Rural Community Investments - Proposed Rule - Comments received after 8/15/08
Gary Van Meter
Office of Regulatory Policy
Farm Credit Administration
1501 Farm Credit Drive
McLean, VA 22102-5090
Dear Mr. Van Meter:
We understand the Farm Credit Administration (FCA) is currently accepting comments on a proposed regulation for the Farm Credit System’s (FCS) Mission Related Investment Authority. Although we are neutral in our stance related to this regulatory authority for FCS, we would find value in this authority if it is conducted in collaboration with rural community banks and partner organizations. Rural community economic development is dependent on having broader financing tools which provide greater capital capacity and long-term fixed rate financing availability. When these tools are used in tandem with community banks and partners in rural communities, it allows for locally-led economic development.
The Farm Credit Association in our area has established this collaborative model in working with partners. It makes sense that this kind of approach is utilized under this authority. Our organization is interested in developing relationships with capital resources that provide rural communities access to a reasonable cost of funds and greater liquidity, especially in the current economic environment. A benefit of such a resource would be to establish new commercial market opportunities that can serve to grow the bank’s client base and further the economic development of our rural community.
When the Farm Credit System offers these tools in collaboration with rural partners, as could be offered through the proposed regulation, it would create an opportunity for a new partnership which would provide enhanced access to USDA programs and industry expertise. In these situations, there is a win for the client, a win for the rural bank and a win for the Farm Credit Association. Most importantly, there is a win for the rural community. This collaborative approach is preferable to a competitive approach and provides rural America new economic development opportunities. We support our community banks and rural communities having access to this funding process.