FOR IMMEDIATE RELEASE
ICBA Opposes FCS Expansion in House Farm Bill
ICBA Calls for 'Constructive Path' for the FCS and Community Banks
Washington, D.C. (July 20, 2007)—The Independent Community Bankers of America (ICBA) expressed profound disappointment that the House Agriculture Committee adopted unwarranted expansion of Farm Credit System (FCS) lending powers as part of the reauthorization of the 2007 farm bill and urged the House to adopt an amendment to be offered by House Financial Services Committee Chairman Barney Frank (D-Mass.) and Ranking Member Spencer Bachus (R-Ala.) stripping out the expansion provision when the bill reaches the House floor.
"The FCS expansion is economically unjustifiable and unenforceable. ICBA urges the House to adopt the bi-partisan Frank-Bachus Amendment and remove this expansion provision from the farm bill. It is not narrowly focused, lacks transparency, and is a political boondoggle granted to the FCS at a time when it is experiencing its most rapid growth in over a quarter of a century," said Camden Fine, ICBA president and CEO. "Instead, ICBA calls on Congress to have the FCS seek a more constructive path and work cooperatively with community banks to finance the agricultural sector and serve as a key source of funding for commercial banks."
"There is simply no reason a heavily subsidized government sponsored enterprise with numerous tax and funding advantages should be allowed to crowd out the thousands of private sector, tax-paying community banks in our rural communities simply to achieve their own self-serving expansion agenda. The FCS wants markets and customers without restraints while retaining government-granted privileges - that's bad public policy and bad farm lending policy," Fine said.
ICBA adamantly opposes the FCS's expansion program, called "Horizons" and embodied as part of the farm bill, because it will economically destabilize America's rural communities. The proposal unjustifiably allows the FCS to stray far from its mission to serve farmers, ranchers and their cooperatives, and instead provide the business, home and consumer lending currently provided by tax-paying financial institutions, including community banks.
In addition to granting new powers, the House Agriculture Committee's credit title expands the FCS's mortgage lending authority by increasing the population base for determining eligibility for FCS mortgage lending from towns of 2,500 in population to towns of 6,000 in population, adding 11 million people eligible for government-sponsored FCS mortgage lending. There are numerous private sector lenders serving local markets, and agribusiness and commercial firms have no trouble accessing credit.