This week marks the 82nd birthday of the Farm Credit Administration.
If you haven’t heard of the FCA, you’re not alone. Since being charged by President Franklin Roosevelt in 1933 to begin regulating the Farm Credit System, the little-known federal agency has eluded scrutiny. This is disconcerting because the FCA has, at least in recent times, become Farm Credit’s chief enabler.
For example, since June of last year the Farm Credit System – an entity established to help rural farmers and ranchers – has authorized $350M to Frontier Communications, $425M to AT&T and US Cellular, and $725M to Verizon.
Probably as a consequence of the Farm Credit Act of 1971, which expanded the authority and focus of the System, the FCA has seemingly been marginalized to that of idle bystander to allow such egregious activities to take place.
The FCA asserts that it operates by the ‘Arm’s Length Rule.’ According to its website, “FCA is committed to maintaining an arm’s-length relationship with the Farm Credit System. This means that Agency decisions must be independent of any undue influence, favoritism, or special access so that all parties coming before the Agency stand on an equal footing.”
That’s great, but the lip service doesn’t explain the System’s mission creep, nor does it validate its wildly stretched interpretation of the Farm Credit Act.
If Congress held an oversight hearing today, would policymakers approve of the cozy relationship that the Farm Credit System has with Big Telecom at the expense of America’s farmers and ranchers? It’s highly unlikely.
Of course, the only way to find out is to hold an actual hearing. Perhaps members of Congress would come to the consensus that there should be one regulator for all GSEs.
We’ll wait and see.
In the meantime, let’s say happy birthday to the FCA and wish for a new regulator in the coming year.