Federal Register: July 12, 2006 (Volume 71, Number 133)
DOCID: FR Doc E6-10940
FARM CREDIT ADMINISTRATION
Farm Credit Administration
CFR Citation: 12 CFR Part 615
RIN ID: RIN 3052-AC23
NOTICE: PROPOSED RULES
ACTION: Farm credit system:
DOCUMENT ACTION: Proposed rule; withdrawal.
Funding and Fiscal Affairs, Loan Policies and Operations, and Funding Operations; Investments in Farmers' Notes
The Farm Credit Administration (FCA or Agency) withdraws its proposed rule to amend regulations governing investments in farmers' notes (Farmers' Notes), and terminates this rulemaking. This notice informs the public that this rulemaking has ended.
Loan policies and operations, etc.—; Other financial institutions lending; withdrawn,
The FCA terminates this rulemaking by
withdrawing its proposed rule to amend the Farmers' Notes regulation.
This rulemaking began on April 20, 2000 (65 FR 21151), when the FCA
published an advance notice of proposed rulemaking that asked the
public questions about ways to improve the funding and discount
relationship between Farm Credit banks and other financing institutions
(OFIs).\1\ In addition to recommendations for improving the OFI
program, some commenters suggested that the FCA also explore other ways
for the Farm Credit System (System or FCS) to provide funding and
liquidity to nonSystem agricultural lenders. In response to these
comments, the FCA held a public meeting in Des Moines, Iowa on August
3, 2001, that addressed both OFIs and ``other types of partnering
relationships between System and nonSystem lending institutions that
would increase the availability of funds to agriculture and rural
America.'' \2\ At the public meeting, System and nonSystem commenters
encouraged the FCA to promote other arrangements, in addition to the
OFI program, that would make it easier for the FCS to provide funding
and liquidity to nonSystem agricultural lenders. Many commenters
expressed their desire for more flexible and informal arrangements between FCS and nonSystem agricultural lenders.
\1\ See 65 FR 21151 (April 20, 2000).
\2\ See 66 FR 35428 (July 5, 2001).
On August 11, 2003, the FCA adopted a proposed rule (original proposed rule) on OFIs and Farmers' Notes.\3\ The FCA received 105 comment letters from both System and nonSystem lenders that specifically addressed Farmers' Notes. All 98 nonSystem commenters opposed the original proposed rule primarily because they believed that it would give System associations a competitive advantage over commercial banks. Seven System commenters expressed the view that revising the Farmers' Note program could strengthen cooperation between the FCS and nonSystem lenders and increase the flow of credit to agriculture. However, many FCS commenters sought significant changes to the proposal.
\3\ See 68 FR 47502 (August 11, 2003).
Based on these comments, the FCA adopted a final rule on OFIs, but reproposed the Farmers' Notes rule.\4\ The second proposed rule (reproposed rule) that the FCA issued on September 14, 2004, sought to address the concerns of both System and nonSystem commenters.\5\ The FCA received 776 comment letters in response to the reproposed rule. Six FCS commenters told the FCA that the reproposed rule would dissuade System associations from investing in Farmers' Notes because it was too restrictive. The remaining 770 comment letters came from commercial bankers or their trade associations who opposed the reproposed rule for the same reasons that they opposed the original proposed rule. \4\ See 69 FR 29852 (May 26, 2004).
\5\ See 69 FR 55362 (September 14, 2004).
These comment letters lead the FCA to conclude that enacting a
final rule on Farmers' Notes is unlikely to achieve the Agency's
objectives of increasing cooperation between System and nonSystem
lenders so more credit is available for agriculture and rural America.
For this reason, the FCA withdraws the proposed rule and terminates this rulemaking.
Dated: July 6, 2006.
Roland E. Smith,
Secretary, Farm Credit Administration Board.
[FR Doc. E610940 Filed 71106; 8:45 am]
BILLING CODE 670501P
FOR FURTHER INFORMATION CONTACT
Dawn Johnson, Policy Analyst, Office of Regulatory Policy, Farm Credit
Administration, Aurora, CO (303) 6969737, TTY (303) 6969259. or
Richard A. Katz, Senior Counsel, Office of General Counsel, Farm Credit Administration, McLean, VA 221025090, (703) 8834020, TTY (703) 883 4020.