# 615.5171 Transfer of capital from banks to associations.(a) *Definitions for this section*—(1) *Transfer of capital* means any payment or forbearance by a Farm Credit Bank or agricultural credit bank (collectively, bank) to an affiliated association, including but not limited to:(i) The purchase of nonvoting stock or participation certificates;(ii) The payment of cash;(iii) Debt forgiveness or reduction;(iv) Interest rate concessions or interest-free loans;(v) The transfer of loans at other than fair market value;(vi) The reduction or elimination of standard loan servicing or other fees; and(vii) The assumption of operating or other expenses, such as legal fees or insurance premiums.(2) *Preferential transfer of capital* means a transfer of capital that is not available to all similarly situated affiliated associations.(3) *Nonroutine transfer of capital* means a transfer of capital that is not available in the ordinary course of business.(b) *Considerations for preferential or nonroutine transfers of capital.* Before authorizing a preferential or nonroutine transfer of capital, a bank board of directors must take into account and document whether:(1) The transfer of capital is in the best interests of all of the shareholders;(2) The bank will be able to achieve its capital adequacy and business plan goals after making the transfer of capital; and(3) The transfer of capital is the “least cost” alternative available and will enable the association to maintain sound, adequate, and constructive service to borrowers.(c) *Notification requirements.* At least 30 days before making a preferential or nonroutine transfer of capital to an affiliated association, banks must provide shareholders and the Chief Examiner of the Farm Credit Administration with a description of the transfer and the documentation required by paragraph (b) of this section.[64 FR 49961, Sept. 15, 1999]