§ 618.8390 Federal records in the districts. The following are Federal records: (a) Records in the Federal land banks and Federal land bank associations relating to Commissioner loans, including those records that existed as of the date any loans were purchased by the banks. (b) Records of the Federal Farm Mortgage Corporation. (c) Records of the Federal intermediate credit banks and production credit corporations in existence on December 31, 1956. (d) Records created prior to January 1, 1957, relating to the liquidation of any production credit association. (e) Records in the office of joint services up to December 31, 1956, relating to Commissioner loans, the Farm Credit Administration, and to the Federal intermediate credit banks, production credit associations, and Federal Farm Mortgage Corporation, including joint records of any such bank or corporation and a Federal land bank, bank for cooperatives, production credit association, or national farm loan association. Any bank or office of joint services that wishes to be relieved of the custody of Federal records, but cannot do so either because authority to destroy or microfilm them has not been obtained or because the retention periods approved by National Archives and the Congress require that the records by held either permanently or for further periods of time, may request the Farm Credit Administration to arrange with the General Services Administration to have such records transferred to a regional Federal Records Center. § 618.8420 Requests for additional disposal authority. If any bank or office of joint services wishes to dispose of Federal records for which disposal authority has not been obtained from the National Archives and the Congress, two samples of the records involved, together with a description of each record and the proposed retention period, should be sent to the Farm Credit Administration, which will refer the proposal to the National Archives and will notify the bank or office of joint services of the action taken. Subpart -Internal Controls § 618.8430 Internal controls. (a) General: The district board shall establish an internal control policy designed to provide effective control over and accountability for all funds, property, and other assets and including internal auditing of financial and compliance activities of the banks and associations in the district. (b) The adequacy and reliability of bank performance and the completeness of reporting on the internal controls, including internal auditing and other forms of inspection, appraisal, and evaluation will be a major consideration by Farm Credit Administration examiners in determining the scope of their external audit and examination of the associations and banks. In evaluating the effectiveness of the program, it is expected that the examiners will consider: (1) Location of internal audit functions in the organizational structure including independence of internal audit functions from operation and credit functions; relationship, accountability, and reporting to the bank presidents or to a principal officer of the banks and may provide for periodic review and reporting to the board of directors as it may determine. (2) Extent of internal controls and coordination of activities among banks, including, but not limited to: Dual control methods and measures to safeguard assets; checks for accuracy and reliability of accounting data and records and financial transactions; efficiency of operations with particular attention to minimizing unnecessary or wasteful practices in the use of resources; and adherence to prescribed policies and procedures. (3) Provision for an ongoing review of and modifications to the policy to assure that it is adhered to in an effective manner and attains the goals and objectives of the banks and associations. Land improved or unimproved which is devoted to or available for the production of crops and other products such as but not limited to fruits and timber or for the raising of livestock. § 619.9030 Agricultural products. That which is the direct result of husbandry and cultivation of the soil. The product is in its natural, unmanufactured condition. § 619.9040 Aquatic products. Fish and other marine life. § 619.9050 Associations. Refers to Federal land bank associations and production credit associations. § 619.9060 Bona fide farmer or rancher. A person owning agricultural land, or engaged in the production of agricultural products and livestock including aquatic products under controlled conditions. § 619.9080 Cooperative. § 619.9140 Farm-related businesses. A person which is engaged in furnishing to farmers and ranchers customtype farm-related services performed on the farm directly related to their onfarm operating needs. § 619.9150 Federated cooperative. An entity in which at least 80 percent of the voting control is vested in two or more eligible cooperatives. § 619.9160 Five basic credit factors. The rate of interest specified in the note or loan document which will prevail as the maximum rate chargeable to the borrower during the period of the loan. § 619.9180 Fixed interest spread. A percentage to be added to the cost of money to the bank or association as the means of establishing a lending rate. § 619.9190 Legal entity. Any partnership, corporation, estate, trust, or other entity which is legally vested with authority to conduct a business. § 619.9200 Loss sharing agreements. A contractual arrangement under which a group of associations, a group of banks, or a group of associations and a bank agree to share the risk of loss on loans made in excess of a specified amount or proportion of an individual participant institution's loans, net worth, reserves for losses, etc. § 619.9210 Merger. Combining of one or more organizational entities into another similar entity. § 619.9220 Moderate-priced housing. See § 613.3040(d) of this chapter. § 619.9230 Open-end mortgage loan plans. A mortgage loan which permits the borrower to obtain additional sums during the term of the loan. § 619.9240 Participation agreement. A contract under which a lender agrees to sell a portion of a loan to one or more purchasers under specific terms set forth in the agreement. § 619.9250 Participation certificates. Evidence of investment in a bank or association to which all the rights and obligations of stock attach with the exception of the right to vote in the affairs of the institution. § 619.9260 Primary security. The basic collateral securing the loan. § 619.9270 Producer or harvester of aquatic products. A person or persons engaged in the production or harvesting of aquatic products in open waters under uncontrolled conditions. § 619.9280 Production or harvesting of aquatic products in open waters under uncontrolled conditions. Extraction of aquatic products where no element of husbandry of the product is involved prior to such extraction where the applicant and the public have equal access to the product. § 619.9290 Recovery value. See § 614.4241 of this chapter. § 619.9300 Rural area. See § 613.3040 (f) of this chapter. § 619.9310 Rural residence. See 613.3040 (b) of this chapter. § 619.9320 Sound loan. See § 614.4140 of this chapter. § 619.9330 Speculative purposes. To buy or sell with the expectation of profiting by fluctuations in price. [40 FR 49078, Oct. 21, 1975] § 619.9340 Variable interest rate. An interest rate on the outstanding loan balances, which may be changed from time to time during the period of the loan, if provision is made in the note or loan document. 90-052-77-50 CHAPTER VII-NATIONAL CREDIT UNION ADMINISTRATION NOTE: For nomenclature changes in this Chapter, see 36 F.R. 18637, Sept. 18, 1971. 720 Description of office, disclosure of official records-availability of information, promulgation of regulations 721 Incidental powers Clarification and definition of account insurance coverage 746 747 Rebate procedures for Federally insured credit unions 748 749 750 Page 777 778 796 798 798 799 800 803 804 807 816 829 832 835 837 840 842 846 847 862 873 876 879 (d) "Credit Union" means a credit union chartered under the Federal Credit Union Act or, as the context permits, under the laws of any State. (e) "Regional Director" means the representative of the Administration in the designated geographical area in which the office of the Federal credit unon is located. (f) "Regional Office" means the office of the Administration located in the designated geographical areas in which |