FCA News Release 04-13

News Release

Farm Credit Administration
1501 Farm Credit Drive
McLean, Virginia 22102-5090

For Immediate Release
NR-04-13 (08-03-04)
Contact: Hal C. DeCell III, Christine Quinn or Dana Wyckoff, (703) 883-4056
E-mail: info-line@fca.gov
Web site: http://www.fca.gov

FCA Receives Termination Request From Farm Credit System Association

McLEAN, Va., August 3, 2004 — The Farm Credit Administration (FCA or agency) Board has received a resolution from the Board of Directors of Farm Credit Services of America, ACA (Association) to terminate its status as an institution of the Farm Credit System (FCS or System), and then merge into a subsidiary of Rabobank Group. The Association provides credit to farmers and ranchers in Iowa, Nebraska, South Dakota, and Wyoming.

The FCS is a nationwide network of borrower-owned financial institutions that provide credit to farmers, ranchers, and producers or harvesters of aquatic products, farm-related businesses, rural homeowners, agricultural marketing and processing operations, agricultural cooperatives, and rural utilities.

In 1987, Congress authorized System institutions to terminate System status under specific circumstances. The statutory requirements are at 12 U.S.C. 2279d, Section 7.10 of the Farm Credit Act of 1971, as amended (Act).

FCA will review the request from the Association to ensure full compliance with agency regulations and the Act. The procedures for termination include:

Submission of the termination plan to FCA, including the proposed stockholder disclosure material, evidence of a new federal or state charter to be granted after termination, and a preliminary estimate of an exit fee. The exit fee is an amount equal to capital in excess of 6 percent of the association’s assets, calculated in accordance with FCA regulations;

FCA approval or disapproval, within 60 days of receipt of the plan of termination;

Submission of disclosure materials to stockholders and a stockholder vote.

A reconsideration petition. If the plan is approved, stockholders may petition for a re-vote. At least 15 percent of stockholders must sign the petition and file it with FCA within 35 days after the association mails the voting results to the stockholders.

If the plan is approved by stockholders, and is not overturned by a reconsideration vote, the termination would be in effect 90 or more days after the stockholder vote;

The association would then pay the exit fee to the Farm Credit Insurance Fund; as well as any other obligations as outlined in the statute and regulations.

Concurrent with the termination process, FCA will take steps to provide for Farm Credit service to agricultural producers in the four states, pending the final outcome of the termination request.

“The mission of this agency is to ensure a permanent, reliable source of credit for agriculture and rural America in good times and bad, and a safe and sound Farm Credit System,” said FCA Chairman and CEO Nancy C. Pellett. “The FCA Board will work to ensure that the agricultural producers in Iowa, Nebraska, South Dakota, and Wyoming have continued access to the credit they need now and in the future.”

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The Farm Credit Administration is the safety and soundness regulator of the Farm Credit System. FCA charters, regulates, and examines the 110 banks, associations, and service corporations of the System. System institutions make loans to agricultural producers and their cooperatives nationwide. Members of the FCA Board are Nancy C. Pellett, Chairman and CEO, Douglas L. “Doug” Flory, and Michael M. Reyna.

Note: FCA news releases are available on the Internet. Access the FCA Home Page on the World Wide Web at www.fca.gov.