The board of directors of each Farm Credit System institution that engages in lending or leasing secured by collateral shall adopt well-defined and effective collateral evaluation policies and standards, that comply with the regulations in this subpart, to ensure that collateral evaluations are:

Sufficiently descriptive and detailed to provide ample support to the institution's related credit decisions;

Performed based on criteria established for the purpose of determining the circumstances under which collateral evaluations will be required and when they will be required. Such criteria must, at a minimum:

Establish when an institution will require a collateral appraisal completed under the USPAP rather than a collateral valuation; and

Take into account such factors as market trends, market volatility, and various types of credit, loan servicing, collection, and liquidation actions; and

Completed by a qualified evaluator in an unbiased manner.

The policies and standards required by this section shall, at a minimum, address the criteria outlined in §§ 614.4250 through 614.4267 of this subpart.

A Federal land bank association shall, with the approval of its respective Farm Credit bank, adopt collateral evaluation policies that are consistent with the bank's policies and standards.

An institution's board of directors may adopt specific collateral evaluation requirements, consistent with the regulations in this subpart, for loans designated as part of a minimum information program.