[Federal Register: July 12, 2006 (Volume 71, Number 133)]
[Proposed Rules]
[Page 39235]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12jy06-20]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
[[Page 39235]]
FARM CREDIT ADMINISTRATION
12 CFR Part 615
RIN 3052-AC23
Funding and Fiscal Affairs, Loan Policies and Operations, and
Funding Operations; Investments in Farmers' Notes
AGENCY: Farm Credit Administration.
ACTION: Proposed rule; withdrawal.
-----------------------------------------------------------------------
SUMMARY: The Farm Credit Administration (FCA or Agency) withdraws its
proposed rule to amend regulations governing investments in farmers'
notes (Farmers' Notes), and terminates this rulemaking. This notice
informs the public that this rulemaking has ended.
FOR FURTHER INFORMATION CONTACT:
Dawn Johnson, Policy Analyst, Office of Regulatory Policy, Farm Credit
Administration, Aurora, CO (303) 696-9737, TTY (303) 696-9259.
or
Richard A. Katz, Senior Counsel, Office of General Counsel, Farm Credit
Administration, McLean, VA 22102-5090, (703) 883-4020, TTY (703) 883-
4020.
SUPPLEMENTARY INFORMATION: The FCA terminates this rulemaking by
withdrawing its proposed rule to amend the Farmers' Notes regulation.
This rulemaking began on April 20, 2000 (65 FR 21151), when the FCA
published an advance notice of proposed rulemaking that asked the
public questions about ways to improve the funding and discount
relationship between Farm Credit banks and other financing institutions
(OFIs).\1\ In addition to recommendations for improving the OFI
program, some commenters suggested that the FCA also explore other ways
for the Farm Credit System (System or FCS) to provide funding and
liquidity to non-System agricultural lenders. In response to these
comments, the FCA held a public meeting in Des Moines, Iowa on August
3, 2001, that addressed both OFIs and ``other types of partnering
relationships between System and non-System lending institutions that
would increase the availability of funds to agriculture and rural
America.'' \2\ At the public meeting, System and non-System commenters
encouraged the FCA to promote other arrangements, in addition to the
OFI program, that would make it easier for the FCS to provide funding
and liquidity to non-System agricultural lenders. Many commenters
expressed their desire for more flexible and informal arrangements
between FCS and non-System agricultural lenders.
---------------------------------------------------------------------------
\1\ See 65 FR 21151 (April 20, 2000).
\2\ See 66 FR 35428 (July 5, 2001).
---------------------------------------------------------------------------
On August 11, 2003, the FCA adopted a proposed rule (original
proposed rule) on OFIs and Farmers' Notes.\3\ The FCA received 105
comment letters from both System and non-System lenders that
specifically addressed Farmers' Notes. All 98 non-System commenters
opposed the original proposed rule primarily because they believed that
it would give System associations a competitive advantage over
commercial banks. Seven System commenters expressed the view that
revising the Farmers' Note program could strengthen cooperation between
the FCS and non-System lenders and increase the flow of credit to
agriculture. However, many FCS commenters sought significant changes to
the proposal.
---------------------------------------------------------------------------
\3\ See 68 FR 47502 (August 11, 2003).
---------------------------------------------------------------------------
Based on these comments, the FCA adopted a final rule on OFIs, but
reproposed the Farmers' Notes rule.\4\ The second proposed rule
(reproposed rule) that the FCA issued on September 14, 2004, sought to
address the concerns of both System and non-System commenters.\5\ The
FCA received 776 comment letters in response to the reproposed rule.
Six FCS commenters told the FCA that the reproposed rule would dissuade
System associations from investing in Farmers' Notes because it was too
restrictive. The remaining 770 comment letters came from commercial
bankers or their trade associations who opposed the reproposed rule for
the same reasons that they opposed the original proposed rule.
---------------------------------------------------------------------------
\4\ See 69 FR 29852 (May 26, 2004).
\5\ See 69 FR 55362 (September 14, 2004).
---------------------------------------------------------------------------
These comment letters lead the FCA to conclude that enacting a
final rule on Farmers' Notes is unlikely to achieve the Agency's
objectives of increasing cooperation between System and non-System
lenders so more credit is available for agriculture and rural America.
For this reason, the FCA withdraws the proposed rule and terminates
this rulemaking.
Dated: July 6, 2006.
Roland E. Smith,
Secretary, Farm Credit Administration Board.
[FR Doc. E6-10940 Filed 7-11-06; 8:45 am]
BILLING CODE 6705-01-P