Group urges Congress not to add burdensome new regulations

By TIM HEARDEN
Capital Press

The nation's largest cattlemen's group is concerned that proposed lending-institution reforms could make it harder for farmers and ranchers to access the Farm Credit System.

The National Cattlemen's Beef Association frets that the proposed Consumer Financial Protection Agency will burden agricultural lenders with layers of new regulations.

Further, the proposal making its way through Congress could take oversight of the Farm Credit Administration out of the control of the House and Senate agriculture committees and put it in the hands of less-knowledgeable banking committee members, the NCBA fears.

The organization isn't sure exactly how the added regulations would affect cattle producers and other agricultural interests, but the lending market is tight already, and any potential "unintended consequences" are a cause for concern, said Colin Woodall, the NCBA's vice president of government affairs.

"Probably the biggest issue ... is Farm Credit has remained viable and solvent through all this crisis over the last couple of years," Woodall said. "That's why we have really gotten involved. They've gotten their heads on right. They're being good stewards of their mission here to be able to provide credit ... during this crisis."

Not to worry, said Steven Adamske, a spokesman for the House Financial Services Committee. If the Farm Credit System avoids predatory or abusive lending practices, it will face very little interference, he said.

"I think that the point where products become unfair, deceptive and abusive to consumers is where people will see the CFPA go to work," said Adamske, who works for committee Chairman Barney Frank, D-Mass. "To the extent that does not happen to Farm Credit ... you will see very little or nothing. But we want to make sure consumers are protected in the credit lending area."

The bill is far from completed, Adamske said, but he is unaware of any proposed change in the congressional jurisdiction over Farm Credit.

Prompted by perceived abuses in the mortgage loan, credit card and payday loan industries over the past 10 years, the proposed Consumer Financial Protection Agency would have broad authority over certain financial transactions.

The agency's jurisdiction would include mortgages, credit cards, student loans, auto loans, payday loans and other transactions, according to the online watchdog OpenCongress.

Frank's committee passed the legislation on a mostly party-line vote in October, and a version is now being debated in the Senate Banking Committee.

Established by Congress in 1916, the Farm Credit System provides $160 billion in government-backed loans and leases to farmers and other rural borrowers, according to the system's website.

Cattle producers use the loans for everything from land to equipment to animals, Woodall said. Lumping the Farm Credit System into broader efforts to resolve problems with Fannie Mae, Freddie Mac and the commercial banking and securities structure "would undermine the mission that the Agriculture Committees gave Farm Credit some 90 years ago," the NCBA wrote in a letter to Congress.

With regular banks scaling back loans, a viable and successful Farm Credit system becomes all the more important, Woodall said.

"They're actually doing a good job," he said. "We'd hate for them to get swept up in all the fervor of the people who failed, and make it harder for them to do business."

Online

The Consumer Financial Protection Agency Act: http://financialservices.house.gov/Key_Issues/Financial_Regulatory_Reform/FinancialRegulatoryReform/CFPA_Summary_of_HR_3126.pdf

The Farm Credit system: www.farmcreditnetwork.com