ABA yesterday urged the Farm Credit Administration to withdraw a proposed change to the governance structure of Farmer Mac that could negatively alter the relationship between Farmer Mac and its lender-shareholders. Specifically, ABA opposed the proposed requirement that Farmer Mac’s elected directors have an official affiliation with a voting stockholder.
“FCA’s proposal means that [shareholders] would elect their representatives from a ballot made up exclusively of current marketplace competitors,” ABA said. “In contrast, the current structure allows Farmer Mac’s shareholders to elect unaffiliated directors,” who can “seek the perspectives of all shareholders within a given Class without any pressure to advocate for the interests of any one stockholder.”
ABA instead supported the current system, which allows each class of shareholders — Class A, made up of non-Farm Credit financial institutions, and Class B, made up of FCS institutions — to elect their own groups of board members who will best serve the shareholders’ interests, regardless of affiliation.