Echoing their House counterparts, leaders of the Senate Banking Committee are urging the Farm Credit Administration to withdraw a proposed rule that they say would give Farm Credit System lenders powers that go beyond their intended mission of serving farmers and ranchers.
In an Aug. 8 letter, Chairman Chris Dodd, D-Conn., and ranking member Richard Shelby, R-Ala., said "the proposed regulation is too broad, not sufficiently rooted in the" Farm Credit Administration's "current statutory authority, and inconsistent with its primary mission of providing credit to the farm sector."
The letter added that, if there are "serious credit shortfalls" in rural America, Congress should look into it and determine whether the Farm Credit System should be expanded. Meanwhile, however, the system's lenders "should focus its resources on those it has been charged by Congress to serve."
The letter is among the nearly 9,200 comments the FCA has received since June on its proposed Rural Community Investments rule, which would make permanent a pilot program that lets system lenders invest up to 150% of their capital in rural community projects such as hospitals and hotels through bonds in cities with less than 50,000 people. The rule would also let the lenders invest in venture capital firms in rural areas. It also has a clause that would allow for other types of investments to be considered by the regulator case-by-case.
On July 10, the FCA got a similarly toned letter from the leadership of House Financial Services Committee urging the proposal be withdrawn. The comment period ends Friday.
