Pub. 9 2014-2015 Issue 2

www.nebankers.org 20 Extraordinary Service for Extraordinary Members. within the FCS: FCSA serves all of four states while 14 as- sociations serve three states to the south of FCSA—Kansas, Colorado, and Oklahoma. Other states, such as Texas with nine associations, Arkansas with four, and California with six, are prime candidates for in-state mergers. Are we entering an era of mega associations? New Insights Into FCS’ Treasury Line of Credit As reported in the March FCW, I filed Freedom of Informa- tion Act (FOIA) requests with the FCA and the Treasury De- partment to obtain documents related to the $10 billion line of credit the Farm Credit System Insurance Corp. (FCSIC) secretly obtained last year from the Treasury Department’s Federal Financing Bank. I have received some documents, with more on the way, as I try to piece together how this line of credit came to be. One surprising revelation, and possible violation of federal open-meeting requirements (the Govern- ment in the Sunshine Act), is that the FCA’s three-member board of directors, which also serves as the FCSIC’s board of directors, held several previously unknown, non-public meet- ings to receive briefings on how the line of credit would work. For example, on Sept. 24, 2013, FCA Board member Ken Spearman, who also serves as FCSIC’s chairman, wrote to a Treasury Department official to thank that official for “coming to McLean [where the FCA and FCSIC are headquartered] to provide a joint briefing for FCSIC and [FCA] Board members and staff.” On Feb. 28, 2014, Dorothy Nichols, the FCSIC’s chief operating officer, sent an email to the same Treasury Department official thanking him “for coming to the joint FCSIC/FCA Boardmeeting yesterday” to give a presentation. These briefings constituted meetings under the Sunshine Act since at least two of the three board members attended them. Therefore, these briefings should have been open to the public unless the two boards had first voted in openmeetings to close the briefings under one of the legally permissible reasons for doing so. Further, an attorney for the government agency holding a closed-door meeting must certify that the meeting was “properly closed to the public” under one of the permissible exemptions provided in the Sunshine Act. I am in the process of requesting the minutes of those closed-door briefings as well as the certification that the briefings were properly closed to the public. One of the documents I received was a set of PowerPoint slides prepared by the FCSIC staff, presumably to acquaint Treasury officials with the structure and finances of both the FCS and FCSIC. One chart was very informative, surely in an unintended manner, as it showed the Farm Credit Council (FCC) as amiddleman between the FCS and the congressional agriculture committees. The FCC is the trade association for FCS institutions and their senior management. While true, it is interesting that the FCA acknowledged the central role that the FCC plays in the regulation of the FCS. Report FCS Lending Abuses Bankers are continuing to send FCW 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.  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 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. One of the documents I received was a set of PowerPoint slides prepared by the FCSIC staff, presumably to acquaint Treasury officials with the structure and finances of both the FCS and FCSIC. One chart was very informative, surely in an unintended manner, as it showed the Farm Credit Council (FCC) as a middleman between the FCS and the congressional agriculture committees.  Bert Ely — continued from page 19