The last time the Farm Credit System was subjected to a meaningful congressional oversight hearing was years, maybe even decades ago. It really depends on who you ask.
The ambiguity of it all speaks volumes about how and why the System has quietly grown into an unwieldy $266 billion government-sponsored enterprise (GSE) that is looking increasingly like the next Fannie Mae and Freddie Mac.
In fact, the System may have actually foreshadowed Fannie and Freddie, as it was the recipient of the first-ever federal government bailout in 1987.
While lawmakers had anxiety about injecting taxpayer money into a GSE with an economic model that had clearly failed, such alarm is – for the most part – oddly absent from today’s debate on Capitol Hill. This despite the fact that the Farm Credit System is vastly larger than it was in 1987.
Given its implicit backing of taxpayer funds, one would not be incorrect to say that the System is also a far greater liability.
With this in mind, the American public would stand to benefit from active congressional oversight to realign the System to its intended purpose.
In June 2014, during a House Agriculture Subcommittee hearing on Credit Availability in Rural America, several members commendably took a positive first step in questioning the System’s $725 million loan to Verizon to finance its purchase of a European cellular company.
Let’s hope the new Congress will carry this momentum into a full oversight hearing of its own.