CoBank, the most prominent institution in the Farm Credit System (FCS), is authorized to make loans to cooperatives that provide essential services for rural areas –electricity and telephone access are the most common. Of course, CoBank has used this to justify its horrible history of lending to huge telecoms that aren’t cooperatives – Verizon, AT&T, Frontier Communications, US Cellular – and it’s only gotten worse.
And while CoBank has been making these enormous loans to investor owned, international corporations, rural electric utilities have suffered from a lack of investment.
These rural utilities have lacked investment to such a large extent that now the United States Department of Agriculture (USDA) has had to step in to do CoBank’s job for them. Two weeks ago USDA announced that it is “providing $3.6 billion in loans to fund 82 electric projects in 31 states.” That’s nothing to sneeze at.
Unless you’re CoBank.
Despite having $124.5 billion in assets, more than enough to help rural utility cooperatives, CoBank has dropped the ball on extending loans to help rural utility cooperatives, so much so that the USDA has to now step in to make sure the job’s getting done. Something’s wrong here.
If CoBank can’t hold itself accountable then who will? Will the Farm Credit Administration (FCA) step in to make sure CoBank is doing its job? If the FCA doesn’t step in, will Congress?
If CoBank and the FCS want to lend to utilities then they need to start lending more to the right utilities. No matter how much CoBank and the FCS might try to spin it, Verizon is not a rural cooperative. And Congress and the FCA need to hold CoBank’s feet to the fire – CoBank has shown that it can’t, or won’t, fulfill its mission.