Farm Credit System Divided Over National Charters

July 14, 2000

The Farm Credit System's lobbying arm says the decades-old cooperative lending system needs the "operating flexibility" that will come from national charters allowing lending units to operate nationwide. But the Texas Farm Credit Bank disagrees and has filed suit to overturn the new procedures.

At issue in the lawsuit are new rules that allow Farm Credit lenders to share loans with commercial banks and other private-sector lenders. The Farm Credit Bank of Texas says the Farm Credit Administration overstepped its authority.

In a letter to House Agriculture Committee Chairman Larry Combest (R-TX), the Farm Credit Council argues that the new rules will help farmers gain greater access to credit.

"National charters for Farm Credit institutions are good for farmers," said Kenneth Auer, president of the Farm Credit Council. "They will provide farmers with more financing opportunities and more choices."