The FCA is the Farm Credit System’s (FCS) regulator, and the FCA’s executive Board governs the FCA and oversees its activities. It formulates, approves, administers and enforces the FCA’s policies. Notably, the Board may approve potential Farm Credit institution mergers, and it is supposed to subject Farm Credit to regular oversight through consistent examination and rigorous supervision.
But for nearly three years, the Board has been perilously close to being unable to fulfill its duties. The Board requires a quorum of two members to “transact business.” Currently, the Board comprises only two members, Chairman Glen Smith and Board Member Jeffrey Hall. If either was ever unable to fulfill his duties, and decisions were required of leadership, then the FCA could come to a grinding halt.
Congress cannot allow that to happen to Farm Credit’s regulator. Farm Credit is a massive institution: it holds more than $435 billion in total assets, and would be considered the eighth largest bank in the United States if it were regulated like a bank.
This precarity could have been avoided, however, if Congress had confirmed a past nominee, Rod Brown, over the objections and strong opposition of the Farm Credit Council, Farm Credit’s lobbying arm in Washington. And the Farm Credit Council’s opposition has had a real effect on the ability of the FCA to regulate: the FCA’s own Inspector General notes that vacancies in senior leadership leave it vulnerable to “disruption to Agency functions.”
Acting on this nomination swiftly is important. The FCA is long overdue for a full board that is willing and able to truly oversee Farm Credit and raise tough questions about current issues including its questionable, minimal record of lending on tribal lands, the alarming spate of mergers between Farm Credit associations, and its willingness to extend loans for luxury housing.
Congress should move quickly to hold confirmation hearings for this nomination. The FCA’s mission—making sure that Farm Credit plays by the rules and that America’s farmers get a fair shake—is too important to delay.