82238 Federal Register / Vol. 88, No. 225 / Friday, November 24, 2023 / Rules and Regulations 

III. Procedural Issues and Regulatory 

Review 

DOE has concluded that the 

determinations made pursuant to the 

various procedural requirements 

applicable to the June 26, 2023, final 

rule remain unchanged for this final 

rule technical correction. These 

determinations are set forth in the June 

26, 2023, final rule. 88 FR 41289. 

Pursuant to the Administrative 

Procedure Act, 5 U.S.C. 553(b), DOE 

finds that there is good cause to not 

issue a separate notice to solicit public 

comment on the changes contained in 

this document. Neither the errors nor 

the corrections in this document affect 

the substance of the June 26, 2023, final 

rule or any of the conclusions reached 

in support of the final rule. For these 

reasons, this rule is not subject to the 

30-day delay in effective date 

requirement of 5 U.S.C. 553(d) 

otherwise applicable to rules that make 

substantive changes. 

IV. Approval by the Office of the 

Secretary of Energy 

The Secretary of Energy has approved 

publication of this final rule. 

List of Subjects in 10 CFR Part 1045 

Classified information, 

Declassification, Formerly restricted 

data, Restricted data, Transclassified 

foreign nuclear information. 

Signing Authority 

This document of the Department of 

Energy was signed on November 14, 

2023, by David Turk, Deputy Secretary 

of Energy. That document with the 

original signature and date is 

maintained by DOE. For administrative 

purposes only, and in compliance with 

requirements of the Office of the Federal 

Register, the undersigned DOE Federal 

Register Liaison Officer has been 

authorized to sign and submit the 

document in electronic format for 

publication, as an official document of 

the Department of Energy. This 

administrative process in no way alters 

the legal effect of this document upon 

publication in the Federal Register. 

Signed in Washington, DC, on November 

20, 2023. 

Treena V. Garrett, 

Federal Register Liaison Officer, U.S. 

Department of Energy. 

For the reasons set forth in the 

preamble, the Department of Energy 

corrects part 1045 of chapter X of title 

10 of the Code of Federal Regulations by 

making the following correcting 

amendments: 

PART 1045—NUCLEAR 

CLASSIFICATION AND 

DECLASSIFICATION 

■ 1. The authority citation for part 1045 

continues to read as follows: 

Authority: 42 U.S.C. 2011; E.O. 13526, 75 

FR 705, 3 CFR 2010 Comp., pp. 298–327. 

§ 1045.80 [Amended] 

■ 2. Amend § 1045.80 in paragraph (a) 

by removing the words ‘‘Associate 

Under Secretary of Environment, 

Health, Safety and Security’’ and adding 

in their place the words ‘‘Director, 

Office of Environment, Health, Safety 

and Security’’. 

§ 1045.180 [Amended] 

■ 3. Amend § 1045.180 in paragraphs 

(b)(2), (d), and (e)(1) and (2) by 

removing the words ‘‘Associate Under 

Secretary for Environment, Health, 

Safety and Security’’ and adding in their 

place the words ‘‘Director, Office of 

Environment, Health, Safety and 

Security’’. 

§ 1045.210 [Amended] 

■ 4. Amend § 1045.210 in paragraph (a) 

by removing the words ‘‘Associate 

Under Secretary for Environment, 

Health, Safety and Security’’ and adding 

in their place the words ‘‘Director, 

Office of Environment, Health, Safety 

and Security’’. 

§ 1045.215 [Amended] 

■ 5. Amend § 1045.215 by: 

■ a. Removing the words ‘‘Associate 

Under Secretary for Environment, 

Health, Safety and Security’’ and adding 

in their place the words ‘‘Director, 

Office of Environment, Health, Safety 

and Security’’ in paragraph (a); and 

■ b. Removing the words ‘‘Associate 

Under Secretary for Environment, 

Health, Safety and Security’s’’ and 

adding in their place the words 

‘‘Director, Office of Environment, 

Health, Safety and Security’s’’ in 

paragraph (b). 

§ 1045.220 [Amended] 

■ 6. Amend § 1045.220 in paragraphs (a) 

and (b) by removing the words 

‘‘Associate Under Secretary for 

Environment, Health, Safety and 

Security’’ and adding in their place the 

words ‘‘Director, Office of Environment, 

Health, Safety and Security’’. 

[FR Doc. 2023–25923 Filed 11–22–23; 8:45 am] 

BILLING CODE 6450–01–P 

FARM CREDIT ADMINISTRATION 

12 CFR Parts 619 and 627 

RIN 3052–AD48 

Conservators and Receivers 

AGENCY: Farm Credit Administration. 

ACTION: Final rule. 

SUMMARY: The Farm Credit 

Administration (FCA, we, our) is 

adopting a final rule that updates, 

restructures, and reorganizes our 

regulations that govern the appointment 

of the Farm Credit System Insurance 

Corporation (FCSIC) as the conservator 

or receiver of Farm Credit System (FCS 

or System) banks, associations, service 

corporations, and the Federal Farm 

Credit Banks Funding Corporation 

(Funding Corporation). The final rule 

also ensures FCA conservatorship and 

receivership regulations are consistent 

with the Agricultural Improvement Act 

of 2018 (2018 Farm Bill), which 

strengthens, updates, and clarifies 

FCSIC’s powers as the conservator or 

receiver of these FCS institutions. 

Additionally, the final rule consolidates 

and reorganizes our conservatorship and 

receivership regulations, so they are 

easier to understand and use. We also 

made conforming amendments to 

definitional regulations to clarify that 

bridge System banks, while subject to 

FCA supervision and oversight, are not 

subject to FCA regulations that apply to 

other System institutions. We revised 

these definitions because several 

provisions of the Farm Credit Act 

expressly exempt bridge banks from 

certain legal requirements that apply to 

viable and solvent System banks. 

DATES: This final rule will be effective 

30 days after publication in the Federal 

Register during which either or both 

Houses of Congress are in session. We 

will publish a document announcing 

the effective date in the Federal 

Register. 

FOR FURTHER INFORMATION CONTACT: 

Technical information: Jason Moore, 

Associate Director, Office of Regulatory 

Policy, Farm Credit Administration, 

McLean, VA 22102–5090, (703) 883– 

4414, TTY (703) 883–4056; or 

Legal Information: Karen Hunter, 

Attorney Advisor, or Richard A. Katz, 

Senior Counsel, Office of General 

Counsel, Farm Credit Administration, 

McLean, VA 22102–5090, (703) 883– 

4020, TTY (703) 883–4056. 

SUPPLEMENTARY INFORMATION: 

I. Objectives 

The objectives of this final rule are to: 

• Consolidate, reorganize, and update 

our regulations governing FCA’s 


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1Public Law 115–334, 132 Stat. 4490 (Dec. 20, 

2018). 

2Section 4.12 of the Act governs both the 

voluntary and involuntary dissolution of System 

institutions. Subpart D of part 627 addresses the 

voluntary liquidation of System banks, associations, 

service corporations, and the Funding Corporation. 

However, the voluntary liquidation of these System 

institutions is outside the scope of this rulemaking. 

3 In contrast to all other FCS institutions, section 

8.41 governs the conservatorship, liquidation, and 

receivership of Farmer Mac. Under section 

8.41(c)(1)(A) of the Act, FCA is allowed, but not 

required, to appoint FCSIC as the conservator or 

receiver of Farmer Mac. Regulations in part 650, 

subpart B, govern the conservatorship or 

receivership of Farmer Mac. For these reasons, this 

rulemaking does not apply to the conservatorship 

or receivership of Farmer Mac. 

4These conditions include: (1) insolvency, in that 

the assets of the institution are less than its 

obligations to its creditors and others, including its 

members; (2) substantial dissipation of assets or 

earnings due to any violation of law, rules, or 

regulations, or to any unsafe or unsound practice; 

(3) an unsafe or unsound condition to transact 

business; (4) willful violation of a cease and desist 

order that has become final; (5) concealment of 

books, papers, records, or assets of the institution 

or refusal to submit books, papers, records or other 

material relating to the affairs of the institution for 

inspection to any examiner or to any lawful agent 

of FCA; (6) the institution in unable to timely pay 

principal or interest on any insured obligation 

issued by the institution. 

5Additionally, the legislative history to the 2018 

Farm Bill further reveals Congress intended FCSIC’s 

authorities ‘‘to be functionally equivalent to the 

parallel authorities of the [FDIC].’’ See Conf. Report 

No. 115–1072, 115th Cong., 2nd Sess., (Dec. 10, 

2018) p. 648. 

6According to section 5.61C(h)(2)(A) of the Act, 

FCA may charter a bridge System bank only if it 

determines that: (1) the amount which is reasonably 

necessary to operate the bridge System bank will 

not exceed the amount which is reasonably 

necessary to save the cost of liquidating 1 or more 

System banks in default or danger of default; (2) 

chartering a bridge System bank is essential to 

continue providing adequate farm credit services in 

communities where such System bank(s) in default 

or danger of default provides such farm credit 

services; or (3) the continued operation of such 

System bank(s) in default or danger of default with 

respect to which the bridge System bank is 

chartered is in the best interest of the FCS or the 

public. 

7Section 5.61(h) of the Act lists all the aspects of 

bridge System banks from cradle to grave. See also 

footnote 7 of the proposed conservators and 

receivers’ rule at 87 FR 19398 (Apr. 4, 2022). 

8See 86 FR 15081 (Mar. 22, 2021). The rule 

became effective on May 13, 2021. See FR 27510 

(May 21, 2021). 

9See 87 FR 19397 (Apr. 4, 2022). 

10As explained in the preamble to the proposed 

rule, this is a logical change because (1) it follows 

the order of section 4.12 of the Act and (2) an 

institution in a conservatorship can be placed into 

receivership if its condition worsens. See 87 FR 

19399 (Apr. 4, 2022). 

11However, we made a few minor, nonsubstantive revisions to the text of specific 

regulatory provisions to improve their clarity, flow, 

and readability. We removed ‘‘that are’’ before 

‘‘identified in section 1.2 of the Act, and ‘‘it’’ before 

‘‘excludes bridge System banks’’ in § 619.9146 

because these words are superfluous and 

unnecessary. In § 627.3(a), we substituted ‘‘FCA’’ 

Continued 

appointment of FCSIC as the 

conservator or receiver of any System 

bank, association, service corporation, 

or the Funding Corporation. 

• Ensure our conservatorship and 

receivership regulations in part 627 are 

consistent with section 5412 of the 2018 

Farm Bill,1 which added section 5.61C 

to the Farm Credit Act of 1971, as 

amended (Act). 

• Restructure and reorganize part 627 

so it is easier for FCA examiners, FCS 

institutions and other interested parties 

to understand and use, and to make 

conforming or technical revisions to 

other FCA regulations. 

• Make conforming amendments to 

two definitions in part 619 to exempt 

bridge System banks, which are created 

pursuant to section 5.61C(h) of the Act, 

from FCA regulations and other laws 

that apply to healthy and ongoing FCS 

banks, associations, and service 

corporations. 

II. Background 

Section 4.12 of the Act governs the 

dissolution of Farm Credit institutions 

through voluntary and involuntary 

liquidation, mergers, and receiverships 

or conservatorships.2 Pursuant to 

section 4.12(b), FCA has the ‘‘exclusive 

power and jurisdiction’’ to appoint a 

conservator or receiver for any System 

institution 3 when any of six specific 

conditions exist that indicates an 

institution is insolvent or unviable.4

Over the last thirty years, FCA’s 

regulations in Part 627 regarding 

conservators, receivers, and voluntary 

liquidations have implemented the 

provisions in section 4.12 of the Act. 

The main reason for this rulemaking 

is the 2018 Farm Bill added a new 

section 5.61C to the Act, which 

strengthens, clarifies, and updates the 

powers and duties of FCSIC in its 

capacity as the appointed conservator or 

receiver of any FCS institution. Section 

5.61C enhances FCSIC’s authority to: (1) 

operate any FCS institution in 

conservatorship or receivership and 

perform all its functions; (2) handle all 

claims by various parties against such 

institution; and (3) enforce contracts on 

the institution’s behalf. This enhanced 

statutory conservatorship and 

receivership authority is comparable to 

the authority of the Federal Deposit 

Insurance Corporation (FDIC), National 

Credit Union Administration (NCUA), 

and Federal Housing Finance Agency 

(FHFA) regarding the institutions they 

oversee.5

The Farm Bill also introduced the 

concept of bridge System banks as a 

means for FCSIC to resolve or liquidate 

failing or failed System banks. Section 

5.61C(h) authorizes FCA to charter 

bridge System banks at FCSIC’s request 

for one or more distressed System banks 

and dissolve them once such failing or 

failed banks are resolved.6 The statutory 

provisions governing all aspects of 

bridge System banks from their creation 

to their termination and dissolution are 

comprehensive, clear, and prescriptive.7

This final rule completes our second 

rulemaking since 2021 to revise our 

regulations in part 627 to implement 

changes section 5412 of the 2018 Farm 

Bill made to the Act. In March 2021, we 

issued a direct final rule that rescinded 

ten regulations in Part 627 that the 2018 

Farm Bill superseded and rendered 

obsolete because they were no longer 

consistent with FCSIC’s new statutory 

authority over the priority of claims and 

other aspects relating to the 

administration and management of 

conservatorships and receiverships.8

In this most recent phase of this 

rulemaking, we published a proposed 

rule on April 4, 2022 9 that would 

update, restructure, and consolidate 

FCA regulations at part 627 governing 

the appointment and role of FCSIC as 

the conservator or receiver of an FCS 

institution, other than Farmer Mac. 

More specifically, we proposed 

combining the four remaining 

conservatorship regulations into a single 

regulation and consolidating the three 

receivership regulations we retained 

into a separate regulation. 

FCA also proposed to reverse the 

chronological order of the existing 

regulations by presenting the 

conservatorship regulation first and the 

receivership regulation second.10 FCA 

also proposed to simplify the numbering 

system for the regulations in part 627 

such that they will have no more than 

a two-digit number after the decimal 

point, which is consistent with the way 

FCA has numbered regulations in recent 

years. The proposed rule also: (1) 

reorganized the definitions in 

alphabetical order, (2) deleted 

references to the defunct Farm Credit 

System Financial Assistance 

Corporation, and (3) updated the 

reference to FCSIC in our 

conservatorship and receivership 

regulations to be consistent with all 

other FCA regulations. We also 

proposed conforming changes to other 

FCA regulations to be consistent with 

the changes made to part 627. 

In response to the proposed rule, we 

received one substantive comment from 

an individual who supported the 

proposed rule. 

III. Final Rule 

After careful consideration, FCA is 

finalizing the proposed rule without 

material change.11 We received no 


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for ‘‘it’’ immediately after the word ‘‘if.’’ This 

revision clarifies an ambiguity in the text of the 

proposed rule by clearly identifying FCA as the 

party that determines if one or more of the grounds 

in 627.3(b) exists for placing a System institution 

in conservatorship or receivership. We omitted the 

word ‘‘that’’ in three out of four places it appeared 

in §§ 627.10(c)(1) and (c)(2), and 627.20(d)(1) 

because this term is not needed to support the 

grammatical structure of these respective sentences. 

12See 87 FR 19397, supra at 19399. 

13Section 5411(39) of the 2018 Farm Bill repealed 

title VI of the Act. Subpart B of former title VI of 

the Act established the Farm Credit System 

Financial Assistance Corporation. See Public Law 

115–334, supra at 4683. 

14Section 5.61C(l) of the Act establishes a 

reciprocal requirement on FCSIC. According to 

section 5.61C(l)(2) of the Act, FCSIC ‘‘acting in the 

capacity of the Corporation as a conservator or 

receiver, shall consult with the [FCA] prior to 

taking any significant action impacting System 

institutions or service to System borrowers.’’ 

15 Id at 19399–400. 

comments that opposed the proposed 

rule or asked us to change it. As noted 

earlier, the purpose of this rulemaking 

is to update, clarify, restructure, and 

reorganize our conservators and 

receivers regulations to be consistent 

with changes the 2018 Farm Bill made 

to the Act. More specifically, the 2018 

Farm Bill realigned and clarified the 

roles of FCA and FCSIC pertaining to 

the conservatorship and receivership of 

failing and failed FCS institutions, and 

it gave FCSIC enhanced powers as the 

conservator or receiver of System 

institutions. Accordingly, we 

restructured and reorganized our 

regulations in part 627 to implement 

FCA’s specific statutory authorities 

governing conservatorships and 

receiverships while deferring to FCSIC 

as to how it will carry out its own 

authorities.12

The final rule also achieves FCA’s 

goal of making these regulations more 

user-friendly. Restructuring, 

consolidating, renumbering, eliminating 

redundancies, and simplifying the 

wording of these regulations improves 

their clarity and readability. As a result, 

FCA examiners, System institutions and 

borrowers, and other members of the 

public who may be affected by the 

conservatorship or receivership of an 

FCS institution will find it easier to 

understand, use, and rely on these 

regulations. 

We now discuss the specific 

provisions of the final rule and how 

they alter many of the regulations in 

part 627 that were previously in effect. 

This analytical discussion primarily 

focuses on substantive changes to these 

regulations. We have already explained 

minor, non-substantive regulatory 

revisions (such as a simplified 

numbering system, and stylistic 

wording changes) both above and in the 

preamble to the proposed rule and, 

therefore, we do not describe them in 

great detail here. 

We discuss the specific provisions of 

the final rule in the same chronological 

order they appear in the regulations in 

part 627. Conforming amendments to 

certain definitions in part 619 appear 

last in this analysis. 

A. Subpart A—General Provisions 

As before, subpart A continues to 

house the general regulatory provisions 

that apply to the other subparts of part 

627. The final rule retains the four 

regulations in subpart A but 

renumbered them for the reasons 

discussed above. 

1. Applicability—§ 627.1 

Final and redesignated § 627.1 states 

the ‘‘provisions in this part apply to 

conservatorships, receiverships, and 

voluntary liquidations of System 

institutions chartered under titles I, II, 

III, IV, and VII of the Act.’’ The only 

substantive difference between final 

§ 627.1 and its predecessor, former 

§ 627.2700, is the addition of specific 

references to other titles of the Act. This 

change clarifies that the regulations in 

part 627 do not apply to Farmer Mac. 

Instead, as noted earlier, the regulations 

in Subpart B of part 650 govern the 

conservatorship, receivership, or 

voluntary liquidation of Farmer Mac. 

2. Definitions—§ 627.2 

The definitions that apply to part 627 

are located in final and redesignated 

§ 627.2. Final § 627.2 lists the 

definitions alphabetically, without 

paragraph designations, which is 

consistent with FCA’s recent practice in 

rulemakings. The most significant 

changes in final and redesignated 

§ 627.2 are to the definition of ‘‘Farm 

Credit institution(s) or institution(s).’’ 

First, we removed the reference to the 

now-defunct Farm Credit System 

Financial Assistance Corporation from 

this definition.13 Second, we added a 

final sentence to the provision 

specifically stating these terms do not 

include bridge System banks chartered 

by FCA in accordance with section 

5.61C(h)(2) of the Act. 

3. Grounds for Appointing FCSIC as 

Conservator or Receiver 

Final and redesignated § 627.3 

specifies the grounds for FCA 

appointing FCSIC as conservator or 

receiver of a System institution 

pursuant to sections 4.12(b) and 5.61C(l) 

of the Act. Essentially, final § 627.3(a) 

allows FCA, in its discretion, to appoint 

FCSIC as the conservator or receiver of 

an FCS institution if FCA determines 

that one or more of the grounds in the 

§ 627.3(b) exist. As before, paragraph (b) 

of this regulation identifies six grounds 

for FCA to appoint FCSIC as the 

conservator or receiver of a System 

institution, which derive from section 

4.12(b) of the Act. The most substantive 

change we made to this regulation is an 

added sentence at the end of final and 

redesignated § 627.3(a) that implements 

new section 5.61C(l)(1) of the Act, 

which requires FCA, to the extent 

practicable, to consult with FCSIC 

before taking a pre-resolution action that 

could result in a conservatorship or 

receivership of a distressed FCS 

institution.14 As explained in detail in 

the preamble to the proposed rule, the 

other changes to this regulation are nonsubstantive, technical, grammatical, and 

stylistic revisions that improve its 

clarity and readability.15

4. Action for the Removal of the 

Conservator or Receiver—§ 627.4 

Final and redesignated § 627.4, which 

replaces former § 627.2715, allows an 

FCS institution placed into 

conservatorship or receivership to 

initiate an action for removal of the 

conservator or receiver. This regulation 

implements provisions in section 

4.12(b) of the Act that authorizes an FCS 

institution, within 30 days after FCA 

appoints FCSIC as its conservator or 

receiver, to bring an action in certain 

United States district courts to remove 

the conservator or receiver. Once an 

institution is placed in conservatorship 

or receivership, all powers, rights, and 

privileges of its board of directors, 

management, and employees transfer to 

FCSIC and the charter of an institution 

in receivership is cancelled. 

Final and redesignated § 627.4 creates 

an exception for an institution’s board 

of directors to meet after the 

appointment of a conservator or receiver 

and initiate an action for removal. 

Under this regulation, only an 

institution’s board of directors has the 

power to authorize an action to remove 

the conservator or receiver. 

The revisions to this regulation are 

non-substantive. We improved its 

clarity by rewriting it in the active 

voice, and by adding cross-references to 

this regulation in § 627.10 and § 627.20. 

B. Subpart B—Conservator and 

Conservatorships 

As revised, subpart B of part 627 

addresses FCA’s authority under section 

4.12(b) of the Act to appoint FCSIC as 

the conservator of distressed FCS 


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16First, we changed ‘‘district bank’’ to ‘‘funding 

bank.’’ Second, the provision about publishing the 

notice in the Federal Register became a separate 

sentence. Id. at 19400–401. 17 Id. at 19401. 

institutions. As discussed above, we 

relocated our conservatorship 

regulations from subpart C to subpart B 

and combined the four remaining 

regulations into a single conservatorship 

regulation. Yet, final § 627.10 is not 

substantively different from the four 

regulations it replaces because both the 

former and new regulations effectively 

carry out FCA’s statutory powers and 

responsibilities concerning the 

conservatorship of FCS institutions. 

The role of a conservator is to 

continue the ongoing operations of an 

institution while taking measures to 

preserve its assets and restore its 

financial viability so it can resume its 

normal business activities when it 

emerges from conservatorship. The 

purpose of a conservatorship is to 

resuscitate a trouble institution, not to 

liquidate it. In this context, our revised 

conservatorship regulation continues to 

implement FCA’s authority to: (1) 

appoint FCSIC as the conservator of a 

System institution; (2) transfer the dayto-day operations of the institution to 

FCSIC, in its capacity as the 

conservator, (3) examine the institution 

in conservatorship; (4) require audits 

and published financial reports for any 

FCS institution in conservatorship, and 

(5)terminate the conservatorship by 

either discharging FCSIC as conservator 

or by placing the institution into 

receivership. 

Final and redesignated § 627.10(a), 

which replaces former § 627.2775, 

governs FCA’s appointment of FCSIC as 

conservator of a failing FCS institution. 

According to new § 627.10(a)(1), the 

FCA Board may exercise its authority 

under 4.12(b) of the Act and § 627.3 to 

appoint FCSIC as conservator of an FCS 

institution once it finds one or more 

grounds identified in § 627.3(b) exist. 

This provision also authorizes the FCA 

Board to appoint FCSIC as the 

conservator of a System institution ex 

parte and without notice. The substance 

of final § 627.10(a)(1) is the same as its 

predecessor, § 627.2775(a). However, we 

changed the order and flow of this 

regulatory provision. As rewritten, the 

rule now requires us to first find legal 

grounds exist for appointing the 

conservator before we can do so ex parte 

and without notice. This revision makes 

the regulation more logical and easier to 

read and understand. 

Final and redesignated § 627.10(a)(2) 

requires the FCA Chairman, upon the 

appointment of the conservator, to 

immediately notify the affected 

institution and if it is an association, its 

funding bank. It also requires FCA to 

publish a notice in the Federal Register 

whenever it appoints FCSIC as the 

conservator of a System institution. The 

only substantive change to this 

provision is that we deleted the 

provision in former § 627.2775(b) that 

required FCSIC to notify all holders of 

the institution’s voting stock and 

participation certificates, by First-Class 

mail about the establishment of the 

conservatorship, and its effects on the: 

(1) institution’s operations, and (2) 

borrowers’ loans and equity holdings. 

As explained earlier, new section 5.61C 

of the Act strengthened FCSIC’s powers 

as the conservator of FCS institutions 

and, therefore, FCA regulations will not 

instruct FCSIC how to administer 

conservatorships unless a specific 

statutory provision explicitly requires 

us to do so. Notification to shareholders 

of System institutions about how a 

conservatorship will affect them is now 

within FCSIC’s jurisdiction. Final 

§ 627.10(a)(2) also incorporates two nonsubstantive, stylistic changes we 

proposed to update the language and 

improve the readability of this 

provision.16

Final and redesignated 

§ 627.10(b)addresses FCA’s role, 

responsibilities, powers, and 

prerogatives once it places an FCS 

institution into conservatorship. It 

incorporates various provisions in its 

predecessor regulations, §§ 627.2775 

and 627.2785. 

Final § 627.10(b)(1), which is a 

restatement of former § 627.2775(c), 

reaffirms that once the FCA Board 

issues an order placing an FCS 

institution into conservatorship, all 

rights, privileges, and powers of its 

members, board of directors, and 

employees are transferred to and vested 

exclusively in FCSIC as conservator. 

The FCA added a passage at the end of 

§ 627.10(b)(1) that states, ‘‘the board of 

directors of the institution retains 

authority to initiate an action in Federal 

court to remove the conservator 

pursuant to § 627.4.’’ This new passage 

adds a cross-reference to § 627.4, which 

replaces the more ambiguous 

‘‘notwithstanding’’ clause in former 

§ 627.2715. 

The next four paragraphs of final 

§ 627.10(b) derive from various 

provisions of former § 627.2785. It 

establishes requirements for the 

examination, auditing, and financial 

reporting of a System institution in 

conservatorship. Final § 627.10(b)(2), 

which restates the first sentence of 

former § 627.2785(b), affirms FCA’s 

authority to examine FCS institutions in 

conservatorship in accordance with 

section 5.19 of the Act. The second 

sentence of former § 627.2785(b), which 

requires a certified public accountant 

audit a System institution in 

conservatorship pursuant to part 621, 

now becomes a separate regulatory 

provision, and is redesignated as final 

§ 627.10(b)(3). Final §§ 627.10(b)(4) and 

(b)(5) govern financial reporting by a 

System institution in conservatorship to 

FCA and its shareholders, respectively. 

Former § 627.2785(c), which this 

rulemaking redesignates as 

§ 627.10(b)(4), requires each System 

institution in conservatorship to file 

financial reports required by part 621. 

More specifically § 621.14 requires each 

System institution to certify that: (1) its 

financial reports have been prepared in 

accordance with applicable regulations 

and instructions, and (2) its financial 

reports are a true and accurate 

representation of the institution’s 

financial condition and performance. 

Also, § 621.14 requires an officer of the 

institution to certify these financial 

reports. Since FCSIC replaces the 

management of a System institution in 

conservatorship, FCSIC is required by 

both the former and new regulation to 

certify the reports of financial condition 

the institution submits to FCA. 

Similarly, final § 627.10(b)(5), which 

replaces former § 627.2785(d), requires 

System institutions in conservatorship 

to prepare and publish financial reports 

for their shareholders in accordance 

with part 620. Under this regulation, 

FCSIC, as conservator, must sign and 

certify such disclosures to the 

institution’s shareholders. As explained 

in the preamble to the proposed rule, 

several stylistic revisions to 

redesignated §§ 627.10(b)(2) through 

(b)(5) shortened these four provisions, 

simplified their language, and improved 

their readability and clarity without 

altering their substantive meaning.17

The final rule repeals the provision in 

former § 627.2785(a) that required the 

conservator to: (1) take an inventory of 

the assets and liabilities of the 

institution from the date FCA placed it 

into conservatorship; and (2) file a copy 

of the inventory with FCA. Conducting 

an inventory of the assets and liabilities 

of an FCS institution in conservatorship 

falls within FCSIC’s new powers and 

duties under section 5.61C(b) of the Act. 

As explained in the proposed rule, FCA 

continues to have the right to obtain a 

copy of the inventory because a System 

institution in conservatorship is still 

chartered as an ongoing FCS institution, 

and it remains subject to FCA 

examination, supervision, and 

regulation. FCA has authority under the 


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18 In 1992, we added the provision to former 

§ 627.2720(e) that allowed us to cancel the charter 

at a later time in response to a comment from a 

System trade association. At that time, FCA opted 

for the flexibility to consider when to cancel an 

institution’s charter on a case-by-case basis, 

although the preamble to the former regulation 

expressed FCA’s expectation that it would 

ordinarily cancel the charter when it appointed 

FCSIC as the institution’s receiver. See 57 FR 46482 

(Oct. 9, 1992). 

2018 Farm Bill to receive a copy of the 

conservator’s inventory of the 

institution’s assets and liabilities. 

However, requiring FCSIC, by 

regulation, to conduct the inventory and 

share a copy of it with us is not 

necessary under the new legislation. 

Final and redesignated § 627.10(c) 

governs the termination of a 

conservatorship. A conservatorship 

ends in one of two ways. In the first 

situation, the conservatorship corrects 

and resolves the problems or conditions 

that led to the conservatorship of the 

institution, and FCA determines the 

institution is able to resume normal 

operations under new management. 

Alternatively, the institution’s 

conditions continue to deteriorate, and 

FCA decides to place it into 

receivership. In this situation, FCA will 

appoint FCSIC as the institution’s 

receiver, and FCSIC will determine the 

best course of action for liquidating and 

resolving the institution. 

These two scenarios are set forth in 

final § 627.10(c)(1) and § 627.10(c)(2), 

respectively. More specifically, the FCA 

Board may terminate the 

conservatorship under final 

§ 627.10(c)(1) by determining the 

institution is in a position to resume 

normal management. In this situation, 

our Board will instruct FCSIC to turn 

the institution’s operations over to new 

management FCA designates. Once new 

management is in place, FCA discharges 

FCSIC as conservator. In the alternative, 

the conservatorship will end when FCA 

places the institution in receivership 

and appoints FCSIC as receiver under 

§ 627.10(c)(2). Both provisions of final 

§ 627.10(c) are a restatement of the last 

two sentences of former § 627.2770(a). 

The final rule rescinds former 

§ 627.2790, which previously required 

FCSIC to submit a report to FCA on its 

conservatorship activities before its 

discharge as conservator of an 

institution. Filing a report with the FCA 

is not a statutory requirement for 

terminating a conservatorship. FCA and 

FCSIC will jointly determine what 

documentation is appropriate to share 

when conservatorship terminates. 

C. Subpart C—Receivers and 

Receiverships 

The final rule also consolidates the 

three remaining receivership 

regulations, former §§ 627.2720, 

627.2735, and 627.2765 into a single 

regulation, which we redesignated as 

§ 627.20. As noted above, we 

reorganized part 627 by transferring our 

receivership regulations from subpart B 

to subpart C, where it now follows our 

conservatorship regulations. To a large 

extent, final and redesignated § 627.20 

follows the same format and structure as 

the revised conservatorship regulation. 

Yet, a receivership is fundamentally 

different from a conservatorship because 

it liquidates and resolves a failing 

institution rather than correcting its 

problems. For this reason, there are 

some key distinctions between our 

conservatorship and receivership 

regulations. As a result, the changes to 

our receivership regulations are more 

extensive and substantive than those to 

our conservatorship regulations. 

Final § 627.20(a) addresses FCA’s 

appointment of FCSIC as the receiver of 

an FCS institution. More specifically, 

§ 627.20(a)(1) states the FCA Board 

‘‘may exercise its authority under 

section 4.12(b) of the Act and § 627.3 to 

appoint FCSIC as the receiver of an FCS 

institution upon finding that one or 

more of the grounds identified in 

§ 627.3(b) exist.’’ This regulatory 

provision also authorizes the FCA Board 

to appoint FCSIC as the receiver of any 

System institution ex parte and without 

notice. 

In this context, final § 627.20(a)(1) has 

the same substantive requirements as its 

predecessor, former § 627.2720(a). 

Additionally, § 627.20(a)(1) is virtually 

identical to the corresponding provision 

in the final conservatorship regulation, 

§ 627.10(a)(1). We made the same 

technical and stylistic changes to both 

provisions because the same reasoning 

applies to the appointment of both 

conservators and receivers. As 

explained above in the preamble 

discussion to the final conservatorship 

regulation, legal grounds must exist for 

FCA to appoint FCSIC as the 

conservator or receiver of an FCS 

institution before we can do so ex parte 

and without notice. 

Upon appointment of FCSIC as 

receiver, final § 627.20(a)(2) requires the 

FCA Chairman to immediately notify 

the affected institution and its funding 

bank if it is an association. It also 

requires FCA to publish a notice in the 

Federal Register whenever it appoints 

FCSIC as the receiver of a System 

institution. Again, the technical changes 

to final § 627.20(a)(2) mirror changes to 

the corresponding provision of the 

conservatorship regulation. The same 

explanation and rationale provided in 

this preamble explaining these changes 

to the conservatorship regulation apply 

to the receivership rule, as well. 

Final and redesignated § 627.20(b), 

which replaces former § 627.2720(d), 

continues to require the funding bank, 

in the event of the voluntary or 

involuntary liquidation of an affiliated 

association, to take appropriate 

measures to minimize the adverse effect 

of the liquidation on borrowers whose 

loans are purchased by, or otherwise 

transferred to another System 

institution. The only revisions to this 

provision are a few minor word 

changes. As explained earlier, our 

current rulemaking does not 

substantively amend our voluntary 

liquidation regulations in subpart D of 

part 627. For this reason, final 

§ 627.20(b) continues to apply to both 

voluntary liquidations and receiverships 

for the time being. 

Former § 627.2720(e), which the final 

rule redesignates as § 627.20(c), 

addresses how receivership changes the 

status of a failed System institution. 

Final § 627.20(c)(1) continues to state 

that once the FCA Board issues an order 

placing an FCS institution into 

receivership, ‘‘all rights, privileges, and 

powers of its members, board of 

directors, and employees are transferred 

to and vested exclusively in FCSIC as 

receiver.’’ We have added a new 

provision at the end of § 627.20(c)(1) 

that carves out an exception that enables 

the institution’s board to initiate an 

action in Federal court to remove the 

receiver pursuant to § 627.4. We have 

already explained the reasons for these 

changes twice above. 

Final and redesignated § 627.20(c)(2) 

revises the last sentence of former 

§ 627.2729(e). This provision governs 

the cancelation of a System institution’s 

charter when FCA appoints FCSIC as its 

receiver. Under the former rule, FCA 

could cancel a System institution’s 

charter either when it appoints FCSIC as 

receiver, or at any time thereafter.18 In 

contrast to former § 627.2720(e), final 

§ 627.20(c)(2) requires cancelation of the 

charter when FCSIC is appointed as the 

receiver of a System institution. 

Canceling the charter means an 

institution is out of business and 

undergoing liquidation and resolution. 

A ‘live’ corporate charter is inconsistent 

with FCSIC’s rights, powers, and duties 

as receiver under section 5.61C of the 

Act, as added by Congress in 2018. As 

long as the charter remains in effect, the 

institution is not defunct as a matter of 

law, and FCSIC’s authority and ability 

to resolve the estate by disposing of its 

assets and liabilities can more easily be 

challenged by creditors, shareholdermembers, and other parties, contrary to 

Congressional intent to provide for an 


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19Federal statutes comparable to section 4.12(b) 

of the Act permit commercial banks, credit unions, 

and Federal Home Loan Banks to challenge in 

Federal court, decisions by the three Federal 

banking regulatory agencies, the NCUA, and FHFA 

to appoint receivers and seek their removal. These 

agencies cancel the charters of institutions they 

supervise at the time they place them into 

receivership to ensure an orderly liquidation and 

resolution. 

20Section 4.37 of the Act requires money of a 

borrower held in an uninsured voluntary or 

involuntary account at a System institution must be 

immediately applied as payment against the 

borrower’s outstanding loans if the institution is 

placed in liquidation. This statutory provision also 

requires FCA to enact regulations that: (1) define 

the term ‘‘uninsured voluntary or involuntary 

account’’; and (2) effectively carry out section 4.37 

of the Act. 

21Section 4.37 of the Act requires FCA to enact 

regulations about how uninsured voluntary and 

involuntary accounts at System institutions are to 

be resolved by FCSIC. For this reason, final 

§ 627.20(d) specifies how FCSIC will address the 

resolution of these specific liabilities of a System 

institution in receivership. 

22See supra note 6. See also 87 FR supra at 

19398, footnote 6. 

23See supra note 7. Detailed information 

concerning bridge System banks for cradle to grave 

is in available in the preamble to the proposed rule. 

Id. at footnote 7. 

orderly liquidation process comparable 

to that of other federally chartered 

financial institutions.19

Final and redesignated § 627.20(d) 

implements section 4.37 of the Act, 

which addresses the treatment of 

uninsured voluntary and involuntary 

accounts of a System institution in 

receivership.20 This regulation provides 

that once the FCA Board has placed a 

System institution into receivership, 

FCSIC, in accordance with section 4.37 

of the Act, will, as soon as practicable, 

notify every borrower who holds an 

uninsured voluntary or involuntary 

account, as described in § 624.4175, at 

such institution that: (1) such accounts 

ceased earning interest from the date the 

receivership commenced; and (2) 

FCSIC, as receiver, will immediately 

apply the funds in a borrower’s 

account(s) as payment against the 

outstanding balance of the borrower’s 

loan(s). The final rule rescinds a 

provision in the former regulation, 

§ 627.2735(e), that allowed a borrower, 

within 15 days of receiving this notice, 

to direct FCSIC to apply the funds in the 

account for some other purpose 

specified in the loan documents. We are 

repealing this provision because these 

accounts are uninsured and unsecured, 

and section 4.37 of the Act explicitly 

states these funds must be applied to 

reduce the outstanding balance of the 

borrower’s loans.21 All other changes to 

this regulation are not substantive, and 

they are designed to improve its 

readability and clarity. 

The final rule also rescinds former 

§ 627.2735(b), which requires FCSIC to 

provide notice to stockholders of an FCS 

institution in receivership regarding the 

value they will receive for their stock 

upon its liquidations. No regulation is 

needed to implement statutory 

provisions that protect borrower stock at 

System institutions in liquidation. 

Section 4.9A(c) of the Act, which 

requires FCSIC to retire borrower stock 

at par at a System institution in 

receivership, provides clear and 

unambiguous guidance to FCSIC. 

Finally, redesignated § 627.20(e) 

amends and restates former § 627.2765, 

which governs the final discharge and 

release of the receiver. According to this 

regulation, the receivership terminates 

once FCSIC makes a final distribution of 

the liquidated institution’s assets. At 

that time, final § 627.20(e) specifies the 

FCA Board will completely and finally 

release and discharge the receiver. This 

rulemaking repealed a provision in 

former § 627.2765 that required our 

Board to cancel the institution’s charter 

at this time if it had not done so 

previously. We rescinded this provision 

because, as discussed earlier, 

§ 627.20(c)(2) requires FCA to cancel the 

charter when the FCA Board places the 

institution in receivership. 

D. Conforming Amendments 

The final rule makes conforming 

amendments to other regulations in 

parts 619 and 627. 

1. Definitions in Part 619 

Our regulations in part 619 define 

terms that apply to all regulations 

unless a provision in a part, subpart, or 

section specifically states a different 

definition applies. This final rule 

amends the definition of ‘‘Farm Credit 

bank’’ in § 619.9240 and ‘‘Farm Credit 

institutions’’ in § 619.9146, so both 

terms explicitly exclude bridge System 

banks FCA charters at FCSIC’s request 

under section 5.61C(h)(2) of the Act. 

Bridge System banks are vehicles to 

resolve System institutions in 

liquidation. These conforming 

amendments to §§ 619.9140 and 

619.9146 exempt bridge System banks 

from FCA regulations that govern the 

activities and operations of healthy, 

ongoing FCS institutions. Thus, FCA 

regulations governing the organization 

and governance, capitalization, funding, 

and other activities of other System 

institutions would not apply to bridge 

System banks unless we enact a 

regulation that states otherwise. 

Additionally, we deleted the reference 

to the Funding Corporation from the 

definition of ‘‘Farm Credit institution’’ 

in § 619.9146. The reason for this 

revision is section 5411(2) of the 2018 

Farm Bill amended section 1.2(a)of the 

Act to expressly identify the Funding 

Corporation as a System institution. As 

a result, referencing the Funding 

Corporation in this regulation is now 

duplicative and unnecessary. 

2. Voluntary Liquidation Regulation in 

Subpart D of Part 627 

As noted earlier, FCA is not revising 

its voluntary liquidation regulations in 

Subpart D at this time. However, the 

final rule made non-substantive 

conforming changes we proposed to 

ensure these regulations in subpart D 

are consistent with amendments to the 

conservatorship and receivership 

regulations in part 627. First, we 

redesignated the two regulations in 

subpart D, §§ 627.2795 and 627.2797 as 

§§ 627.40 and 627.41 respectively, so 

they conform to the numbering changes 

we made to subparts A, B, and C of part 

627. Second, we changed the reference 

to ‘‘subpart B’’ in redesignated 

§ 627.40(a) to subpart C because, as 

discussed above, the final rule relocates 

our new receivership regulation to 

subpart C. Finally, we deleted the 

passage at the end of the final sentence 

in former § 627.2797(a), which states, 

‘‘except that if the Farm Credit 

institution is placed in receivership, the 

provisions of § 627.2730 shall govern 

further disposition of the equities of the 

Farm Credit institution.’’ We deleted 

this passage because the direct final rule 

we enacted in 2021 repealed § 627.2730. 

IV. Bridge System Banks and Voluntary 

Liquidations 

A. Bridge System Banks 

Bridge System banks are one of the 

new tools the 2018 Farm Bill gave 

FCSIC, in its capacity as receiver, for 

resolving or liquidating failing or failed 

System banks. Section 5.61C(h) of the 

Act authorizes FCA to charter bridge 

System banks at FCSIC’s request and 

dissolve them once a failing or failed 

Farm Credit bank is resolved.22

The statutory provisions governing 

the creation, operation, capitalization, 

and termination and dissolution of 

bridge System banks are comprehensive, 

unambiguous, and prescriptive.23 For 

that reason, new regulations are not 

necessary to implement FCA’s statutory 

authority pertaining to bridge System 

banks. To date, FCA has not proposed 

regulations for bridge System banks and 

instead will rely on its chartering and 

supervisory powers, as well as 

coordination with FCSIC, to fulfill 

FCA’s responsibilities and obligations 

under section 5.61C(h) of the Act. We 

note section 5.61C(h) grants FCSIC 

authority to organize, control, manage, 

and operate bridge System banks. Other 


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24 Id. at 10398. 

25See 63 FR 5726 (Feb. 4, 1998). 

Federal regulators of financial 

institutions, including the Comptroller 

of the Currency, the NCUA, and the 

FHFA, have not enacted regulations to 

implement similar statutory provisions. 

Section 5.61C(h) of the Act also 

establishes the statutory framework for 

creating a healthy and viable successor 

bank to a bridge System bank once the 

receivership ends.24 However, replacing 

the bridge System bank with successor 

FCS banks raises novel issues of first 

impression for both FCA and FCSIC. As 

noted in the preamble to the proposed 

rule, both agencies are exploring and 

consulting about this issue. FCA may 

propose new regulations in the future to 

implement section 5.61C(h)(9) and 

(h)(10) concerning the processes and 

procedures for replacing a bridge 

System bank with a solvent, and viable 

Farm Credit bank. 

B. Voluntary Liquidations 

As discussed above, the FCA has not 

substantively amended its regulations in 

subpart D of part 627 governing the 

voluntary liquidation of System 

institutions other than Farmer Mac. 

These regulations have been in effect 

since 1998, and FCA is reviewing them 

to determine whether revisions are 

needed.25

IV. Regulatory Analysis 

A. Regulatory Flexibility Act and Major 

Rule Conclusion 

Pursuant to section 605(b) of the 

Regulatory Flexibility Act (5 U.S.C. 601 

et seq.), FCA hereby certifies the final 

rule will not have a significant 

economic impact on a substantial 

number of small entities. Each of the 

banks in the Farm Credit 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, Farm Credit System 

institutions are not ‘‘small entities’’ as 

defined in the Regulatory Flexibility 

Act. 

B. Congressional Review Act 

[To be determined.] 

List of Subjects 

12 CFR Part 619 

Agriculture, Banks, Banking, and 

Rural areas. 

12 CFR Part 627 

Agriculture, Banks, Banking, Claims, 

Rural areas. 

For the reasons stated in the 

preamble, parts 619 and 627 of chapter 

VI, title 12 of the Code of Federal 

Regulations are amended as follows: 

PART 619—DEFINITIONS 

■ 1. The authority citation for part 619 

is revised to read as follows: 

Authority: Secs. 1.4, 1.5, 1.7, 2.1, 2.2, 2.4, 

2.11, 2.12, 3.1, 3.2, 4.9, 5.9, 5.17, 5.19, 5.61C, 

7.0, 7.1, 7.6, 7.8 and 7.12 of the Farm Credit 

Act (12 U.S.C. 2012, 2013, 2015, 2072, 2073, 

2075, 2092, 2093, 2122, 2123, 2160, 2243, 

2252, 2254, 2279a, 2279a–1, 2279b, 2279c–1, 

2279f); sec 514 of Pub. L. 102–552. 106 Stat. 

4102. 

■ 2. Revise § 619.9140 to read as 

follows: 

§ 619.9140 Farm Credit bank(s). 

Except as otherwise defined, the term 

Farm Credit bank(s) includes Farm 

Credit Banks, agricultural credit banks, 

and banks for cooperatives, but excludes 

bridge System banks chartered by the 

Farm Credit Administration Board 

pursuant to section 5.61C(h)(2) of the 

Act. 

■ 3. Revise § 619.9146 to read as 

follows: 

§ 619.9146 Farm Credit institutions. 

Except as otherwise defined, the term 

Farm Credit institutions refers to all 

institutions identified in section 1.2 of 

the Act and are chartered and regulated 

by the Farm Credit Administration but 

excludes bridge System banks chartered 

by the Farm Credit Administration 

Board pursuant to section 5.61C(h)(2) of 

the Act. 

PART 627—TITLE IV CONSERVATORS, 

RECEIVERS, BRIDGE SYSTEM 

BANKS, AND VOLUNTARY 

LIQUIDATIONS 

■ 4. The authority citation for part 627 

is revised to read as follows: 

Authority: Secs. 4.2, 5.9, 5.10, 5.17, 5.51, 

5.58, 5.61, 5.61C of the Farm Credit Act (12 

U.S.C. 2183, 2243, 2244, 2252, 2277a, 2277a– 

7. 

■ 5. The heading for part 627 is revised 

to read as set forth above. 2277a–10, 

2277a–10c.). 

■ 6. Subparts A, B, and C are revised to 

read as follows: 

Subpart A—General Provisions 

Sec. 

627.1 Applicability. 

627.2 Definitions. 

627.3 Grounds for appointing a conservator 

or receiver. 

627.4 Action for removal of a conservator or 

receiver. 

Subpart B—Conservator and 

Conservatorships 

627.10 FCSIC as conservator. 

Subpart C—Receiver and Receiverships 

627.20 FCSIC as receiver. 

Subpart A—General Provisions 

§ 627.1 Applicability. 

The provisions of this part apply to 

conservatorships, receiverships, and 

voluntary liquidations of System 

institutions chartered under titles I, II, 

III, IV, and VII of the Act. 

§ 627.2 Definitions. 

For the purposes of this part, the 

following definitions apply: 

Act means the Farm Credit Act of 

1971, as amended. 

Conservator means the Farm Credit 

System Insurance Corporation acting in 

its capacity as the conservator of a Farm 

Credit institution. 

Farm Credit institution(s) or 

institution(s) means all Farm Credit 

banks, associations, service corporations 

chartered under title IV of the Act, and 

the Federal Farm Credit Banks Funding 

Corporation. These two terms do not 

include any bridge System bank 

chartered by FCA, in accordance with 

section 5.61C(h)(2) of the Act. 

FCSIC means the Farm Credit System 

Insurance Corporation. 

Receiver means FCSIC acting in its 

capacity as the receiver of a Farm Credit 

institution. 

§ 627.3 Grounds for appointing FCSIC as 

conservator or receiver. 

(a) FCA may, in its discretion, appoint 

a conservator or receiver of a Farm 

Credit institution if FCA determines that 

one or more of the grounds in paragraph 

(b) of this section exists. FCA must 

appoint FCSIC as conservator or 

receiver of a Farm Credit institution. To 

the extent practicable, FCA will consult 

with FCSIC before taking a preresolution action that may result in a 

conservatorship or receivership of a 

Farm Credit institution. 

(b) The grounds for appointing FCSIC 

as a conservator or receiver of a System 

institution are: 

(1) The institution is insolvent 

because the value of its assets is less 

than its obligations to creditors and 

others, including its members. For the 

purpose of determining insolvency, 

‘‘obligations to members’’ does not 

include stock or allocated equites held 

by current or former borrowers. 

(2) There has been a substantial 

dissipation of assets or earnings of the 

institution due to the violation of any 

law, rule, or regulation, or one or more 

unsafe or unsound practice(s). 


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(3) The institution is in an unsafe or 

unsound condition to transact business, 

including having insufficient capital 

levels or otherwise. For the purpose of 

this part, ‘‘unsafe or unsound 

condition’’ includes, but is not limited 

to, the following conditions: 

(i) For associations, a default by the 

association of one or more terms of its 

general financing agreement with its 

funding bank that the Farm Credit 

Administration determines to be a 

material default; 

(ii) For all institutions, permanent 

capital of less than one-half the 

minimum required level for the 

institution; or 

(iii) For associations, stock 

impairment. 

(4) The institution has committed a 

willful violation of a final cease and 

desist order issued by the Farm Credit 

Administration Board. 

(5) The institution is concealing its 

books, papers, records, or assets, or is 

refusing to submit its books, papers, 

records, assets, or other material relating 

to the affairs of the institution for 

inspection to any examiner or to any 

lawful agent of the Farm Credit 

Administration Board. 

(6) A Farm Credit bank is unable to 

make a timely payment of principal or 

interest on any insured obligation(s) 

defined in section 5.51(3) of the Act 

issued by the bank individually, or on 

which it is primarily liable. 

§ 627.4 Action for the removal of the 

conservator or receiver. 

Within 30 days after the Farm Credit 

Administration Board appoints FCSIC 

as the conservator or receiver of a Farm 

Credit institution, pursuant to § 627.3, 

the institution may bring an action in 

the United States District Court for the 

judicial district in which its home office 

is located, or the United States District 

Court for the District of Columbia, for an 

order requiring the Farm Credit 

Administration Board to remove such 

conservator or receiver and, if the 

charter has been canceled, to rescind the 

cancellation of the charter. The 

institution’s board of directors is 

empowered to meet subsequent to the 

appointment of a conservator or receiver 

and authorize the filing of an action in 

Federal court to remove the conservator 

or receiver. Only the institution’s board 

of directors has the power to authorize 

an action to remove the conservator or 

receiver. 

Subpart B—Conservator and 

Conservatorships 

§ 627.10 FCSIC as Conservator. 

(a) Appointment. (1) The Farm Credit 

Administration Board may exercise its 

authority under section 4.12(b) of the 

Act and § 627.3 to appoint FCSIC as the 

conservator of a Farm Credit institution 

upon finding that one or more of the 

grounds identified in § 627.3(b) exists. 

The Farm Credit Administration Board 

may appoint, ex parte and without 

notice, FCSIC as conservator for any 

Farm Credit institution. 

(2) Upon appointing FCSIC as the 

conservator of an institution, the 

Chairman of the Farm Credit 

Administration shall immediately notify 

such institution and, in the case of an 

association, its funding bank. The Farm 

Credit Administration will immediately 

publish notice of the appointment of the 

conservator in the Federal Register. 

(b) Conservatorship. (1) Once the 

Farm Credit Administration Board 

issues the order placing a Farm Credit 

institution in conservatorship, all rights, 

privileges, and powers of its members, 

board of directors, officers, and 

employees, are transferred to and vested 

exclusively in FCSIC as conservator, 

except that the board of directors of the 

institution retains authority to initiate 

an action in a Federal district court to 

remove the conservator pursuant to 

§ 627.4. 

(2) The Farm Credit Administration 

will continue to examine Farm Credit 

institutions in conservatorship in 

accordance with section 5.19 of the Act. 

(3) A qualified public accountant 

must audit a Farm Credit institution in 

conservatorship in accordance with part 

621 of this chapter. 

(4) Pursuant to the requirements of 

part 621 of this chapter, each institution 

in conservatorship must prepare and file 

with the Farm Credit Administration 

financial reports, certified by FCSIC, as 

required by § 621.14. 

(5) Each institution in conservatorship 

must prepare and issue published 

financial reports in accordance with the 

requirements of part 620 of this chapter. 

FCSIC, as the conservator of the 

institution, will provide the signatures 

and certifications required by § 620.3. 

(c) Termination of the 

conservatorship. (1) Whenever the Farm 

Credit Administration Board determines 

the problem(s) or condition(s) that led to 

the conservatorship have been corrected 

and resolved, and the institution is in a 

position to resume normal operations, it 

may terminate the conservatorship and 

direct FCSIC to turn over the 

institution’s operations to such 

management that FCA designates. Once 

new management is in place, the 

conservatorship terminates and FCA 

discharges FCSIC as conservator; or 

(2) Whenever the Farm Credit 

Administration Board determines the 

institution should be placed in 

receivership, the Farm Credit 

Administration Board will appoint 

FCSIC as the receiver of such 

institution. 

Subpart C—Receiver and 

Receiverships 

§ 627.20 FCSIC as receiver. 

(a) Appointment. (1) The Farm Credit 

Administration Board may exercise its 

authority under section 4.12(b) of the 

Act and § 627.3 to appoint FCSIC as the 

receiver of a Farm Credit institution 

upon finding that one or more of the 

grounds identified in § 627.3(b) exists. 

The Farm Credit Administration Board 

may appoint, ex parte and without 

notice, FCSIC as receiver for any Farm 

Credit institution. 

(2) Upon appointing FCSIC as the 

receiver of an institution, the Chairman 

of the Farm Credit Administration shall 

immediately notify such institution and, 

in the case of an association, its funding 

bank. The Farm Credit Administration 

will immediately publish notice of the 

appointment of the receiver in the 

Federal Register. 

(b) Funding bank role for association 

in liquidation. In the event of the 

voluntary or involuntary liquidation of 

an association, the funding bank must 

institute appropriate measures to 

minimize the adverse effect of the 

liquidation on those borrowers whose 

loans are purchased by, or otherwise 

transferred to another System 

institution. 

(c) Receivership. (1) Once the Farm 

Credit Administration Board issues the 

order placing a Farm Credit institution 

in receivership, all rights, privileges, 

and powers of its members, the board of 

directors, officers, and employees, are 

transferred to and vested exclusively in 

FCSIC as receiver, except that the 

institution’s board of directors retains 

authority to initiate an action in a 

Federal district court to remove the 

receiver pursuant to § 627.4. 

(2) The Farm Credit Administration 

Board simultaneously will cancel the 

charter of the institution when it 

appoints FCSIC as receiver. 

(d) Uninsured accounts. Once the 

Farm Credit Administration Board has 

placed an institution into receivership, 

FCSIC, in accordance with section 4.37 

of the Act will, as soon as practicable, 

notify every borrower who holds an 

uninsured voluntary or involuntary 

account, as described in § 614.4175 of 

this subchapter, at the institution that: 

(1) Such accounts ceased earning 

interest from the date the Farm Credit 

Administration Board placed the 

institution into receivership; and 


ddrumheller on DSK120RN23PROD with RULES1
82246 Federal Register / Vol. 88, No. 225 / Friday, November 24, 2023 / Rules and Regulations 

(2) FCSIC, as receiver, will 

immediately apply the funds in a 

borrower’s uninsured account(s) as 

payment against the outstanding 

balance of the borrower’s loan(s). 

(e) Final discharge and release of the 

receiver. The receivership terminates 

after FCSIC makes a final distribution of 

the assets of the liquidated institution. 

Then, the Farm Credit Administration 

Board will completely and finally 

release and discharge the receiver. 

Subpart D—Voluntary Liquidation 

§ 627.2795 [Redesignated as § 627.40] 

■ 7. Redesignate § 627.2795 as § 627.40. 

§ 627.40 [Amended] 

■ 8. In newly redesignated § 627.40, in 

paragraph (a), remove ‘‘subpart B’’ and 

add ‘‘subpart C’’ in its place. 

§ 627.2797 [Redesignated as § 627.41] 

■ 9. Redesignate § 627.2797 as § 627.41. 

■ 10. In newly redesignated § 627.41, 

revise the last sentence in paragraph (a) 

to read as follows: 

§ 627.41 Preservation of equity. 

(a) * * * In the event the resolution 

to liquidate is approved by the 

stockholders of the Farm Credit 

institution and the liquidation plan is 

approved by the Farm Credit 

Administration Board, the liquidation 

plan shall govern disposition of the 

equities of the Farm Credit institution. 

* * * * * 

Dated: November 15, 2023. 

Ashley Waldron, 

Secretary, Farm Credit Administration Board. 

[FR Doc. 2023–25652 Filed 11–22–23; 8:45 am] 

BILLING CODE 6705–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2023–1722; Project 

Identifier MCAI–2023–00493–T; Amendment 

39–22597; AD 2023–22–13] 

RIN 2120–AA64 

Airworthiness Directives; Dassault 

Aviation Airplanes 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule. 

SUMMARY: The FAA is superseding 

Airworthiness Directive (AD) 2023–04– 

15, which applied to certain Dassault 

Aviation Model FALCON 7X airplanes. 

AD 2023–04–15 required revising the 

existing maintenance or inspection 

program, as applicable, to incorporate 

new or more restrictive airworthiness 

limitations. This AD was prompted by 

a determination that new or more 

restrictive airworthiness limitations are 

necessary. This AD continues to require 

the actions in AD 2023–04–15 and 

requires revising the existing 

maintenance or inspection program, as 

applicable, to incorporate new or more 

restrictive airworthiness limitations, as 

specified in a European Union Aviation 

Safety Agency (EASA) AD, which is 

incorporated by reference. The FAA is 

issuing this AD to address the unsafe 

condition on these products. 

DATES: This AD is effective December 

29, 2023. 

The Director of the Federal Register 

approved the incorporation by reference 

of a certain publication listed in this AD 

as of December 29, 2023. 

The Director of the Federal Register 

approved the incorporation by reference 

of a certain other publication listed in 

this AD as of May 10, 2023 (88 FR 

20062, April 5, 2023). 

ADDRESSES: 

AD Docket: You may examine the AD 

docket at regulations.gov under Docket 

No. FAA–2023–1722; or in person at 

Docket Operations between 9 a.m. and 

5 p.m., Monday through Friday, except 

Federal holidays. The AD docket 

contains this final rule, the mandatory 

continuing airworthiness information 

(MCAI), any comments received, and 

other information. The address for 

Docket Operations is U.S. Department of 

Transportation, Docket Operations, M– 

30, West Building Ground Floor, Room 

W12–140, 1200 New Jersey Avenue SE, 

Washington, DC 20590. 

Material Incorporated by Reference: 

• For material incorporated by 

reference in this AD, contact EASA, 

Konrad-Adenauer-Ufer 3, 50668 

Cologne, Germany; telephone +49 221 

8999 000; email ADs@easa.europa.eu; 

website easa.europa.eu. You may find 

this material on the EASA website at 

ad.easa.europa.eu. 

• You may view this material at the 

FAA, Airworthiness Products Section, 

Operational Safety Branch, 2200 South 

216th St., Des Moines, WA. For 

information on the availability of this 

material at the FAA, call 206–231–3195. 

It is also available in the AD docket at 

regulations.gov under Docket No. FAA– 

2023–1722. 

FOR FURTHER INFORMATION CONTACT: Tom 

Rodriguez, Aviation Safety Engineer, 

FAA, 1600 Stewart Avenue, Suite 410, 

Westbury, NY 11590; telephone: 206– 

231–3226; email: tom.rodriguez@

faa.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

The FAA issued a notice of proposed 

rulemaking (NPRM) to amend 14 CFR 

part 39 to supersede AD 2023–04–15, 

Amendment 39–22362 (88 FR 20062, 

April 5, 2023) (AD 2023–04–15). AD 

2023–04–15 applied to certain Dassault 

Aviation Model FALCON 7X airplanes. 

AD 2023–04–15 required revising the 

existing maintenance or inspection 

program, as applicable, to incorporate 

new or more restrictive airworthiness 

limitations. The FAA issued AD 2023– 

04–15 to address reduced structural 

integrity and reduced control of the 

airplane due to the failure of system 

components. AD 2023–04–15 specified 

that accomplishing the revision required 

by that AD terminates the requirements 

of paragraph (q) of AD 2014–16–23, 

Amendment 39–17947 (79 FR 52545, 

September 4, 2014) (AD 2014–16–23). 

This AD therefore continues to allow 

that terminating action. 

The NPRM published in the Federal 

Register on August 29, 2023 (88 FR 

59473). The NPRM was prompted by 

AD 2023–0063, dated March 20, 2023, 

issued by EASA, which is the Technical 

Agent for the Member States of the 

European Union (EASA AD 2023–0063) 

(also referred to as the MCAI). The 

MCAI states that new or more restrictive 

airworthiness limitations have been 

developed. 

In the NPRM, the FAA proposed to 

continue to require the actions in AD 

2023–04–15 and to require revising the 

existing maintenance or inspection 

program, as applicable, to incorporate 

new or more restrictive airworthiness 

limitations, as specified in EASA AD 

2023–0063. The FAA is issuing this AD 

to address reduced structural integrity 

and reduced control of the airplane due 

to the failure of system components. 

You may examine the MCAI in the 

AD docket at regulations.gov under 

Docket No. FAA–2023–1722. 

Discussion of Final Airworthiness 

Directive 

Comments 

The FAA received no comments on 

the NPRM or on the determination of 

the cost to the public. 

Conclusion 

This product has been approved by 

the aviation authority of another 

country and is approved for operation in 

the United States. Pursuant to the FAA’s 

bilateral agreement with this State of 

Design Authority, it has notified the 

FAA of the unsafe condition described 

in the MCAI referenced above. The FAA 

reviewed the relevant data and 


ddrumheller on DSK120RN23PROD with RULES1