Pub. 11 2016-2017 Issue 3

www.nebankers.org 20 Extraordinary Service for Extraordinary Members. to an FCA news release, “The bonds will provide financing to relocate and replace existing facilities.” AgStar is the fifth- largest FCS association; it is chartered to serve portions of Minnesota and Wisconsin. This FCS “investment” is highly questionable from several perspectives. First, the FCS is not authorized to lend to finance health-care facilities, regardless of howmeritorious the investment might be. Second, charac- terizing what essentially is a loan as a bond is a subterfuge to sidestep an important lending constraint Congress imposed on the FCS. If Congress wanted the FCS to finance rural medi- cal facilities, it would have explicitly authorized the FCS to do so. Third, while CoBank funds the seven FCS associations that serve portions of California, for whatever reason none of those associations are investing in these bonds. The FCA should cease authorizing “investments” that violate the intent of the Farm Credit Act. AgriBank Reports Sudden “Departure” of CEO On July 29, AgriBank, the second-largest FCS bank, an- nounced the sudden “departure” four days earlier of its CEO, Bill York. York’s departure follows by just a few months the announced retirement of long-time CoBank CEO Bill Engel, effective at the end of this year. No reason, such as early retire- ment, was given for York’s departure; he is 62 and had served for 10 years as AgriBank’s CEO. He was one of the FCS’ highest paid CEOs, earning $1.82 million in 2015. Retired AgriBank Vice President and General Counsel William Throne was named interimCEO, effective Aug. 1. Current AgriBank Senior Vice President and General Counsel Barbara Stille served as interim CEO for the six days between York’s departure and Throne coming back on board. Report FCS Lending Abuses Bankers are continuing to send FarmCredit Watch reports of FCS lending abuses such as FCS loans for rural estates, weekend getaways, and hunting preserves. Email reports of similar lending abuses in your market to: green-acres@ ely-co.com .  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 ABA Member 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.  Bert Ely — continued from page 19 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 Despite the FCS’ sharp increase in its loan-loss provision, loan quality remains quite high, reflecting the ability of the FCS to cream-skim stronger ag credits. Consequently, the FCS is well-reserved relative to its total non-performing assets.