ICBA is encouraging bankers to weigh in by the December 22 deadline against two sets of proposals to expand the powers of the Farm Credit System. The two proposals by the FCS's regulator, the Farm Credit Administration, include: 1) a request to allow FCS to engage in farm management and ag trust services and 2) a "farmer notes" proposal that, while it would enhance the OFI program that some commercial lenders use, would also institute a reinvented authority to allow FCS unabridged entry into consumer lending through the financing of retailers' credit needs.
FCA's Farm Management Services authority would allow FCS to provide management of agricultural properties for real estate owners in rural areas. FCS farm managers would present the customer with a full spectrum of lease or custom farming options aimed at generating the best return on producers' assets. FCA's Agricultural Trust Services authority would allow FCS to assist customers in creating a trust and managing its assets. As the trustee, FCS institutions would handle responsibilities involved in settling the estate.
FCA's Farmer Notes' authority would allow FCS to "provide liquidity" to private retailers, merchants and cooperatives that sell farm machinery, supplies, equipment, home appliances, and other items. This program would open the door to allowing all types of consumer lending by the FCS. A large number of private companies already offer these same services and it is inappropriate for a GSE to engage in such activities at the expense of the private sector. Additional information will be posted at www.icba.org in the "members only" section under Ag Issues/Farm Credit System links.