Pub. 12 2017-2018 Issue 5

WWW.NEBANKERS.ORG 24 To contact Bert Ely, email bert@ely-co.com , phone (703) 836-4101, or send mail to P.O. Box 320700, Alexandria, Va. 22320. Reform Farm Credit: Help educate the public, the press, and policymakers. Get the facts, take a stand at http://reformfarmcredit.org . If your bank belongs to the American Bankers Association (ABA), you can enjoy a free email subscription to Farm Credit Watch or you can read it monthly online at www.aba. com. To receive Farm Credit Watch 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 22 role of the [FCA] in setting policy, [and] examining and regulating our nation’s largest agricultural lender, the [FCS].” He did express concern “about the current agricultural outlook, particularly with younger, risk-prone producers.” That is an excellent concern to have at this time, given the recent downturn in land values and crop prices, but the regulatory crunchwill come in dealing with troubled FCS associations and recurring instances where FCS institutions have violated the FCS’ lending authorities. In this regard, Smith should support publication of all FCA enforcement orders. FarmCredit Financial Partners, an Unknown FCS Entity A little-known element of the FCS is Farm Credit Financial Partners Inc., or FPI, an FCS service corporation provid- ing back-office services to four FCS as- sociations, the principal owners of FPI ( www.financialpartners.com) . The four associations are Northwest FCS, Farm Credit West, AgCountry FCS, and Farm Country East, respectively the fourth-, fifth-, eighth-, and ninth-largest FCS associations. At its November 9, 2017, meeting, the FCA Board of Directors authorized Farm Credit of Illinois, the 10th largest association, to join FPI’s ownership group. The smaller Fresno, Calif.,-based Madera Farm Credit and Yankee Farm Credit also belong to FPI. As is evident from its website, FPI pro- vides a broad range of financial products and services to its member associations. One can reasonably ask when other as- sociations will join FPI to take advantage of the economies of scale FPI most likely offers to its owners. A more interesting question: What does FPI’s growth signal in terms of further consolidation within the FCS, not only among associations but eventually between the two levels within the FCS—banks and associations? Put another way, as consolidation among the associations continues, what is the relevance of the FCS’ two-tier struc- ture—the four funding banks and the 69 associations? FCA Chairman Tonsager has essentially posed this question in several speeches since becoming chair- man, suggesting rather strongly that FCS institutions need to begin considering the future structure of the FCS. It will be interesting to see if Director Smith joins in that debate and the role FPI could play in advancing that debate. Best Wishes for the New Year Farm Credit Watch wishes its readers as well as their families, friends, associ- ates, and customers the very best for the NewYear. I joinwith America’s taxpaying bankers in urging the FCA, and especially its newest boardmember, to becomemore aggressive in 2018 in cracking down on FCS lending violations as well as other FCS violations of the Farm Credit Act. Hopefully, too, Congress will impose appropriate constraints on FCS lending when it enacts the next Farm Bill.  WALENTINE O’TOOLE, LLP When time is of the essence, experience counts. Walentine O’Toole blends confidence, experience and knowledge with the personal attention you can expect from a regional law firm. www.w alentineotoole .com 402.330.6300 11240 Davenport St . • Omaha, NE 68154-0125