Farm Credit Administration Approves New Termination Policy
Amendment brought about because of potential Rabobank purchase in 2004.
Compiled by staff
Published: Dec 12, 2005
The Farm Credit Administration Board approved a proposed rule that would amend regulations under which a Farm Credit System bank or association may terminate its FCS status and become a financial institution under another Federal or state chartering authority.
FCA has determined that certain revisions to the regulations would ensure FCA, the institution's board of directors, and stockholders have sufficient time and information to deliberate whether or not to terminate FCS status.
The most significant regulatory change would be to separate FCA's review of stockholder disclosure information from its review of the termination itself. The latter review would occur after a stockholder vote approving the termination.
The rule responds to the controversy that surrounded a proposal last year by Rabobank International to acquire FCS member Farm Credit Services of America, a proposal that was withdrawn because FCA's regulations prohibited stockholder disclosure prior to FCA's review of the exit request.
The proposed rule would also amend the existing regulation in the areas of: communication with stockholders, special analyses and studies, director protection, quorum requirements, and FCA's reasons for disapproving a termination. A fact sheet more fully describing the proposed changes is available on FCA's Web site at www.fca.gov.
The proposed rule will be published in the Federal Register for a 60-day comment period. Comments may be submitted by electronic mail to reg-comm@fca.gov, through the Pending Regulations section of FCA's Web site at www.fca.gov, or through the Federal government Web portal at www.regulations.gov.
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Tagged: farm, Farm Credit Services
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