FCA withdraws proposal for national charters

Northwestern Financial Review, Nov 1, 2001

Che Farm Credit Administration has withdrawn its proposal to allow Farm Credit System financial institutions to adopt national charters. The FCA's board of directors noted the potential problem the proposal could cause to the co-operative nature of the system and the need for better business planning by Farm Credit System financial institutions.

The move immediately was applauded by the banking industry. "ABA was adamantly opposed to the national charters proposal because it posed significant safety and soundness risks, and raised a number of public policy concerns," said the American Bankers Association in a statement. "FCA's board deserves credit for doing the right thing," commented the Independent Community Bankers of America. "This decision is in the best interest of rural agricultural credit markets because it lessens the threat of large lenders cherry picking the best loans of small lenders while ignoring struggling family farmers."