66816 Federal Register / Vol. 62, No. 245 / Monday, December 22, 1997 / Rules and Regulations

initial request, and should state all facts

supporting the need to obtain the

requested records rapidly. The requester

must also state that these facts are true

and correct to the best of the requester’s

knowledge and belief.

(3) When a request for expedited

processing is received, the Board will

respond within ten calendar days from

the date of receipt of the request, stating

whether or not the request has been

granted. If the request for expedited

processing is denied, any appeal of that

decision will be acted upon

expeditiously.

4. Section 1703.107(b)(2)(iv) is

removed and reserved.

5. Section 1703.108(b) is revised to

read as follows:

§ 1703.108 Processing of FOIA requests.

* * * * *

(b) Action pursuant to this section to

provide access to requested records

shall be taken within twenty working

days. This time period may be extended

up to ten additional working days, in

unusual circumstances, by written

notice to the requester. If the Board will

be unable to satisfy the request in this

additional period of time, the requester

will be so notified and given the

opportunity to—

(1) Limit the scope of the request so

that it can be processed within the time

limit, or

(2) Arrange with the Designated FOIA

Officer an alternative time frame for

processing the original request or a

modified request.

* * * * *

Dated: December 15, 1997.

John T. Conway,

Chairman.

[FR Doc. 97–33298 Filed 12–19–97; 8:45 am]

BILLING CODE 3670–01–M

FARM CREDIT ADMINISTRATION

12 CFR Part 614

RIN 3052–AB81

Loan Policies and Operations; Interest

Rates and Charges

AGENCY: Farm Credit Administration.

ACTION: Direct final rule with

opportunity for comment.

SUMMARY: The Farm Credit

Administration (FCA), through the FCA

Board (Board), issues a direct final rule

amending its regulations concerning

interest rates and charges. This action is

consistent with the FCA’s continuing

efforts to reduce regulatory burden and

unnecessary prior approval

requirements whenever possible. The

amendments eliminate the prior

approval requirement for changes in

interest rate policies at banks for

cooperatives (BCs), eliminate

unnecessary or duplicative regulatory

requirements, clarify existing

requirements that are retained.

The effect of the amendments is to

enable BCs to revise rate policies for

discounting negotiable paper without

prior FCA approval, to eliminate the

requirement that fees charged by an

association are subject to bank approval,

and to clarify that, in all Farm Credit

System (FCS or System) banks and

direct lender institutions, the board of

directors is responsible for setting

interest rates and annually reviewing

interest rate plans in conjunction with

the review and approval of the

institution’s annual business plan.

DATES: If no significant adverse

comment is received on or before

January 21, 1998, these regulations shall

be effective upon the expiration of 30

days after publication in the Federal

Register during which either or both

Houses of Congress are in session.

Notice of the effective date will be

published in the Federal Register. If

significant adverse comment is received,

the FCA will publish a notice of

withdrawal of the regulations and

indicate how the Agency expects to

proceed with further rulemaking.

ADDRESSES: Comments may be

submitted via electronic mail to ‘‘regcomm@fca.gov’’ or facsimile

transmission to (703) 734–5784.

Comments also may be mailed or

delivered to Patricia W. DiMuzio,

Director, Regulation Development

Division, Office of Policy Development

and Risk Control, Farm Credit

Administration, 1501 Farm Credit Drive,

McLean, Virginia 22102–5090. Copies of

all communications received will be

available for review by interested parties

in the Office of Policy Development and

Risk Control, Farm Credit

Administration.

FOR FURTHER INFORMATION CONTACT:

Linda C. Sherman, Policy Analyst,

Regulation Development Division,

Office of Policy Development and Risk

Control, (703) 883–4498, TDD (703)

883–4444; or Rebecca S. Orlich, Senior

Attorney, Regulatory Enforcement

Division, Office of General Counsel,

(703) 883–4020, TDD (703) 883–4444.

SUPPLEMENTARY INFORMATION:

I. Background

The regulations in 12 CFR part 614—

subpart G pertain to interest rates and

charges by FCS institutions. Most of the

regulations in subpart G were originally

promulgated by the FCA in 1972

following Congress’ modernization and

consolidation of existing farm credit law

in the Farm Credit Act of 1971. The

structure of the System has changed

considerably in the past 25 years, and

the regulatory relationship between FCS

institutions and the FCA has become an

arm’s-length relationship. The

amendments set forth below reflect

those changes, as well as the FCA’s

current regulatory philosophy of

removing prior approval requirements

not mandated by the current Farm

Credit Act of 1971, as amended (Act),

and unnecessary to the safe and sound

operation of an institution. The FCA

will continue to hold FCS institution

boards and management accountable for

their internal operations through the

examination process. Likewise,

regulatory language that merely restates

statutory provisions is eliminated.

Five sections in 12 CFR part 614—

subpart G are eliminated, and the two

remaining sections are renumbered and

moved to 12 CFR part 614—subpart D.

Because the changes conform existing

regulations to the statute and make only

minor changes to the regulatory

language, the FCA believes the rule to

be noncontroversial and anticipates no

significant adverse comment from the

public.

II. Description of Amendments

1. Section 614.4270—Policy

The provisions in this section are

nearly identical to provisions in

sections 1.8(b), 2.4(c), and 3.10(a) of the

Act and are therefore removed, as they

are duplicative and unnecessary.

2. Section 614.4280—Interest Rates

The FCA is amending existing

§ 614.4280, which concerns interest rate

plans and policy, to make it applicable

to direct lender associations as well as

to banks. This change will clarify that

the board of directors of every System

direct lender is responsible for

establishing interest rates or interest rate

plans. This change is consistent with

the underwriting regulation adopted

earlier this year, § 614.4150, which

requires the boards of directors of both

banks and associations to adopt written

policies and procedures that, at a

minimum, prescribe prudent loan

pricing practices.

Although no other substantive

changes are made to existing § 614.4280,

the FCA makes two technical changes to

the final sentence. The first clause,

which states that the board ‘‘may not

delegate its ultimate responsibilities for

setting interest rates,’’ is deleted as

unnecessary. Because the boards of
Federal Register / Vol. 62, No. 245 / Monday, December 22, 1997 / Rules and Regulations 66817

System institutions cannot delegate

their ‘‘ultimate responsibility’’ for any

policy decision, the FCA believes that

the deleted clause adds nothing to the

regulation. At the end of the final

sentence, the FCA has replaced the

reference to ‘‘fiscal plan and long-range

financial plan’’ with the words

‘‘operational and strategic business

plan,’’ to conform with the terms used

in § 618.8440 and elsewhere in FCA

regulations. The revised regulation is

redesignated as § 614.4155.

3. Section 614.4281—Discounts and

Related Fees

The FCA is deleting § 614.4281,

which authorizes BCs to ‘‘discount or

rediscount notes, drafts, acceptances,

and other negotiable paper at such rates

as may be determined by bank

management under policies of the bank

board as approved by the Farm Credit

Administration.’’ The FCA has

concluded that the language in

§ 614.4281 is not necessary to authorize

BCs to engage in any of the activities

listed, as they are already authorized

pursuant to section 3.7(a) of the Act.

The prior approval is not required by

the Act or necessary to the safe and

sound operations of the institution.

4. Section 614.4290—Interest on Past

Due Loans

Section 614.4290, which allows banks

and production credit associations

(PCAs) to provide for the collection of

interest at a higher rate after maturity,

is deleted as unnecessary. This deletion

will not affect the ability of a System

direct lender to provide for a default

interest rate in its loan documents, nor

will it diminish the rights of borrowers.

Section 4.13(a)(4) of the Act,

§ 614.4376(c) of the regulations, and the

provisions of Regulation Z (Truth-inLending) require that any change in the

interest rate applicable to an individual

borrower’s loan be disclosed to the

borrower within certain stated periods

of time. These requirements would

apply to interest rate changes after

maturity and, therefore, provide

sufficient protection for individual

borrowers.

5. Section 614.4300—Other Charges and

Fees

The FCA is deleting § 614.4300,

which states that banks and associations

may impose reasonable charges or fees

on members, borrowers, or applicants in

connection with loans or other services

rendered. It also provides that the fees

charged by an association are subject to

bank prior approval. Regulatory

authority to charge fees is unnecessary

because such authority is provided

expressly in sections 1.5(6), 2.2(13), and

3.10(a) of the Act.

Consistent with the FCA Board’s

regulatory philosophy of repealing

regulations that prescribe needlessly

detailed management and operational

practices, the FCA is deleting the

requirement that banks give prior

approval to affiliated associations’ fees.

Bank approvals that are appropriate to

the debtor-creditor relationship of a

bank and an association may be set forth

in the general financing agreement

between the institutions. Therefore, the

prior approval provision is unnecessary.

6. Section 614.4320—Production Credit

Associations

The FCA is deleting § 614.4320,

which states that ‘‘the rate of interest

charged by an association shall be the

rate authorized by the bank, within

programs prescribed by the bank board’’

and allows for different computations of

interest payments authorized under

such programs. This regulation in part

restates section 2.4(c) of the Act, which

provides for PCAs to charge interest

rates ‘‘under standards prescribed by the

board of the bank’’ and is thus

unnecessary. The regulatory direction

on the computation of interest payments

was driven by limitations in computer

accounting systems that no longer exist;

thus, it is now obsolete.

7. Section 614.4321—Differential

Interest Rate Programs

Section 614.4321 describes the types

of interest rate programs that System

banks and associations may adopt under

policies of their boards of directors. This

section was recently updated by

amending outdated language and

removing an unnecessary prior

approval. See 61 FR 67186 (December

20, 1996). The FCA continues to believe

that it is important to set forth the

principle of nondiscrimination among

similarly situated borrowers in setting

differential interest rates. Therefore, the

language in this section is retained, and

the regulation is redesignated as

§ 614.4160 and moved to part 614,

subpart D.

III. Direct Final Rulemaking

The FCA is using a ‘‘direct final’’

procedure for this rulemaking. In a

direct final rulemaking, an agency gives

notice that a rule will become final at a

specified future date unless the agency

receives significant adverse comment on

the rule during the comment period

established in the rulemaking notice.

Direct final rulemaking is justified

under section 553(b)(B) of the

Administrative Procedure Act, 5 U.S.C.

551–59, et seq. (APA). Section 553(b)(B)

is the APA’s ‘‘good cause’’ exemption

for omitting notice and comment on a

rule where an agency finds ‘‘that notice

and public procedure thereon are

impracticable, unnecessary, or contrary

to the public interest.’’ However, rather

than eliminating public comment

altogether, as would be permissible

under section 553(b)(B), in a direct final

rule the FCA gives the public adequate

opportunity to comment on or object to

a rule. For a full explanation of direct

final rulemaking, see 62 FR 63644

(December 3, 1997).

The FCA believes that the changes to

12 CFR part 614—subpart G fit the

category of rules appropriate for direct

final rulemaking. These changes delete

unnecessary approvals, remove

duplicative language, and incorporate

prudent oversight standards that the

FCA already applies to all institutions.

As such, the amendments are

straightforward and noncontroversial.

For these reasons, the FCA does not

anticipate that there will be significant

adverse comment on this rulemaking.

This rule has a 30-day comment

period. If, during that period, the FCA

receives a significant adverse comment

on the rule, the FCA will withdraw the

rule and may either issue another direct

final rule or promulgate the rule in

proposed form. A significant adverse

comment is defined as one where the

commenter explains why the rule would

be inappropriate, including challenges

to the rule’s underlying premise or

approach, or would be ineffective or

unacceptable without a change. In

general, a significant adverse comment

would raise an issue serious enough to

warrant a substantive response from the

FCA in a notice-and-comment

proceeding.

If no significant adverse comment is

received, the FCA will publish its

customary notice of the effective date of

the rule following the required

Congressional waiting period under

section 5.17(c)(1) of the Act.

List of Subjects in 12 CFR Part 614

Agriculture, Banks, banking, Flood

insurance, Foreign trade, Reporting and

recordkeeping requirements, Rural

areas.

For the reasons set out in the

preamble, part 614 of chapter VI, title 12

of the Code of Federal Regulations is

amended to read as follows:

PART 614—LOAN POLICIES AND

OPERATIONS

1. The authority citation for part 614

is revised to read as follows:

Authority: 42 U.S.C. 4012a, 4104a, 4104b,

4106, and 4128; secs. 1.3, 1.5, 1.6, 1.7, 1.9,
66818 Federal Register / Vol. 62, No. 245 / Monday, December 22, 1997 / Rules and Regulations

1.10, 1.11, 2.0, 2.2, 2.3, 2.4, 2.10, 2.12, 2.13,

2.15, 3.0, 3.1, 3.3, 3.7, 3.8, 3.10, 3.20, 3.28,

4.3A, 4.12, 4.12A, 4.13, 4.13B, 4.14, 4.14A,

4.14C, 4.14D, 4.14E. 4.18, 4.18A, 4.19, 4.36,

4.37, 5.9, 5.10, 5.17, 7.0, 7.2, 7.6, 7.7, 7.8,

7.12, 7.13, 8.0, 8.5, 8.9 of the Farm Credit Act

(12 U.S.C. 2011, 2013, 2014, 2015, 2017,

2018, 2019, 2071, 2073, 2074, 2075, 2091,

2093, 2094, 2096, 2121, 2122, 2124, 2128,

2129, 2131, 2141, 2149, 2154a, 2183, 2184,

2199, 2201, 2202, 2202a, 2202c, 2202d,

2202e, 2206, 2206a, 2207, 2219a, 2219b,

2243, 2244, 2252, 2279a, 2279a–2, 2279b,

2279b–1, 2279b–2, 2279f, 2279f–1, 2279aa,

2279aa–5, 2279aa–9); sec. 413 of Pub. L. 100–

233, 101 Stat. 1568, 1639.

Subpart D—General Loan Policies for

Banks and Associations

2. Sections 614.4280 and 614.4321 in

subpart G are redesignated as

§§ 614.4155 and 614.4160 in subpart D,

and § 614.4155 is revised to read as

follows:

§ 614.4155 Interest rates.

Loans made by each bank and direct

lender association shall bear interest at

a rate or rates as may be determined by

the institution board. The board shall

set interest rates or approve individual

interest rate changes either on a case-bycase basis or pursuant to an interest rate

plan within which management may

establish rates. Any interest rate plan

shall set loan-pricing policies and

objectives, provide guidance regarding

the circumstances under which

management may adjust rates, and

provide the upper and lower limits on

management authority. Any interest rate

plan adopted shall be reviewed on a

continuing basis by the board, as well as

in conjunction with its review and

approval of the institution’s operational

and strategic business plan.

Subpart G—Interest Rates and

Charges

Subpart G [Removed and Reserved]

3. Subpart G, consisting of

§§ 614.4270, 614.4281, 614.4290,

614.4300 and 614.4320, is removed and

reserved.

Dated: December 16, 1997.

Floyd Fithian,

Secretary, Farm Credit Administration Board.

[FR Doc. 97–33260 Filed 12–19–97; 8:45 am]

BILLING CODE 6705–01–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 71

[Airspace Docket No. 97–AGL–44]

Modification of Class E Airspace;

Grand Rapids, MI

AGENCY: Federal Aviation

Administration (FAA), DOT.

ACTION: Final rule.

SUMMARY: This action modifies Class E

airspace at Grand Rapids, MI. An

Instrument Landing System (ILS)

Standard Instrument Approach

Procedure (SIAP) to Runway 35 has

been developed for Kent County

International Airport. Controlled

airspace extending upward from 700 to

1,200 feet above ground level (AGL) is

needed to contain aircraft executing the

approach. This action increases the

radius of the existing Class E airspace.

EFFECTIVE DATE: 0901 UTC, February 26,

1998.

FOR FURTHER INFORMATION CONTACT:

Michelle M. Behm, Air Traffic Division,

Airspace Branch, AGL–520, Federal

Aviation Administration, 2300 East

Devon Avenue, Des Plaines, Illinois

60018, telephone (847) 294–7568.

SUPPLEMENTARY INFORMATION:

History

On Friday, September 19, 1997, the

FAA proposed to amend 14 CFR part 71

to modify Class E airspace at Grand

Rapids, MI (62 FR 49182). The proposal

was to add controlled airspace

extending upward from 700 to 1200 feet

AGL to contain Instrument Flight Rules

(IFR) operations in controlled airspace

during portions of the terminal

operation and while transiting between

the enroute and terminal environments.

Interested parties were invited to

participate in this rulemaking

proceeding by submitting written

comments on the proposal to the FAA.

No comments objecting to the proposal

were received. Class E airspace

designations extending upward from

700 feet or more above the surface of the

earth are published in paragraph 6005 of

FAA Order 7400.9E, dated September

10, 1997, and effective September 16,

1997, which is incorporated by

reference in 14 CFR 71.1. The Class E

airspace designation listed in this

document will be published

subsequently in the Order.

The Rule

This amendment to 14 CFR part 71

modifies Class E airspace at Grand

Rapids, MI, to accommodate aircraft

executing the ILS Runway 35 SIAP at

Kent County International Airport by

increasing the radius of the existing

controlled airspace. Controlled airspace

extending upward from 700 to 1200 feet

AGL is needed to contain aircraft

executing the approach. The area will be

depicted on appropriate aeronautical

charts.

The FAA has determined that this

regulation only involves an established

body of technical regulations for which

frequent and routine amendments are

necessary to keep them operationally

current. Therefore, this regulation—(1)

is not a ‘‘significant regulatory action’’

under Executive Order 12866; (2) is not

a ‘‘significant rule’’ under DOT

Regulatory Policies and Procedures (44

FR 11034; February 26, 1979); and (3)

does not warrant preparation of a

Regulatory Evaluation as the anticipated

impact is so minimal. Since this is a

routine matter that will only affect air

traffic procedures and air navigation, it

is certified that this rule will not have

a significant economic impact on a

substantial number of small entities

under the criteria of the Regulatory

Flexibility Act.

List of Subjects in 14 CFR Part 71

Airspace, Incorporation by reference,

Navigation (air).

Adoption of the Amendment

In consideration of the foregoing, the

Federal Aviation Administration

amends 14 CFR part 71 as follows:

PART 71—DESIGNATION OF CLASS A,

CLASS B, CLASS C, CLASS D, AND

CLASS E AIRSPACE AREAS;

AIRWAYS; ROUTES; AND REPORTING

POINTS

1. The authority citation for part 71

continues to read as follows:

Authority: 49 U.S.C. 106(g), 40103, 40113,

40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–

1963 Comp., p. 389.

§ 71.1 [Amended]

2. The incorporation by reference in

14 CFR 71.1 of the Federal Aviation

Administration Order 7400.9E, Airspace

Designations and Reporting Points,

dated September 10, 1997, and effective

September 16, 1997, is amended as

follows:

Paragraph 6005 Class E Airspace Areas

Extending Upward from 700 Feet or More

Above the Surface of the Earth

* * * * *

AGL MI E5 Grand Rapids, MI [Revised]

Kent County International Airport, MI

(Lat. 42°52′58′′N, long. 85°31′26′′ W)