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Return to Comments
Standards of Conduct Proposed Rule
Type: Regulation
Federal Register Document Type: Proposed
​Proposed rule to require Farm Credit System institutions to develop a Standards of Conduct program and adopt a Code of Ethics that puts into practice core ethical values as part of its corporate culture.

Text of Comment Letter

September 12, 2018


Submitted via email to:


Mr. Barry F. MardockDeputy Director

Office of Regulatory Policy 

Farm Credit Administration 

1501 Farm Credit Drive 

McLean, VA 22102-5090

RE:  Standards of Conduct – RIN 3052-AC44 / Federal Register 83 (June 15, 2018) 

Dear Mr. Mardock:

As a member of the Board of Directors of Farm Credit Foundations, a 4.25 service corporation in the Farm Credit System,  I appreciate the opportunity to comment on the Farm Credit Administration’s (FCA) proposed rule published in the June 15, 2018 Federal Register addressing requirements for the Farm Credit System regarding standards of conduct. 

My comment is in regards to proposed rule 612.2139(b)(1). The commentary to the proposal states: “Proposed § 612.2139(b)(1) restates the prohibition in current § 612.2150(d) of employees of a System Institution serving as an officer or director of an entity other than a System institution…” However, the text of the proposed regulation itself is vague and can be read as contradictory of the commentary. 

Proposed rule states 612.2139(b)(1) states:

In addition to the prohibitions under paragraph (a) of this section, if you are a System institution employee you must not: (1) Serve as a director or employee of certain entities. Do not serve as a director or employee of an entity that transacts business with your institution, another System institution in the district, (emphasis added) or of any commercial bank, savings and loan or other non-System financial institution. For the purpose of this paragraph, "transacts business" does not include System institution loans to a reportable business entity; service on the board of directors of the Federal Agricultural Mortgage Corporation; or transactions with non-profit entities; or entities in which the System institution has an ownership interest…

Should this language not be amended, and is construed so as to prohibit System employees from serving as a director of another System Institution, the Board of Directors of Farm Credit Foundations could be substantially impacted, as half of its board members are also employees of other System Institutions. 

I respectfully request that FCA amend proposed rule 612.2139(b)(1) to clearly reflect the stated intent in its commentary to 612.2139(b)(1). It is imperative that directors and employees of System Institutions are free to serve in the capacity of a director or employee of other System Institutions, especially those in which their System Institution maintains an ownership interest. 

Again, I thank the FCA for this opportunity to comment on its Standards of Conduct proposal. Please do not hesitate to contact me if I can provide any additional information.


Kim Vanneman
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