Pub. 7 2012-2013 Issue 5

www.nebankers.org 22 Extraordinary Service for Extraordinary Members. A legal partner you can trust. Jim Pfeffer 402.930.1735 jpfeffer@stinson.com 1299 Farnam Street, Suite 1500 Omaha, NE 6810 A valued partner is one who understands the nuances of your business and the importance of relationships secured by trust. Stinson’s banking attorneys are focused, yet creative. Thoughtful, yet tenacious. These qualities are instrumental in how we help clients navigate sophisticated transactions and deliver optimal results. Innovative ideas. Straightforward solutions. Stinson.com Omaha Kansas City St. Louis Jefferson City Overland Park Wichita Washington, D.C. Phoenix The choice of a lawyer is important and should not be based solely on advertisements. loans. Indirect lending is an especially risky form of lend- ing because the dealer stands between the lender and the borrower. AgDirect could generate material credit losses if it continues to grow unchecked. Scale Back Range of FCS Services The Farm Credit Act permits FCS institutions to offer to FCS “borrowers, members, and applicants . . . such fi- nancial-related services appropriate to their on-farm and aquatic operations . . . as determined . . . under regulations of the [FCA].” [emphasis supplied] As is readily evident from visits to FCS websites, FCS institutions increas- ingly promote a broad range of financial services. Specific services they can offer are authorized under a “Related Services List” that the FCA updates periodically. There are two fundamental problems with these “re- lated services.” First, a number of advertised services, notably cash-management services and credit-card like arrangements, are not specifically authorized as related services. Second, in offering these services the taxpayer- subsidized FCS is competing directly against taxpaying businesses of all types, such as accounting firms, consul- tants, and insurance brokers. Ample financial services providers of all types exist today in rural America, espe- cially given the increasing reach of the Internet, so the FCS is not serving an otherwise unmet need. The time has come for the FCA to scale back the scope of “financial- related” services FCS institutions can provide so as to reduce this form of unfair FCS competition. Best Wishes for the New Year Farm Credit Watch wishes all of its readers as well as their families, friends, associates, and customers the very best for the new year. While 2013 will be an interesting year for agriculture, we look to Chairman Long Thomp- son to bring much-needed transparency to the FCA and the FCS. Report FCS Lending Abuses Bankers are continuing to send Farm Credit 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. Please provide as much detail as possible about any loan that violates the spirit, if not the law, governing FCS lending. Z Q New FCA Chairman — continued 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.