Organization; Disclosure to Shareholders; Disclosure to Investors in System-Wide and Consolidated Bank Debt Obligations of the Farm Credit System; Advisory Vote, 34621-34622 [2014-14227]

Download as PDF 34621 Rules and Regulations Federal Register Vol. 79, No. 117 Wednesday, June 18, 2014 This section of the FEDERAL REGISTER contains regulatory documents having general applicability and legal effect, most of which are keyed to and codified in the Code of Federal Regulations, which is published under 50 titles pursuant to 44 U.S.C. 1510. The Code of Federal Regulations is sold by the Superintendent of Documents. Prices of new books are listed in the first FEDERAL REGISTER issue of each week. FARM CREDIT ADMINISTRATION 12 CFR Parts 611, 620, and 630 RIN 3052–AD00 Organization; Disclosure to Shareholders; Disclosure to Investors in System-Wide and Consolidated Bank Debt Obligations of the Farm Credit System; Advisory Vote Farm Credit Administration. Final rule. AGENCY: ACTION: The Farm Credit Administration (FCA) adopts as final without change an interim final rule which amended FCA regulations to remove the requirement that Farm Credit System (System) banks and associations hold non-binding, advisory votes on senior officer compensation in certain circumstances. DATES: Effective Date: June 18, 2014. FOR FURTHER INFORMATION CONTACT: Deborah Wilson, Associate Director, Office of Regulatory Policy, Farm Credit Administration, McLean, VA 22102–5090, (703) 883–4224, TTY (703) 883–4056, or Laura McFarland, Senior Counsel, Office of General Counsel, Farm Credit Administration, McLean, VA 22102–5090, (703) 883–4020, TTY (703) 883–4056. SUPPLEMENTARY INFORMATION: On March 31, 2014, the FCA published the interim final rule (79 FR 17854) removing the FCA regulatory requirement that (1) associations hold non-binding advisory votes on senior officer compensation when 5 percent of the voting stockholders petition for the vote, and (2) Farm Credit banks and associations hold non-binding advisory votes on senior officer compensation if senior officer compensation increased by 15 percent or more from the previous reporting period (hereafter referred to as ehiers on DSK2VPTVN1PROD with RULES SUMMARY: VerDate Mar<15>2010 15:22 Jun 17, 2014 Jkt 232001 ‘‘advisory voting rule’’).1 The interim final rule responded to the provisions of Title VI of the Consolidated Appropriations Act, 2014 (Appropriations Act) 2 and the ‘‘Findings by Congress’’ in section 5404 of the Agricultural Act of 2014 (Farm Bill).3 In adopting the interim final rule, the FCA explained the Appropriations Act provided that no funds available to the FCA during the current fiscal year may be used to ‘‘implement or enforce’’ the advisory voting rule and the Farm Bill directed the FCA to review its rules to ensure they reflect Congressional intent that a primary responsibility of the boards of directors of System institutions is to oversee compensation practices. The FCA received two comments on the interim final rule. In its comment letter, the Farm Credit Council (Council), on behalf of its System members, supported the FCA deleting the non-binding, advisory vote provisions in response to the actions taken by Congress in both the Appropriations Act and the Farm Bill. In its comment letter, the Independent Community Bankers of America (ICBA) expressed the view that the FCA did not need to remove the advisory vote provisions in order to comply with recent Congressional action and suggested that FCA modify the rule through a re-proposal. The ICBA asserted that neither the Appropriations Act nor the Farm Bill require the FCA to withdraw the advisory vote provisions and that a re-proposal would pose no compliance conflict. The ICBA comment letter also mentioned several times the need to allow non-binding, advisory votes at System institutions. After careful consideration of the comments, the FCA has determined that no changes to the interim final rule are warranted. FCA believes that further notice and comment rulemaking on this subject would be neither practical nor meaningful based on the aforementioned Congressional actions. We note, however, in response to the commenter that advisory votes are not prohibited by this rule. System institutions may employ advisory votes of shareholders on a variety of topics. Therefore, the FCA adopts as a final rule the interim final rule, which removed from parts 611, 620, and 630 the requirement for advisory voting. Specifically, the following non-binding advisory voting provisions are withdrawn: D § 611.100(a), defining the term ‘‘advisory vote’’; D § 611.360, requiring policies and procedures for non-binding, advisory votes on senior officer compensation; D § 611.410, addressing non-binding, advisory votes on senior officer compensation; D § 620.5(a)(11), requiring disclosure of any advisory votes held during the reporting year at the institution; D § 620.6(c)(6), requiring disclosure (adjacent to the compensation table) in the annual report of a stockholder’s right to petition for a non-binding, advisory vote on senior officer compensation; and D § 630.20(i) (last sentence), requiring disclosure of any advisory votes held during the reporting year within the System. All other regulatory provisions and changes resulting from the October 3, 2012 (77 FR 60582) rulemaking remain in effect. In addition, the interim final rule and this action close the rulemaking petition filed by the Council on December 4, 2012.4 1 See 77 FR 60582 (10/03/2012). The rule was effective December 17, 2012, but non-binding, advisory votes on compensation increases of 15 percent or more were not required until 2015 (77 FR 76215, December 27, 2012). 2 113 Public Law 76, 128 Stat. 5 (H.R. 3547), signed by the President on January 17, 2014. 3 113 Public Law 79, 128 Stat. 649 (H.R. 2642), signed by the President on February 7, 2014. 4 On December 4, 2012, the Council, on behalf of the System banks and associations, filed a petition requesting that the FCA repeal the advisory voting rule. Interested parties have the right to petition a Federal agency to issue, amend, or repeal regulations under 5 U.S.C. 553(e). The FCA published the petition in the Federal Register on February 19, 2013 (78 FR 11551), and invited comments. PO 00000 Frm 00001 Fmt 4700 Sfmt 4700 Regulatory Flexibility Act Pursuant to section 605(b) of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), the FCA hereby certifies that this final rule will not have a significant economic impact on a substantial number of small entities. Each of the banks in the System, considered together with its affiliated associations, has assets and annual income in excess of the amounts that would qualify them as small entities. Therefore, System institutions are not ‘‘small entities’’ as defined in the Regulatory Flexibility Act. E:\FR\FM\18JNR1.SGM 18JNR1 34622 Federal Register / Vol. 79, No. 117 / Wednesday, June 18, 2014 / Rules and Regulations SUPPLEMENTARY INFORMATION: 12 CFR Part 611 Agriculture, Banks, banking, Rural areas. ehiers on DSK2VPTVN1PROD with RULES List of Subjects I. Background On June 29, 2012, the Bureau published in the Federal Register the final Rules of Practice for Adjudication 12 CFR Part 620 Proceedings pursuant to sections Accounting, Agriculture, Banks, 1022(b)(1) and 1053(e) of the Doddbanking, Reporting and recordkeeping Frank Act, 12 U.S.C. 5512(b)(1) & requirements, Rural areas. 5563(e).1 That final rule, however, does not apply to the issuance of a TCDO 12 CFR Part 630 pursuant to section 1053(c) of the DoddAccounting, Agriculture, Banks, Frank Act.2 The Bureau previously banking, Organization and functions invited comments as to whether special (Government agencies), Reporting and rules governing such proceedings are recordkeeping requirements, Rural necessary and, if so, what the rules areas. should provide.3 One commenter Accordingly, the interim rule recommended that the Bureau amending 12 CFR parts 611, 620, and promulgate rules governing temporary 630, which was published on March 31, cease-and-desist proceedings initiated 2014 (79 FR 17854), is adopted as a final pursuant to section 1053(c) of the Doddrule without changes. Frank Act and pointed to the Federal Dated: June 12, 2014. Deposit Insurance Corporation’s (FDIC) Dale L. Aultman, rules governing temporary cease-andSecretary, Farm Credit Administration Board. desist proceedings, 12 CFR 308.131, as an example of such rules.4 [FR Doc. 2014–14227 Filed 6–17–14; 8:45 am] On September 26, 2013, 78 FR 59163, BILLING CODE 6705–01–P the Bureau published its interim final rule establishing procedures for the issuance of a temporary cease-and-desist BUREAU OF CONSUMER FINANCIAL order (TCDO) pursuant to section PROTECTION 1053(c) of the Dodd-Frank Act. In developing the interim final rule, the 12 CFR Part 1081 Bureau considered the procedures [Docket No.: CFPB–2013–0030] related to temporary cease-and-desist RIN 3170–AA29 orders that are followed by other regulatory agencies, including the FDIC, Rules of Practice for Issuance of the Securities and Exchange Temporary Cease-and-Desist Orders Commission, and the Office of the Comptroller of the Currency. The AGENCY: Bureau of Consumer Financial interim final rule most closely follows Protection. the FDIC’s approach as codified in 12 ACTION: Final rule. CFR 308.131. The Bureau issued the SUMMARY: On September 26, 2013, 78 FR interim final rule to clarify (1) the basis for the issuance of a TCDO; (2) the 59163, the Consumer Financial Protection Bureau (Bureau) published in content, scope, and form of a TCDO; (3) the procedures governing the issuance the Federal Register an interim final of a TCDO and the remedies available to rule establishing procedures for the issuance of a temporary cease-and-desist the Bureau in issuing a TCDO; and (4) the rights of persons subject to a TCDO. order (TCDO) pursuant to section The interim final rule described each 1053(c) of the Dodd-Frank Wall Street section of the rule and explained the Reform and Consumer Protection Act basis of the rule with reference to rules (Dodd-Frank Act), which requires the of other agencies as appropriate. After Bureau to prescribe rules establishing reviewing and considering the single procedures for the conduct of public comment offered, the Bureau adjudication proceedings. After adopts the interim final rule without reviewing and considering the single change. public comment offered on its interim final rule, the Bureau adopts the interim II. Legal Authority final rule without change. The Bureau promulgates this final DATES: This final rule takes effect on rule pursuant to its authority to July 18, 2014. implement section 1053 of the DoddFOR FURTHER INFORMATION CONTACT: John R. Coleman, Senior Counsel, Legal 1 See 77 FR 39058 (June 29, 2012) (codified at 12 Division, Consumer Financial CFR Part 1081). Protection Bureau, 1700 G Street NW., 2 Id. at 39058. 3 See 76 FR 45338, 45338 (July 28, 2011). Washington, DC 20552; at (202) 435– 4 See 77 FR 39058, 39060 (June 29, 2012). 7254. VerDate Mar<15>2010 15:22 Jun 17, 2014 Jkt 232001 PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 Frank Act, 12 U.S.C. 5563(e), as well as its general rulemaking authority to promulgate rules necessary or appropriate to carry out the Federal consumer financial laws, 12 U.S.C. 5512(b)(1). III. Public Comment on the Interim Final Rule In response to the interim final rule, the Bureau received one comment letter that did not contain any specific comments or suggestions pertaining to the interim final rule. Accordingly, the Bureau is adopting the interim final rule without change. IV. Section 1022(b) Provisions In developing the interim final and final rules, the Bureau has considered the potential benefits, costs, and impacts and has consulted or offered to consult with the prudential regulators, the Department of Housing and Urban Development, and the Federal Trade Commission, including with regard to consistency with any prudential, market, or systemic objectives administered by such agencies.5 The Dodd-Frank Act requires the Bureau to prescribe rules establishing such procedures as may be necessary to carry out section 1053 of the Act, which provides for temporary cease-and-orders in subsection (c). The final rule itself does not impose significant costs upon covered persons, but, consistent with section 1053, provides a straightforward and efficient process for the issuance of a temporary cease-and-desist order, and a direct route to judicial review. The final rule has no unique impact on insured depository institutions or insured credit unions with $10 billion or less in assets described in section 1026(a) of the Dodd-Frank Act, nor does it have a unique impact on rural consumers. V. Regulatory Requirements As the Bureau noted in publishing the interim final rule, this rule relates solely 5 Section 1022(b)(2)(A) of the Dodd-Frank Act calls for the Bureau to consider the potential benefits and costs of a regulation to consumers and covered persons, including the potential reduction of access by consumers to consumer financial products or services; the impact on depository institutions and credit unions with $10 billion or less in total assets as described in section 1026 of the Dodd-Frank Act; and the impact on consumers in rural areas. Section 1022(b)(2)(B) directs the Bureau to consult with the appropriate prudential regulators or other Federal agencies regarding consistency with objectives those agencies administer. The manner and extent to which these provisions apply to a rulemaking of this kind, which establishes Bureau procedures and imposes no standards of conduct, is unclear. Nevertheless, to inform this rulemaking more fully, the Bureau performed the analyses and consultations described in those provisions of the Dodd-Frank Act. E:\FR\FM\18JNR1.SGM 18JNR1

Agencies

Farm Credit Administration

[Federal Register Volume 79, Number 117 (Wednesday, June 18, 2014)]
[Rules and Regulations]
[Pages 34621-34622]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-14227]



========================================================================
Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 
Prices of new books are listed in the first FEDERAL REGISTER issue of each 
week.

========================================================================


Federal Register / Vol. 79, No. 117 / Wednesday, June 18, 2014 / 
Rules and Regulations

[[Page 34621]]



FARM CREDIT ADMINISTRATION

12 CFR Parts 611, 620, and 630

RIN 3052-AD00


Organization; Disclosure to Shareholders; Disclosure to Investors 
in System-Wide and Consolidated Bank Debt Obligations of the Farm 
Credit System; Advisory Vote

AGENCY: Farm Credit Administration.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Farm Credit Administration (FCA) adopts as final without 
change an interim final rule which amended FCA regulations to remove 
the requirement that Farm Credit System (System) banks and associations 
hold non-binding, advisory votes on senior officer compensation in 
certain circumstances.

DATES: Effective Date: June 18, 2014.

FOR FURTHER INFORMATION CONTACT:
Deborah Wilson, Associate Director, Office of Regulatory Policy, Farm 
Credit Administration, McLean, VA 22102-5090, (703) 883-4224, TTY (703) 
883-4056,
or
Laura McFarland, Senior Counsel, Office of General Counsel, Farm Credit 
Administration, McLean, VA 22102-5090, (703) 883-4020, TTY (703) 883-
4056.

SUPPLEMENTARY INFORMATION: On March 31, 2014, the FCA published the 
interim final rule (79 FR 17854) removing the FCA regulatory 
requirement that (1) associations hold non-binding advisory votes on 
senior officer compensation when 5 percent of the voting stockholders 
petition for the vote, and (2) Farm Credit banks and associations hold 
non-binding advisory votes on senior officer compensation if senior 
officer compensation increased by 15 percent or more from the previous 
reporting period (hereafter referred to as ``advisory voting 
rule'').\1\ The interim final rule responded to the provisions of Title 
VI of the Consolidated Appropriations Act, 2014 (Appropriations Act) 
\2\ and the ``Findings by Congress'' in section 5404 of the 
Agricultural Act of 2014 (Farm Bill).\3\ In adopting the interim final 
rule, the FCA explained the Appropriations Act provided that no funds 
available to the FCA during the current fiscal year may be used to 
``implement or enforce'' the advisory voting rule and the Farm Bill 
directed the FCA to review its rules to ensure they reflect 
Congressional intent that a primary responsibility of the boards of 
directors of System institutions is to oversee compensation practices.
---------------------------------------------------------------------------

    \1\ See 77 FR 60582 (10/03/2012). The rule was effective 
December 17, 2012, but non-binding, advisory votes on compensation 
increases of 15 percent or more were not required until 2015 (77 FR 
76215, December 27, 2012).
    \2\ 113 Public Law 76, 128 Stat. 5 (H.R. 3547), signed by the 
President on January 17, 2014.
    \3\ 113 Public Law 79, 128 Stat. 649 (H.R. 2642), signed by the 
President on February 7, 2014.
---------------------------------------------------------------------------

    The FCA received two comments on the interim final rule. In its 
comment letter, the Farm Credit Council (Council), on behalf of its 
System members, supported the FCA deleting the non-binding, advisory 
vote provisions in response to the actions taken by Congress in both 
the Appropriations Act and the Farm Bill. In its comment letter, the 
Independent Community Bankers of America (ICBA) expressed the view that 
the FCA did not need to remove the advisory vote provisions in order to 
comply with recent Congressional action and suggested that FCA modify 
the rule through a re-proposal. The ICBA asserted that neither the 
Appropriations Act nor the Farm Bill require the FCA to withdraw the 
advisory vote provisions and that a re-proposal would pose no 
compliance conflict. The ICBA comment letter also mentioned several 
times the need to allow non-binding, advisory votes at System 
institutions.
    After careful consideration of the comments, the FCA has determined 
that no changes to the interim final rule are warranted. FCA believes 
that further notice and comment rulemaking on this subject would be 
neither practical nor meaningful based on the aforementioned 
Congressional actions. We note, however, in response to the commenter 
that advisory votes are not prohibited by this rule. System 
institutions may employ advisory votes of shareholders on a variety of 
topics.
    Therefore, the FCA adopts as a final rule the interim final rule, 
which removed from parts 611, 620, and 630 the requirement for advisory 
voting. Specifically, the following non-binding advisory voting 
provisions are withdrawn:
    [ssquf] Sec.  611.100(a), defining the term ``advisory vote'';
    [ssquf] Sec.  611.360, requiring policies and procedures for non-
binding, advisory votes on senior officer compensation;
    [ssquf] Sec.  611.410, addressing non-binding, advisory votes on 
senior officer compensation;
    [ssquf] Sec.  620.5(a)(11), requiring disclosure of any advisory 
votes held during the reporting year at the institution;
    [ssquf] Sec.  620.6(c)(6), requiring disclosure (adjacent to the 
compensation table) in the annual report of a stockholder's right to 
petition for a non-binding, advisory vote on senior officer 
compensation; and
    [ssquf] Sec.  630.20(i) (last sentence), requiring disclosure of 
any advisory votes held during the reporting year within the System.

All other regulatory provisions and changes resulting from the October 
3, 2012 (77 FR 60582) rulemaking remain in effect. In addition, the 
interim final rule and this action close the rulemaking petition filed 
by the Council on December 4, 2012.\4\
---------------------------------------------------------------------------

    \4\ On December 4, 2012, the Council, on behalf of the System 
banks and associations, filed a petition requesting that the FCA 
repeal the advisory voting rule. Interested parties have the right 
to petition a Federal agency to issue, amend, or repeal regulations 
under 5 U.S.C. 553(e). The FCA published the petition in the Federal 
Register on February 19, 2013 (78 FR 11551), and invited comments.
---------------------------------------------------------------------------

Regulatory Flexibility Act

    Pursuant to section 605(b) of the Regulatory Flexibility Act (5 
U.S.C. 601 et seq.), the FCA hereby certifies that this final rule will 
not have a significant economic impact on a substantial number of small 
entities. Each of the banks in the System, considered together with its 
affiliated associations, has assets and annual income in excess of the 
amounts that would qualify them as small entities. Therefore, System 
institutions are not ``small entities'' as defined in the Regulatory 
Flexibility Act.

[[Page 34622]]

List of Subjects

12 CFR Part 611

    Agriculture, Banks, banking, Rural areas.

12 CFR Part 620

    Accounting, Agriculture, Banks, banking, Reporting and 
recordkeeping requirements, Rural areas.

12 CFR Part 630

    Accounting, Agriculture, Banks, banking, Organization and functions 
(Government agencies), Reporting and recordkeeping requirements, Rural 
areas.

    Accordingly, the interim rule amending 12 CFR parts 611, 620, and 
630, which was published on March 31, 2014 (79 FR 17854), is adopted as 
a final rule without changes.

    Dated: June 12, 2014.
Dale L. Aultman,
Secretary, Farm Credit Administration Board.
[FR Doc. 2014-14227 Filed 6-17-14; 8:45 am]
BILLING CODE 6705-01-P

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