The Farm Credit Administration’s (FCA) own watchdog has sounded the alarm about the risk posed by vacancies at the highest levels of the regulator’s management.
Making sure the FCA carries out its core mission to regulate Farm Credit is mostly Congress’ job. But just like other agencies, the FCA has an internal watchdog, its own Office of the Inspector General (OIG). This month, the FCA’s OIG issued a report focusing on the FCA’s “Management Challenges.”
These challenges are all significant, but one especially sticks out: “Because FCA is a relatively small agency with nationwide responsibilities, changes in the workforce—such as the retirement of management and senior employees—must be accounted and planned for to avoid undue disruption to Agency functions. The need for succession and human capital planning was highlighted in the past year by the retirement of multiple senior Agency leaders” [emphasis added].
It is critical that the FCA maintains a workforce sufficient to carrying out its mission to oversee the System and ensure that it is serving America’s farmers. But it should come as no surprise that the FCA is facing this systemic challenge when the issue starts at the very top! The FCA’s Board normally comprises three members, but has only had two members for almost two and a half years.
This is a glaring vulnerability: the FCA Board must have a quorum of at least two members to conduct any official business (i.e. any real, substantive regulation). If one of the current board members retires or becomes unable to fulfill their duties, then the FCA becomes a rump agency. It should go without saying that a $407.8 billion entity like Farm Credit needs a strong, effective and nimble regulator.
Reform Farm Credit has been vocal about this avoidable vulnerability since it first came about, urging Congress to confirm a nominee to fill the vacancy on the Board. The Farm Credit Council, the System’s lobbying arm, has of course stood in opposition.
The OIG’s report is accurate, if not timely. There’s no reason for the FCA Board to be this vulnerable. The FCA oversees a huge, nationwide System with hundreds of billions in assets – it needs to be able to regulate effectively. But with a vacancy putting the Board at risk of not achieving a quorum, it won’t be able to should either of the other two members retire. Congress must confirm a nominee to serve on the FCA Board unless it wants a rump regulator. America’s taxpayers deserve it.
