In an op-ed in Agri-Pulse today, Leonard Wolfe — president and CEO of United Bank and Trust in Marysville, Kan., and chairman of ABA’s Agricultural Credit Task Force — called on Congress and regulators to step up efforts to oversee the Farm Credit System to ensure that the government sponsored enterprise stays within the scope of its intended mission.
Wolfe argued that the FCS has shifted its focus away from young, beginning and small farmers in favor of lending to large entities like casinos and telecomm giants, claiming that these companies qualify for FCS financing because they are “similar entities” to farms and rural co-ops. However, as Wolfe wrote, “no reasonable person would compare Verizon to a rural telecommunications cooperative, nor Saratoga Casino and Raceway to a horse farm.”
Despite his criticism of the FCS’s lending practices, however, Wolfe said that the system has an important role to play in sustaining rural America. He stressed the importance of continuing the dialogue surrounding the FCS’s mission and oversight to ensure that its tax-subsidized lending dollars are being properly utilized and that other lenders — particularly community banks — can remain competitive in rural markets.
“Community banks and the Farm Credit System can compete, but there needs to be a level playing field, and that can only happen if the System is kept in check by its regulators and Congress,” Wolfe wrote. “[T]he Farm Credit System needs to conduct a rigorous examination of its mission, its values, its practices and how these comport with the spirit of its founding law.”