Pub. 6 2017 Issue 3

April/May 2017 15 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 As best I can determine, there are no cooperatively owned telecommunications enterprises serving any portion of Hawaii, so there is no “similar entity” rationale for CoBank extending any credit to HTC. In addition to supplying most of the credit under this agreement, CoBank also served “as administrative agent, a joint lead arranger, bookrunner and swing line lender” for this financing. Essentially, CoBank served as HTC’s investment banker, hardly an activity for the FCS that Congress envisioned when it enacted the Farm Credit Act. This loan deserves especially close scrutiny from Congress. FCA approves two big FCS association mergers On February 16, the FCA granted preliminary approval to the previously announced merger of three FCS associations: Badgerland Financial, 1st Farm Credit Services, and AgStar Financial. The merged association will be called Compeer Financial, ACA, a name which gives no indication that it is a taxpayer-subsidized agricultural lender; it will serve portions of Minnesota, Wisconsin, and Illinois. Based on year-end 2016 numbers, Compeer would have had total assets of $19.1 billion, making it the third-largest FCS association. On March 6, the FCA gave a similar approval to United FCS to merge into AgCounty. The merged association will serve portions of Minnesota, Wisconsin and North Dakota. Based on year-end numbers, it would have had $7.2 billion of assets, making it the eighth largest FCS association. Both mergers will be effective on July 1, 2017. It will be interesting to see how soon these two deals trigger additional FCS association mergers. YOUR BANK. YOUR MARKET. YOUR ADVISOR. Discover audit, tax, and consulting solutions tailored precisely for banks: WWW.MOSSADAMS.COM / F I. Serving clients from 28 locations, including Kansas