Pub. 7 2018 Issue 7

September 2018 21 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 If a YBS farmer or rancher also was classified as socially disadvantaged, then a loan to such a farmer would have to be counted four times. If that farmer had three FCS loans, then the loans to that farmer would be counted twelve times in the YBS data, greatly exaggerating FCS lending to YBS and socially disadvantaged farmers and ranchers. The ABA has long opposed this double and triple-counting because doing so exaggerates the extent of the FCS’s YBS lending. In other reports, the FCS has demonstrated that it can aggregate all loans to a farmer or rancher so that it can show the total amount of credit the FCS has provided to a particular borrower. This means the FCA, if it was so inclined or was directed by the ag committees, could publish data on lending to designated types of famers without exaggerating that data by double, triple, or quadruple counting individual loans to a particular farmer. Does the FCA Need Dodd-Frank-Like Resolution Powers? Another section of the Senate version of the Farm Bill not in the House version would greatly expand the powers of the Farm Credit System Insurance Corporation (FCSIC) to act as a conservator or receiver for any FCS institution. This provision accounts for about 10 percent of the total length of the Senate version of the Farm Bill. The Farm Credit Act already sets out, although not in great detail, the powers the FCA and FCSIC need in order to resolve an insolvent FCS institution. Whether the FCA requested this expansion of its resolution powers is not known, but given the length and legal complexity of the provision, the FCA most likely is its sponsor. If so, then the question is why now? Why is the FCA seeking these more extensive resolution powers, which are modeled in part on resolution provisions in the Dodd-Frank Act? Does the FCA see some looming financial problems within American agriculture that could lead to the failure of some FCS institutions, as occurred in the 1980s as a result of that decade’s ag crisis. Hopefully these questions will be addressed when a House-Senate conference committee resolves the differences between the two farm bills.