Farm credit system: Organization— Termination of FCS charter to become financial institution under another Federal or State chartering authority; exit fee calculation,

[Federal Register: February 3, 2000 (Volume 65, Number 23)]

[Proposed Rules]

[Page 5286-5289]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr03fe00-24]

Proposed Rules Federal Register

This section of the FEDERAL REGISTER contains notices to the public of the proposed issuance of rules and regulations. The purpose of these notices is to give interested persons an opportunity to participate in the rule making prior to the adoption of the final rules.

[[Page 5286]]

FARM CREDIT ADMINISTRATION

12 CFR Part 611

RIN 3052-AB86

Organization; Termination of Farm Credit Status

AGENCY: Farm Credit Administration.

ACTION: Proposed rule; supplemental and extension of comment period.

SUMMARY: We are publishing a sample exit fee calculation for a hypothetical Farm Credit System (FCS, Farm Credit or System) bank or association choosing to terminate its Farm Credit status. The purpose of this supplement is to guide FCS institutions through the exit fee calculation described in our proposed termination rule. We are also extending the comment period for the proposed termination rule.

DATES: Please send your comments to us on or before March 6, 2000. The comment period for the proposed rule (64 FR 60370, November 5, 1999) is extended to March 6, 2000.

ADDRESSES: We encourage you to send comments via electronic mail to ``reg-comm@fca.gov'' or through the Pending Regulations section of our interactive website at ``www.fca.gov.'' You may mail or deliver comments to Patricia W. DiMuzio, Director, Regulation and Policy Division, Office of Policy and Analysis, 1501 Farm Credit Drive, McLean, VA, 22102-5090 or send by facsimile transmission to (703) 734- 5784. You may review copies of all comments we receive in the Office of Policy and Analysis, FCA.

FOR FURTHER INFORMATION CONTACT:

Alan Markowitz, Senior Policy Analyst, Office of Policy and Analysis, Farm Credit Administration, McLean, VA 22102-5090, (703) 883-4479; or Rebecca S. Orlich, Senior Attorney, Office of General Counsel, Farm Credit Administration, McLean, VA 22102-5090, (703) 883-4020, TDD (703) 883-4444.

SUPPLEMENTARY INFORMATION: The objectives of our supplemental information are:

To ensure that the readers of our proposed termination rule understand the exit fee calculation for an institution terminating its Farm Credit status; and To extend the comment period on the proposed termination rule.

1. Sample Exit Fee Calculation

   Our proposed termination regulation was published on November 5, 1999 (64 FR 60370). Section 611.1255(a) of our proposal prescribes the calculation of a terminating association's exit fee, and Sec. 611.1255(b) prescribes the calculation of a terminating bank's exit fee. This supplemental information contains hypothetical examples of an association terminating alone and of that same association terminating along with its affiliated bank to illustrate how to apply the procedures described in Sec. 611.1255(a) and (b). (The exit fee calculation for an association is the same whether it terminates alone or with its affiliated bank.) The exit fee calculation worksheet will not be part of the final termination regulations.

   Our examples contain selected balance sheet items for a Farm Credit Bank and a direct lending association. The first part of our examples includes the balance sheet assumptions for each institution. We provide the average daily balances (ADBs) for those items where the proposed rule requires such calculations. We have included only those balance sheet items that are necessary for calculating the exit fees for the bank and the association. For your convenience, notes follow the worksheet and explain which provision of the termination regulations each worksheet line implements.

2. Extension of Comment Period

   In our proposed rule, we provided for a 90-day comment period ending on February 3, 2000. In order to give the public ample time to study the sample exit fee calculation before submitting comments, we are extending the comment period on the proposed rule.

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   Notes to the Worksheet

   All the references are to paragraphs of proposed Sec. 611.1255.

   Line 1. Paragraphs (a)(1), (a)(2), and (a)(3). Assume for this calculation that you have not paid or accrued the amounts described in lines 4-7.

   Line 2. Paragraph (a)(4)(i). This item includes only the expenses incurred in the 12 months before termination.

   Line 3. Paragraph (a)(4)(i).

   Line 4. Paragraph (a)(4)(ii)(A).

   Line 5. Paragraph (a)(4)(ii)(B).

   Lines 6 and 7. Paragraph (a)(4)(ii)(C).

   Lines 8 and 9. Paragraph (a)(4)(ii).

   Lines 10 and 11. Paragraph (a)(4)(iv). This is an adjustment to assets we may require. In this example, we are requiring the terminating association to add back to its assets the termination expenses it paid or accrued more than 12 months before termination.

   Line 12. Paragraphs (a)(1) and (a)(3). Assume for this calculation that you have not paid or accrued the amounts described in lines 4-7.

   Lines 13 and 14. Paragraph (a)(4)(iii).

   Lines 15 and 16. Paragraph (a)(4)(iv). This is an adjustment to liabilities we may require. In this example, we are not requiring the terminating association to make adjustments to its liabilities.

   Line 17. Paragraph (a)(5).

   Lines 18 and 19. Paragraph (a)(6)--association terminating alone, or (b)(1)--association terminating with its affiliated bank. The exit fee calculation ends here for an association terminating without its affiliated bank.

   Line 20. Paragraphs (b)(2), (b)(3), and (b)(4). Assume for this calculation that you have not paid or accrued the amounts described in lines 27-30. We note that proposed paragraph (b)(4) incorrectly refers to ``assets and total capital.'' It should say ``assets and liabilities.''

   Line 21. Paragraph (b)(5)(i)(A).

   Line 22. paragraph (b)(5)(i)(B).

   Lines 23 and 24. Paragraph (b)(5)(i).

   Line 25. Paragraph (b)(5)(ii).

   Line 26. Paragraph (b)(5)(iii)(A).

   Line 27. Paragraph (b)(5)(iii)(B).

   Line 28. Paragraph (b)(5)(iii)(C).

   Lines 29 and 30. Paragraph (b)(5)(iii)(D). In this example, we assume there are no dissenting stockholders.

   Lines 31 and 32. Paragraph (b)(5)(iii).

   Lines 33 and 34. Paragraph (b)(5)(v). This is an adjustment to assets we may require. In this example, we are requiring the terminating bank to add back to its assets the termination expenses it paid or accrued more than 12 months before termination.

   Line 35. Paragraphs (b)(2), (b)(3), and (b)(4). We note that proposed paragraph (b)(4) incorrectly refers to ``assets and total capital.'' It should say ``assets and liabilities.''

   Line 36. Paragraph (b)(5)(ii).

   Line 37. Paragraph (b)(5)(iv).

   Lines 38 and 39. Paragraphs (b)(5)(ii) and (b)(5)(iv).

   Lines 40 and 41. Paragraph (b)(5)(v). This is an adjustment to liabilities we may require. In this example, we are not requiring the terminating bank to make adjustments to its liabilities.

   Lines 42-51. Paragraph (b)(6). These lines show how to combine the balance sheets of the terminating bank and terminating association.

   Line 52. Paragraph (b)(7).

   Lines 53-55. Paragraph (b)(8).

   Line 56. Paragraph (b)(9).

   Dated: January 27, 2000. Vivian L. Portis, Secretary, Farm Credit Administration Board.

   [FR Doc. 00-2333Filed2-2-00; 8:45 am]

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