Pub. 9 2014-2015 Issue 3

www.nebankers.org 28 Extraordinary Service for Extraordinary Members. 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. recent years, larger farmers are more likely to pay cash for smaller equipment purchases. Some of these loans may be to non-farmers eligible to borrow from the FCS. More likely, though, much of this growth in small loans has stemmed from FCS associations lending to borrowers ineligible to borrow from the FCS or from FCS indirect lending programs, such as AgDirect, that clearly reach out to borrowers ineligible to borrow directly from the FCS. Other loans may simply be consumer loans that banks should be making. The FCA needs to explain who these non-small-farmer borrowers are while clamping down on this especially egregious lending abuse by FCS associations. At the other end of the lending spectrum, individual loans and loan commitments of more than $1 million to non-small- farmers have grown steadily as a percentage of total FCS loans and commitments, from 61.2 percent of total FCS loans and commitments at the end of 2007 to 66 percent at the end of 2013. The average size of these loans also rose over that six- year period, from$1.087million to $1.238million. Of course, as noted above, the FCS does not report loan data aggregated by borrower, so FCS credit exposures to individual large bor- rowers are much greater than these individual loan amounts. FOIA Request Filed With Treasury Department Pressing on in my investigation of the $10 billion line of credit the Farm Credit System Insurance Corp. (FCSIC) secretly obtained last year from the U.S. Treasury Depart- ment’s Federal Financing Bank, I have finalized a Freedom of Information Act (FOIA) request with the Treasury Depart- ment to conduct an extensive search of its records pertaining to the creation of that line of credit. A cost will be associated with this search, but it will be worth it if it produces further insights as to how this line of credit came to be created. On a related note, this one-year line of credit expires on Sept. 24. It will be interesting to see if it is renewed and, if so, what changes will be made in it. 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 asmuch detail as possible about any loan that violates the spirit, if not the law, governing FCS lending.   Bert Ely — continued from page 27 Stinson Leonard Street LLP serves as legal counsel to more than 200 financial institutions throughout the U.S., including community banks, regional banks and large national banks. Our attorneys handle a variety of matters including commercial lending; financial institutions mergers and acquisitions; regulation and compliance; and payment systems. You can count on us for creative, effective solutions to your most complicated deals. A legal partner you can trust. Aaron B. Johnson 402.930.1726 aaron.johnson @ stinsonleonard.com James M. Pfeffer 402.930.1735 jim.pfeffer @ stinsonleonard.com Law Offices in 14 Locations Nationwide The choice of a lawyer is important and should not be based solely on advertisements. STINSON LEONARD STREET LLP \\ STINSONLEONARD.COM 30168 NE Banker Ad_Horiz 8/22/14 9:11 AM Page 1