Pub. 7 2012-2013 Issue 1

May/June 2012 25 Extraordinary Service for Extraordinary Members. credit institutions,” which presumably means the FCS. The CFTC clearly got the message, loud and clear, and found a way to exempt the FCS. Perhaps the CFTC will justify its reasoning when it publishes its final swap-dealer rule. George Beattie to FCSA: Pay Your Fair Share of Taxes George Beattie, president and CEO of the Nebraska Bankers Association, recently published an editorial tak- ing Farm Credit Services of America (FCSA) to task for bragging about the huge dividends it pays to its borrow- ers while paying next to nothing in corporate income taxes. As Beattie noted, FCSA has been “running adver- tisements throughout [Nebraska] that make a big deal about the ‘dividends’ they are paying customers who bor- row from them” while claiming that “they are the only lender who ‘shares’ with their customers.” FCSA brags on its website that it paid $130 million in dividends for 2011 and “more than $555 million” since 2004. Beattie correctly noted that FCSA “made $456.4 million in after-tax profits in 2011” after providing “for just $9.4 million in total federal and state taxes—just 2 percent of their pre-tax income!” Beattie also observed that according to FCSA’s annual report it “would have paid as much as $163 million in federal income taxes alone in 2011 if they were taxed like banks.” Even worse, in 2010 FCSA “paid just $308,000 in total taxes on income of $419 million.” Now that FCS associa- tions have published their 2011 annual report bankers everywhere should point out how much FCS institutions are paying in dividends (really interest rebates) to their borrowers while pay- ing next to nothing in taxes. Report FCS Lending Abuses Bankers are continuing to send FarmCreditWatch reports of FCS lend- ing 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 . Please provide as much detail 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 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 Email Bulletins at www.aba.com/ members+only/bulletin.htmand check or uncheck the appropriate boxes. For other inquiries, please contact Barbara McCoy at the ABA at 1-800-BANKERS or bmccoy@aba.com .  To contact Bert Ely, email bert@ely-co.com ; fax (703) 836-1403; phone (703) 836-4101; or mail PO Box 320700, Alexandria, Va. 22320. 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