Pub. 5 2016 Issue 5

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 28 ©2016 Bert Ely SENATE AGRICULTURE HOLDS OVERSIGHT HEARING ON FCS, FCA O N MAY 19, the Senate Agriculture Committee held an oversight hearing on the FCS and its regulator, the Farm Credit Administration (FCA). The hearing was chaired by committee chairman Senator Pat Roberts of Kansas. The hearing was comparable to the hearing the House Agriculture Committee held in December. The ABA’s witness, Leonard Wolfe, president and CEO of United Bank and Trust Company, in Marysville, Kansas, was most effective in calling for an examination of the FCS to ensure that it is helping young, beginning, and small (YBS) farmers as required by the Farm Credit Act. As the FCW has reported numerous times, the FCS falls far short of meeting its FCS lending obligations, in part because it double and triple-counts many so-called YBS loans. While the Senate hearing did not generate quite the fireworks the House hearing did, still there were some very interesting revelations. One especially astounding statement was FCA Board Member Dallas Tonsager’s assertion that FCS institutions “can lend to full-time farmers for other [i.e., non- agricultural] businesses.” The committee should ask Tonsager to cite the specific provision in the Farm Credit Act which grants the FCS the authority to lend to farmers for their off- farm business activities unrelated to the FCS’s mission of financing agriculture and closely related activities. Mr. Tonsager was also quizzed about the $10 billion line- of-credit the Treasury Department’s Federal Financing Bank granted to the Farm Credit System Insurance Corporation (FCSIC) in 2013. He offered the same rationale the FCA had previously offered: the FDIC and the National Credit Union Share Insurance Fund have Treasury lines-of-credit, so the FCSIC should have one, too. (Tonsager failed to mention that Congress authorized the other two lines-of-credit, but has not authorized a line-of-credit for the FCSIC). I have had a Freedom of Information Act request pending at the Treasury Department for over two years, seeking copies of documents related to the creation of the FCSIC line-of- credit. Eventually we will learn how this line-of-credit was created without congressional assent. BERT ELY’S FARM CREDIT WATCH ® SHEDDING LIGHT ON THE FARM CREDIT SYSTEM, AMERICA’S LEAST KNOWN GSE