Farm Credit Administration
1501 Farm Credit Drive
McLean, Virginia 22102-5090
For Immediate Release
Contact: Martha Schober or Christine Quinn, 703-883-4056
Web site: www.fca.gov
FCA Board Approves Final Rule to Reduce Regulatory Burden
McLEAN, Va., October 12, 2006 — The Farm Credit Administration (FCA or Agency) Board today approved a final rule to repeal or revise certain FCA regulations in order to reduce the regulatory burden on the Farm Credit System (FCS or System).
The passage of the rule marks the end of a process that began in May 2003, when the FCA published a notice requesting public input on the necessity and effectiveness of the Agency’s regulations. FCA addressed most of the comments received earlier; and this rule, together with a notice published in the Federal Register on March 28, 2006, addresses all remaining public comments.
The final rule makes the following five amendments:
Clarifies that each service corporation is not required to offer stock to every System bank and association.
Allows new System employees to report to the Standards of Conduct official within 5 days of starting employment rather than requiring them to report within 30 days of accepting employment.
Repeals an obsolete regulation related to bankers’ acceptances.
Amends a restriction on the dividends that a cooperative may pay to its members in order to qualify for certain System financing.
Clarifies appraisal requirements for System business loans to make FCA rules more consistent with the rules of other Federal banking regulators with respect to compliance with Uniform Standards of Professional Appraisal Practices versus FCA regulatory appraisal requirements.
Passage of this rule is part of the Agency’s continuing effort to streamline the regulatory process so the System can more efficiently fulfill its mission to provide a dependable source of credit to America’s farmers, ranchers, aquatic producers, cooperatives, and rural residents.
Following its publication in the Federal Register, the final rule will take effect after 30 days during which either body of Congress is in session.
In other business, the Board received a quarterly report from the Office of Examination on the financial condition of the FCS as of June 30, 2006. The report showed that the overall combined System financial condition remained fundamentally sound in all material respects and its performance was strong. Both FCS assets and capital had increased to $150 billion and $23.5 billion, respectively. The FCS’s asset quality statistics continued to reflect a high-performing portfolio and a very manageable level of risk, with less than 0.6 percent of loans classified as nonperforming. Earnings remained strong, with net income of $1.1 billion for the recent six-month period.
In a notational vote, the Board granted preliminary approval to a request to merge AgriLand, Farm Credit Services, into Heritage Land Bank, ACA. Both AgriLand, Farm Credit Services, and Heritage Land Bank, ACA, serve portions of eastern Texas. The proposed merger must be approved by stockholders before it can become effective. Notational votes are actions taken by the FCA Board between Board meetings.
The FCA is the safety and soundness regulator of the cooperative Farm Credit System. The FCA charters, regulates, and examines the 109 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 Dallas P. Tonsager.
Note: FCA news releases are available on the Internet. Access the FCA Home Page at www.fca.gov.