Pub. 6 2011-2012 Issue 4

November/December 2011 25 Extraordinary Service for Extraordinary Members. The EFT You can TRUST NetWorks is the Electronic Funds Transfer (EFT) service provider that Nebraskans have used and learned to trust like family for over 30 years. Our highly experienced staff is extremely knowledgeable and resourceful when it comes to assisting your institution. Give us a call to learn more about our services, you’ll have the opportunity to talk to someone who truly cares about and understands your EFT service needs. www.netseft.com Toll Free 800-735-6833 Local 402-434-8202 To contact Bert Ely, e-mail bert@ely-co.com ; fax (703) 836-1403; phone (703) 836-4101; or mail PO Box 320700, Alexandria, Va. 22320. participation interest in the transaction through the association and the LLP. The LLP purchases our stock equal to 6 percent of loan volume.” As of June 30, AgriBank reported $992.4 million of “retail equipment financing” loans on its balance sheet. FCSA originated most of those loans, as follows: On June 30, FCSA had invested $57.4 million in AgDirect; that investment presumably funded AgDirect’s purchase of AgriBank shares, which must equal 6 percent of the outstanding AgDirect loans on AgriBank’s books. FCSA’s $57.4 mil- lion investment divided by 6 percent equals $957 million, or 96.4 percent of the outstanding AgDirect loans owned by AgriBank. Howmany of those loans were originated outside of FCSA’s terri- tory or were to borrowers not eligible to borrow directly from the FCS and were not disclosed? In addition to providing taxpayer- subsidized credit to borrowers in- eligible to borrow directly from the FCS, there is no way anyone outside the participating FCS institutions can know how well AgDirect is perform- ing financially. AgDirect apparently does not file a call report or other financial report with the FCA. Con- sequently, no disclosure of AgDirect’s profitability or credit experience ex- ists, although it appears from AgriB- ank’s second-quarter report that $300,000 of AgDirect loans were in a non-accrual status as of June 30. However, FCSA reported AgDirect origination and servicing fees of $14.9 million for the second quarter alone, which suggests that the AgDirect program is quite profitable, at least for FCSA. The FCA should require AgDirect to file quarterly call reports and monitor the legality of its lending. Report FCS Lending Abuses Bankers are continuing to send FCW reports of FCS lending abuses such as FCS loans for rural estates, weekend getaways, andhuntingpreserves. E-mail reports of similar lending abuses in your market to green-acres@ely-co.com . Please provide asmuchdetail as possible about any loan that violates the spirit, if not the law, governing FCS lending. Farm Credit Watch Free to ABA Members If your bank belongs to the Ameri- can Bankers Association (ABA), you can enjoy a free e-mail subscription to FCWor you can read it monthly online at www.aba.com . To receive FCW by e-mail or tomanage your subscription, visit ABA E-Mail Bulletins at www. aba.com/members+only/bulletin. htm and check or uncheck the ap- propriate boxes. For other inquiries, please contact Barbara McCoy at the ABA at 1-800-BANKERS or bmccoy@ aba.com . Z