FCA Board approves charter for new service corporation
The Farm Credit Administration Board approved a request by AgriBank, FCB, for a charter for a new service corporation called Farm Credit Foundations. The Board also approved the articles of incorporation for the organization.
Currently, Farm Credit Foundations exists as part of AgriBank, FCB. It provides human resource services and benefits to AgriBank and its affiliated institutions; to U.S. AgBank, FCB, and its affiliated institutions; and to one association in the CoBank, ACB, district. Altogether, Farm Credit Foundations currently serves 7,800 employee-clients, as well as their dependents, across 47 employers; it also administers retirement plans for 6,500 retirees.
By transforming Farm Credit Foundations into a Farm Credit System service corporation, AgriBank seeks to increase the control and accountability of the institutions that use Foundations' services over its business direction, operations, and cost structure. It also seeks to create a viable human resource service business that delivers important economies of scale, allowing employers to provide competitive employee services and benefits. In addition, transforming Foundations into a service corporation will allow its employer-owners to focus on their core business models.
The Foundations' charter will become effective on Jan. 1, 2012. At this time, the employers that use its services will become user-owners of the new service corporation. The Foundations' headquarters will be in St. Paul, Minn.
FCS service corporations are authorized by section 4.25 of the Farm Credit Act of 1971, as amended. They are created to perform certain functions and services for the financial benefit of the System banks and associations that own and use the corporations.
In other business, the Board approved a notice of proposed rulemaking to amend FCA's liquidity and investment management rules pertaining to the Federal Agricultural Mortgage Corporation (Farmer Mac). FCA is proposing to update and strengthen the existing regulations in response to the recent financial crisis and recent developments in best practices.
In addition, the Dodd-Frank Wall Street Reform and Consumer Protection Act requires FCA to review all regulations that refer to, or require the use of, credit ratings; to remove these references and requirements; and to substitute other appropriate standards for measuring creditworthiness. The notice that the Board approved today solicits public responses to questions related to the removal of these references and requirements from regulations pertaining to Farmer Mac.
For more information about the proposed rule, see the attached factsheet.
Following a 30-day period for congressional review, the proposed rule will be published in the Federal Register for a 60-day comment period. Comments for the proposed rule may be submitted by electronic mail to email@example.com, through the Pending Regulations section of FCA's website at www.fca.gov, or through the federal government web portal at www.regulations.gov.
Comments also may be sent by mail to Laurie A. Rea, Director, Office of Secondary Market Oversight, Farm Credit Administration, 1501 Farm Credit Drive, McLean, VA 22102-5090. The public may read submitted comments at the FCA office in McLean, Va., or on FCA's website at www.fca.gov.