Pub. 10 2015-2016 Issue 5

January/February 2016 25 Extraordinary Service for Extraordinary Members. To contact Bert Ely, email bert@ely-co.com , phone (703) 836-4101, fax (703) 836-1403, or send mail to P.O. Box 320700, Alexandria, Va. 22320. If your bank belongs to the American Bankers Association (ABA), you can enjoy a free email subscription to FCW or you can read it monthly online at www.aba.com . To receive FCW by email or to manage your subscription, visit ABAMember Email Bulletins at www.aba.com/Tools/Ebulletins/Pages/ default.aspx. For other inquiries, please contact Barbara McCoy at the ABA at (800) BANKERS or bmccoy@aba.com. Plus program, stating the following on its webpage: “Even if you don’t have a need for a line of credit, you can still take advantage of all the great CashPlus benefits as long as you have an active loan of some type. There are no minimum or maximum amount restrictions on CashPlus.” Either the FCA does not have a clue as to what those it regulates are doing or it intentionally misled Chairman Conaway as to the extent of deposit-taking by FCS institutions. YBS Lending A number of committee members asked Spearman about the FCS’ lending to young, beginning, and small (YBS) farm - ers. Again, Spearman and his colleagues tap-danced around this issue, overstating, as the FCA always does, the amount of YBS lending the FCS actually does. That is the case because an FCS loan to a farmer or rancher who is young (under 35), beginning (farming 10 or fewer years), and small (agricultural receipts below $250,000) is tripled-counted as a YBS loan. Despite this over-counting, as the July 2015 issue of Farm Credit Watch reported, FCS loans and commitments to YBS borrowers, as a percentage of total FCS loans and commit- ments, declined from 2009 to 2014. One positive note: There was broad agreement among committee members that the committee needs to hold FCS oversight hearings more frequently. Hopefully the inadequate job Spearman and his colleagues did in answering questions posed by committee members will cause that to happen. Ide- ally, the committee will hold annual oversight hearings. Maybe next time it will get better answers. No Response to FOIA Request Twenty months ago, on May 8, 2014, I filed a Freedom of Information Act (FOIA) request with the U.S. Treasury Department asking for a copy of all documents pertaining to the establishment of the FCS’ $10 billion line of credit at the Treasury Department. First created on Sept. 24, 2013, that line of credit has been renewed twice since then; it now expires on Sept. 30, 2016. Technically, the line of credit is an agreement between Treasury’s Federal Financing Bank and the Farm Credit System Insurance Corp., which insures the debt issued by the FCS’ funding arm, the Federal FarmCredit Banks Funding Corp. This Treasury line of credit was created without any congressional authorization and supposedly without the knowledge of anyone in Congress. The creation of this line of credit was justified by a report the Brookings Institution issued in November 2012 titled “FarmCredit SystemLiquidity and Access to a Lender of Last Resort.” One of its authors was Donald Kohn, who was vice chairman of the Board of Governors of the Federal Reserve during the 2008 financial crisis, a time when the FCS claims it experienced difficulty selling its debt at what it considered to be a reasonable spread over the Treasury yield curve. Pre- sumably the documents I have requested will tell the inside story as to how the line of credit came to be created and who knew what about its creation. Not surprisingly, the Treasury Department has dragged its feet in releasing the requested documents. I continue to persevere in obtaining them. Report FCS Lending Abuses Bankers are continuing to send Farm Credit Watch reports of FCS lending abuses such as FCS loans for ru- ral estates, weekend getaways, and hunting preserves. Email reports of similar lending abuses in your market to: green-acres@ely-co.com. Best Wishes for the New Year FarmCredit Watch wishes its readers as well as their fami- lies, friends, associates, and customers the very best for the New Year. I join with America’s taxpaying bankers in hoping that in 2016 the FCA will become more aggressive in crack- ing down on lending violations by FCS institutions as well as other FCS violations of the Farm Credit Act, especially those committed by CoBank.  Providing Nebraska Businesses with Fiber Optic Speed • Dedicated Internet Access • Ethernet COMPETING AT THE HIGHEST LEVEL STARTS WITH NEBRASKALINK 888-893-2185 8-893-218 nebraskalink.com