Two trade groups filed arguments Friday in their appeal of a court decision allowing the Farm Credit System to expand its customer base.

In documents filed with the U.S. Court of Appeals in Washington, the American Bankers Association and the Independent Bankers Association of America argued that the government-sponsored Farm Credit System should not be allowed to extend credit to businesses that serve farms, such as seed and equipment dealers.

"The Farm Credit Administration is allowing the Farm Credit System to expand into more areas than the law allows," said John Blanchfield, manager of the ABA's agricultural banking and rural development division.

"The Farm Credit System is forgetting who it was created to serve- farmers and ranchers."

Marsha Pyle Martin, chairman of the Farm Credit Administration, has said she expects to prevail in the appeal.

A federal judge's ruling in December 1997 gave Farm Credit institutions permission to lend to companies that derive more than 50% of net income from farm-related services. Previously, Farm Credit institutions could lend to such companies only if almost all of their net income came from farm- related sources. Lutton

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