDRESSES: Comments may be mailed or delivered (in triplicate) to Patricia W. DiMuzio, Division Director, Regulation Development Division, Office of Examination, Farm Credit Administration, McLean, Virginia 22102-5090. Copies of all communications received will be available for examination by interested parties in the Regulation Development Division, Farm Credit Administration.

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, or

Christine C. Dion, Attorney, Regulatory and Legislative Law Division, Office of General Counsel, Farm Credit Administration, McLean, VA 22102-5090, (703) 883-4020, TDD (703) 883-4444.

SUPPLEMENTARY INFORMATION:

I. General

Amendments to the FCA's appraisal regulation (part 614, subpart F) were reproposed on January 23, 1991, 56 FR 2452. The FCA received comment during the public comment period that the application requirements of some State appraiser certifying and licensing agencies conflict with the requirements of 618.8320 of this chapter, relating to the release of information regarding borrowers and loan applicants.

Commentors asserted that several State appraiser certifying and licensing agencies established in compliance with title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) n1 require that applicants agree to provide the agencies copies of their appraisal reports, which may include borrower information, in support of their applications. Compliance with such an application requirement by a System employee would conflict with the requirements of paragraph (a) of 618.8320, which requires that information regarding the property of borrowers and loan applicants be held in strict confidence by directors, officers and employees of every bank and association. Reports of appraisers are included in paragraph (a) as documents which cannot be exhibited or quoted, except as provided in paragraph (b) of 618.8320. Paragraph (b) does not authorize the release of appraisal reports for the purposes for which the State certifying and licensing agencies are requiring the information. Accordingly, the FCA was requested to resolve the conflict in order that System staff appraisers may seek certification and licensure in such States and continue to be in compliance with 618.8320. Pending consideration of possible regulatory amendments to resolve the conflict, the FCA has issued a no-action letter, Bookletter No. 342-OE, dated October 9, 1992, which states that an institution will not be cited for releasing appraisal information about a borrower contained in an appraisal report, provided that the institution certifies that the information is required in connection with the application of a System staff appraiser; takes appropriate steps to protect the borrower's confidentiality; and determines that the State's appraiser certifying and licensing program makes reasonable provisions to protect borrower information contained in the appraisal report.

n 1 Pub. L. 101-73, 103 Stat. 183 (1989).

II. Proposed Amendments

The FCA proposes to amend 618.8320, governing the release of information by System employees. The section requires the personnel to hold in strict confidence all information regarding the character, the credit standing, and the property of borrowers and applicants for loans.

Specifically, the proposed amendment would authorize the release of information concerning a borrower contained in an appraisal report to any State certifying and licensing agency by a Farm Credit institution, provided that institution certifies that the information is required for purposes of State certification and licensure of an employee as a real estate appraiser and that the institution has taken appropriate steps to protect the borrower's confidentially. Appropriate steps might include redacting identifying borrower information that is not essential to the State's evaluation of the application. In addition, prior to releasing the information, the institution must determine that the State's appraiser licensing and certification program makes reasonable provision to protect the confidentiality of the borrower information contained in the appraisal report.

As an exception under paragraph (b) of 618.8320, the proposed amendment would only be exercised subject to the requirements of the Fair Credit Reporting Act, as prescribed in 618.8320(c). Also, release of information under the proposed amendment would not change a borrower's right to access loan documents, including appraisal reports, as prescribed by 618.8325(b). Furthermore, the proposed amendment would not change the confidential nature of certain information used in the application process. Section 618.8320 would continue to afford protection to such information by requiring that, prior to its release of the information, the institution determines that the State's certification and licensing program makes reasonable provisions for protecting the borrower's confidentiality.

List of Subjects in 12 CFR Part 618

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

For the reasons stated in the preamble, part 618 of chapter VI, title 12 of the Code of Federal Regulations is proposed to be 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: November 4, 1992.

Curtis M. Anderson,

Secretary, Farm Credit Administration Board.

[FR Doc. 92-27108 Filed 11-9-92; 8:45 am]


BILLING CODE 6705-01-M