BOAR D O F GOVERNOR S 

OF THE 

FEDERAL RESERVE SYSTEM 

WASHINGTON, D. C. 2055 1 

ADDRESS OFFICIAL CORRESPONDENCE 

TO THE BOARD 

April 24, 2012 

Mr. James A. Israel 

President 

John Deere Financial 

6400 NW 86th Street 

P.O. Box 6600 

Johnston, Iowa 50131 

Dear Mr. Israel: 

This is in response to your letter dated January 17, 2012, 

requesting that Deere & Company ("Deere"), Moline, Illinois, be granted 

exemptions from the Board's regulatory reporting requirements for savings 

and loan holding companies ("SLHCs"). 

[footnote] 1

 The Board has published a final notice describing the regulatory reporting 

requirements for SLHCs. 76 Federal Register 81933 (December 29, 2011) 

("December Notice"). [end of footnote 1.] 

You have requested that the Board consider the majority of 

Deere's assets to be derived from its commercial activities, thus qualifying 

Deere for the exemption in the December Notice. In your letter, you argue 

that although the majority of Deere's assets are technically financial, many 

of those assets are derived from its commercial operations. In particular, 

you contend that the Board should consider Deere's installment financing, 

leasing, floor plan financing, and trade receivables activities to be derived 

from its commercial operations. If the assets derived from those activities 

were considered commercial, Deere would qualify for the exemption from 

transitioning to the Board's reports in the December Notice. 

Deere, through John Deere Capital Corporation ("Deere 

Capital"), Reno, Nevada, provides significant financial services to its dealers 

and customers. Although those services are indirectly related to Deere's 
commercial products, the activity and the resulting assets are derived from 

the financial services provided and are permissible for a SLHC under the 

Home Owners' Loan Act. As a result, the majority of Deere's assets are 

financial and they do not qualify for the exemption in the December Notice. 

Alternatively, you requested that Deere be granted either (1) a 

complete exemption from transitioning to the Board's regulatory reports or 

(2) a temporary exemption from complying with the Board's reporting 

requirements until the Board finalizes the intermediate holding company 

("IHC") regulations for grandfathered unitary SLHCs and makes a final 

decision on Deere's IHC structure. 

Based on all the facts of record, the Director of the Division of 

Banking Supervision and Regulation, acting pursuant to authority delegated 

by the Board, and after consulting with the General Counsel, has determined 

that it is appropriate to grant Deere a partial exemption from the Board's 

regulatory reporting requirements. In order to minimize the collection of 

information that is not meaningful in assessing the financial condition of a 

financial institution, Deere Capital will be considered the top-tier SLHC for 

regulatory reporting purposes until further notice. Deere Capital comprises 

approximately $23 billion of Deere's $48 billion of total consolidated assets. 

Deere's financial activities are principally conducted through Deere Capital. 

Unlike the assets at the top-tier parent, which are commercial in nature, the 

assets and activities of Deere Capital and its subsidiaries fit within the 

framework established in the Board's regulatory reports. The Board, 

however, reserves the right at its discretion to require regulatory reporting 

from Deere as the top-tier SLHC. In addition, the Board will continue to 

have the authority to request information during the supervisory process that 

is needed to effectively assess the impact of Deere's commercial operations 

on, and its ability to serve as a source of strength to, Deere Capital and its 

subsidiaries. 

Additionally, Deere Capital will be exempted from filing the 

FR Y-9C/LP until the September 30, 2012, reporting period and may submit 

the reports at that time on a best-efforts basis. These reports will be granted 

confidential treatment. 

[footnote] 2 Deere Capital should submit all reports 

in the reporting instructions. Certain reports, such as the FR 2320, H-(b)11, 

and the FR Y-6 can be submitted on a fiscal-year basis. [end of footnote 2.] 

Deere Capital is expected to be in full compliance 
with the FR Y-9C/LP filing requirements for the reporting period ending on 

December 31, 2012. The reporting deadlines for other reports, including the 

H-(b)l 1 and the FR Y-6, will not change. 

[footnote] 3

 As outlined in the December Notice, Deere Capital should submit its first 

FR Y-6 for year-end 2012. Deere Capital should submit other reports 

required under the notice, such as the FR Y-l 1 and FR Y-12 (nonbank 

subsidiaries and investments), FR Y-8 (affiliate transactions), and FR 2314 

(foreign subsidiaries), beginning in 2013. The December Notice did not 

extend the FR Y-10 (organizational structure and activities) report to SLHCs 

but indicated that the Board would issue a separate notice on that form 

shortly. [end of footnote 3.] 

Deere should continue to submit 

the FR 2320 report during the temporary exemption period (i.e., for the 

March 31 and June 30, 2012, reporting periods). 

A two-quarter delay in filing the FR Y-9C/LP should provide 

an appropriate amount of time to allow Deere Capital to rationalize data 

sources, design regulatory reporting tools, and establish a regulatory 

governance framework that will yield more reliable and stable regulatory 

reporting infrastructure with better quality data. Deere Capital also has been 

granted additional flexibility to provide best estimates for its first reporting 

period to assist with the transition. These terms are consistent with the 

regulatory reporting relief that the Board previously granted to investment 

banks and other companies transitioning to the Board's regulatory reporting 

requirements. 

[footnote] 4

 In 2009, the Board granted several investment banks and other companies 

that recently converted to bank holding company status exemptions from 

and permitted modifications to the Board's reporting requirements. 

See, e.g.. Board letters dated February 5, 2009, to Colm Kelleher (Morgan 

Stanley) and to Sarah Smith (The Goldman Sachs Group, Inc.). In March 

2012, the Board granted a SLHC a partial exemption from the Board's 

reporting requirements. Board letter dated March 30, 2012, to David Nason 

(General Electric Company). [end of footnote 4.] 

Deere also requested that if the Board does not grant it a 

complete exemption from filing reports, any reports provided by Deere be 

granted confidential treatment under exemption 4 in the Freedom of 

Information Act ("exemption 4"). 

[footnote] 5

 5 U.S.C. § 552(b)(4) (commercial or financial information). [end of footnote 5.] 

Additionally, Deere requests that any 
disclosure of information contained in reports submitted to the Board be 

delayed 60 days in order to permit corresponding filings with the Securities 

and Exchange Commission. 

In order to establish a basis for withholding information under 

exemption 4, Deere must establish that disclosure of the information would 

be reasonably likely to result in "substantial competitive harm." 

[footnote] 6 National Parks & Conservation Ass'n v. Kleppe, 547 F.2d 673, 677-78 

(D.C. Cir. 1976). [end of footnote 6.] 

The Board 

customarily withholds best-efforts data as confidential under this standard 

and would do so for the FR Y9-C/LP reports submitted as of September 30, 

2012. Deere, however, did not provide any factual details on which the 

Board could conclude that the release of any other reports would be 

reasonably likely to result in substantial competitive harm to Deere. 

Accordingly, no other reports will be accorded confidential treatment at this 

time. 

If you have any question, please contact Catharine Lemieux, 

Executive Vice President at 312-322-4246, or Andre Reynolds, Assistant 

Vice President at (312) 322-6414, Federal Reserve Bank of Chicago. 

Very truly yours, 

[signed] 

Deputy Secretary of the Board 

cc: Catharine Lemieux, Executive Vice President 

Andre Reynolds, Assistant Vice President 

Douglas Kasl, Vice President 

Craig Volk, Lead Examiner 

Federal Reserve Bank of Chicago