Pub. 8 2019 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 18 THE POWER OF PARTNERSHIP WORKING TOGETHER FOR YOUR HOMEBUYING CUSTOMERS For nearly 19 years, Mortgage Investment Services Corporation (MISC) has been a strong partner with Kansas community banks. MISC’s only purpose is to assist community banks to make home loans for their customers. We combine our high-tech features with your face-to-face customer service. Your bank and your customers benefit from this working partnership. • No cost to sign up. No risk to give us a try. • No software or hardware investment by your bank • Free training and ongoing support for your loan officers • Wide range of fixed rate loan products • Free marketing support to attract new families to become bank customers • MISC serves 240 Community Banks in OK, KS, MO & CO • Fannie Mae Approved Seller/Servicer. Call Andrew Holtgraves or Bill Cole today to unlock the Power of Partnership! Andrew: (913) 390-1010 ext. 1019 Bill: (316) 706-7306 Andrew@MISCHomeLoans.com Bill@MISCHomeLoans.com serve as the insurer of deposits held at associations (subject to threshold limits). FCSIC’s deposit-insurance fund would be funded through annual premiums on deposit taking associations.” In effect, Reiners is proposing creating a new deposit-insurance fund not that many years after Congress merged the bankrupt FSLIC into the FDIC. Reiners does acknowledge that the FCS could get into financial trouble, as it did in the 1970s, stating that “should the FCS ever get into trouble, it will require a taxpayer bailout.” That is a startling but honest admission. He then acknowledges that “while the potential for an FCS bailout remains,” he erroneously states that “in 2008, Congress bailed out the largest banks to the tune of $700 billion — more than twice the amount of current FCS assets.” That is simply false, for as bankers know so well, the banking industry, through higher deposit-insurance premiums, paid for every dollar the FDIC spent protecting insured deposits in failed banks. The Reiners paper immediately raises two questions that he did not address. First, why did he write this paper and did any organization sponsor it? Second, did Reiners give any consideration as to how an expansion of the FCS’s banking powers, and especially permitting it to accept insured deposits, would affect how Congress deals with the FCS. From its origin over 100 years ago, the FCS has understandably been under the jurisdiction of the Senate and House Agriculture Committees. While I have long argued that the House Financial Services and Senate Banking Committees should exercise some legislative oversight over the FCS as it gets deeper and deeper into the banking business, the banking expansion that Reiners has proposed for the FCS surely would bring the FCS into the orbit of the Banking and Financial Services Committees, for the FCS would clearly be a banking organization offering FDIC-like deposit insurance. Accordingly, the Agriculture Committees would no longer have exclusive legislative jurisdiction over the FCS. Also, the FCS banks, as Reiners calls them, surely would be subject to the full panoply of banking regulation, including the Bank Secrecy Act and the Community Reinvestment Act. Does the FCS and the Farm Credit Council, the FCS trade association, really want that? I doubt it. Rural America faces credit challenges, as it always has. Converting the FCS into a rural banking monopoly, which Reiners’ FCS banking proposal, if enacted, would effectively accomplish, would greatly worsen those challenges. Neither agriculture, rural America, nor the American economy will benefit from such a monopoly. Instead, Congress should level the playing field between the FCS and commercial banks, by eliminating the favorable funding and tax advantages the FCS has long enjoyed, so that commercial banks can compete more effectively against the FCS in serving agriculture and rural America.

RkJQdWJsaXNoZXIy OTM0Njg2