Pub. 4 2015 Issue 1

l e a d i n g a d v o c a t e f o r t h e b a n k i n g i n d u s t r y i n k a n s a s 26 IT’S TIME TO REFORM THE FARM CREDIT SYSTEM By Frank Keating, President and CEO American Bankers Association I N A RECENT RADIO INTERVIEW IN SAN ANTONIO, Texas, Michael Mauldin – regional president of First Financial Bank, Hereford, Texas – described how the Farm Credit System has used its government guarantee to finance loans outside of its mission. Case in point: A $725 million loan for Verizon to buy out a European telecom company. The incredulous response from the show’s host: “What does that have to do with farming and ranching?” Earlier, in Birmingham, Ala., Bob Jones – president and CEO of United Bank, Atmore, Ala., and a member of ABA’s Board of Directors – explained in another radio interview how the Farm Credit System has lost sight of its original mission. “In 2012, only 17 percent of the $247 billion in outstanding Farm Credit System loans went to small farmers,” he said. “It morphed, as many bureaucracies do, into a much more far- reaching enterprise.” Bankers across the country – even those in suburban areas – have compelling stories about how the tax-advantaged Farm Credit System unfairly tilts the competitive playing field while exposing American taxpayers and our nation’s economy to significant risks. ABA is helping you share these experiences. And with guidance from our special ABAAgricultural Credit Task Force, composed of bankers and state association executives, we’re elevating and expanding our advocacy on this issue. In short, we're taking a more strategic and aggressive approach. That approach includes a new website – ReformFarmCredit. com – that will shine a spotlight on the Farm Credit System, the first and least-known of the government-sponsored enterprises. The website, set to go live in December, will help you tell your story to members of Congress and opinion leaders. It promises to be a powerful tool in getting the word out about FCS abuses and on-going mission creep. Taken together, the system is a $266 billion entity. If the Farm Credit System were a bank, it would be the ninth largest in the United States. In fact, it’s bigger than 99.9 percent of all banks in the country. These are facts policymakers need to know. They also need to know that as a GSE, the Farm Credit System represents a risk to taxpayers in the same way that Fannie Mae