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Farm Credit System Trying to Back-Door Congress

Over the past two years bankers across the country have rallied successfully to stop the Farm Credit System's efforts to expand their reach into commercial banking.  The latest victory took place when Congress flatly rejected their efforts to put amendments in the 2008 Farm Bill to help their cause.  

The System is now trying an end-run around Congress.  They are proposing to have the Farm Credit Administration develop regulations that would allow FCS entities to "invest" 150% of their surplus capital in financing hospitals, health care facilities, roads, bridges, transportation infrastructure, venture capital funds and any other type of investment the FCA approves, if the investment is located in a community with a population of less than 50,000.

The comment period on the proposed regulations closes August 18, 2008. Please write today and express your opposition to this proposal.  While you can send this communication "AS IS" it will work a lot better - and mean more - if you use specific examples of what it would mean to YOUR BANK.  

You can e-mail your letter or print it out and mail it in. If you choose to mail your letter here is the address:

Mr. Gary K. Van Meter
Deputy Director, Office of Regulatory Policy
Farm Credit Administration
1501 Farm Credit Drive
McLean, VA 22102-5090

Here are the points you can make: 

I am writing to express my opposition to the Farm Credit Administration's (FCA) proposed rule that would allow Farm Credit System (FCS) lenders to invest up to 150 percent of their capital surplus on projects unrelated to agriculture.
 
This proposed rule would shift the FCS away from its statutory mission to agriculture by authorizing FCS institutions to finance hospitals, healthcare facilities, transportation infrastructure, hotels, office parks, manufacturing facilities, and any other types of investments FCA identifies as appropriate.
 
The proposed rule raises safety and soundness issues.
 
The proposed FCA rule would permit FCS institutions to invest up to $36 billion of their owners' capital surplus in speculative investments that the FCA has little or no experience in evaluating for safety and soundness.
 
Poor investment decisions could hurt the FCS's credit rating, resulting in higher interest rates and fees charged to farmers and ranchers. Not only could this harm farmers, ranchers, and the System's cooperative framework, it also could expose taxpayers to unwarranted risk.
 
The System should not be allowed to make investments in areas where it has no experience, no loan making authority, no branch networks, and no authority granted by Congress.
 
The Farm Credit System is a government-sponsored enterprise (GSE) created by Congress, with certain advantages and limitations, to serve a specific mission. This proposed rule moves the FCS away from that mission.
 
I respectfully urge the Farm Credit Administration to withdraw this proposed rule on “mission-related activities” for the reasons stated above.

 

To send and e-mail is easy – just click here and enter your zip code. There's a "cut and paste" series of choices you can use and the more specific you can be to your bank, the more power it will carry.

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