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

For Immediate Release
NR 08-14 (09-11-08)
Contact: Martha Schober or Christine Quinn, 703-883-4056
Web site:

FCA Board Approves Bookletter on Director Candidate Disclosures

McLEAN, Va., September 11, 2008 — The Farm Credit Administration (FCA or Agency) Board today approved a bookletter on the distribution of director candidate information by Farm Credit System (FCS or System) institutions. The bookletter clarifies the distinction between “campaign material,” which FCS institutions are prohibited from distributing to their voting stockholders, and “educational material,” which FCS institutions may distribute. Bookletters are documents issued by Agency officials that communicate FCA’s legal interpretations and the Agency’s position on specific issues.

FCA provided this clarification to ensure that its regulation that prohibits the distribution of campaign material does not keep institutions from providing educational material that voting stockholders need to make informed decisions when they vote. According to the bookletter, “campaign material is information clearly intended to influence the voting decisions of stockholders, while educational material is designed to inform voting stockholders of the background, experience, and qualifications of each candidate.”

The bookletter emphasizes that institutions must maintain impartiality in director elections, and it outlines steps that institutions can take when distributing educational materials to ensure the fair and equal treatment of all director candidates.


FCA staff delivered an annual update report to the Board on the System’s mission-related investments.

Under current rules, these investments may include Federal Agricultural Mortgage Corporation securities, investments in farmers’ notes, U.S. Department of Agriculture guaranteed obligations and certain other governmental obligations benefitting rural areas, certain municipal securities, and other investments approved by FCA on a case-by-case basis. As of June 30, 2008, the System’s mission-related investments totaled $4.8 billion, which represents 2.3 percent of the System’s total assets.

FCA began approving mission-related investment pilot programs for System institutions in 2005. These investments must be structured as investment securities and may not be loans or any instruments similar to loans. As of June 30, 2008, the System held $1.9 billion in investments through these pilot programs. Of that amount, 86.8 percent is guaranteed by a U.S. government agency or government-sponsored enterprise or is supported by a county or local government municipality.

FCA’s objective in approving these pilot programs is to help identify ways to improve the economic well-being of rural areas by promoting rural development in partnership with rural lenders and governmental entities. These programs direct the flow of funds toward rural enterprises with limited market access rather than toward large companies that typically have adequate market access.

In other business, the Board received a quarterly report on the FCS Building Association’s financial reports for the period ending June 30, 2008.

Notational Votes

Since the FCA Board meeting in August, five notational votes have occurred. Notational votes are actions taken by the FCA Board between Board meetings.

On August 14, the Board voted to allow Farmer Mac to retain nonprogram investments in auction rate certificates (ARCs) that became ineligible for Farmer Mac in early 2008.

On August 20, the Board determined that the Farm Credit Bank of Texas may include, subject to certain limits and conditions, issued and outstanding Series A subordinated notes in permanent capital and total surplus.

On the same date, the Board approved amending the Agency’s organizational chart to reflect the elimination of the position of Chief of Staff and the creation of the position of Chief Operating Officer.

On September 8, the Board approved the FY 2009 revised budget of $50,322,552 and the FY 2010 proposed budget of $54,828,569.

On the same date, the Board cleared, with conditions, the disclosure statement for the issuance of Class A noncumulative perpetual preferred stock by AgriBank, FCB, and determined that AgriBank may include, subject to certain limits and conditions, the stock in permanent capital, total surplus, and core surplus.


The Farm Credit Administration is the safety and soundness regulator of the cooperative Farm Credit System. FCA charters, regulates, and examines the 105 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 Leland A. Strom, Chairman and CEO; Nancy C. Pellett; and Dallas P. Tonsager.

Note: FCA news releases are available on the Web at