Pub. 2 2014 Issue 1

winter 2014 27 CFTC Exempts FCS From Swaps Rules Applicable to Big Banks On Aug. 13, the Commodities Futures Trading Commission (CFTC) issued a final rule exempting from the swaps-clearing requirements mandated by the Dodd-Frank Act “swaps en- tered into by qualified cooperatives” regardless of the coopera- tive’s size, provided “that the cooperative’s members are either non-financial entities or other cooperatives whose members are non-financial entities.” This exemption effectively applies to all FCS institutions and to all credit unions no matter how large; Dodd-Frank exempted only banks and thrifts with less than $10 billion of assets from the swaps-clearing requirement. There is no justification for exempting large FCS institutions from Dodd- Frank’s swaps-clearing requirements. This is one more instance where Congress and the regulators have tilted the competitive playing field against taxpaying entities. FCA Proposes Huge “Cloud” of Data Outside FCA On Aug. 9, the Farm Credit Administration (FCA) issued a pro- posed rule to designate the Federal Farm Credit Banks Funding Corporation (FCS’ access to Wall Street) as the “central data re- pository manager” for data the FCA collects on FCS “institution accounts and [risk] exposures.” According to the proposed rule, the FCA will work with the FCS “to collect more comprehensive data submissions and enhance the reporting to facilitate the eval- uation of changing lending risks and conditions.” This enhanced data will help the FCA “to quickly and accurately identify and respond to risk [through] the collection of data on, and identifica- tion of, shared assets,” such as loans participated within the FCS. This enhanced data collection initiative is a tacit admission by the FCA that the FCS should be viewed as one large, integrated financial institution. However, the FCA apparently is concerned that outside parties may try to access this data through Freedom of Information Act (FOIA) requests, which is why it proposes to store this supervisory data at the Funding Corporation, which is exempt from the FOIA. However, should someone try to access this data, the Funding Corporation is to immediately notify the FCA “in writing . . . if there is a request for data from the reports of accounts and [risk] exposures.” Report FCS Lending Abuses Bankers are continuing to send Farm Credit Watch reports of FCS lending abuses such as FCS loans for rural estates, weekend getaways, and hunting preserves. Email reports of similar lending abuses in your market to green-acres@ely-co.com. Please provide as much detail as possible about any loan that violates the spirit, if not the law, governing FCS lending. n To contact Bert Ely, email bert@ely-co.com, phone (703) 836-4101, fax (703) 836-1403, or send mail to P.O. Box 320700, Alexandria, Va. 22320.If your bank belongs to the American Bankers Association (ABA), you can enjoy a free email subscription to Farm Credit Watch or you can read it monthly online at www.aba.com . To receive Farm Credit Watch by e-mail, please go to www.aba.com and visit ABA E-mail Bulletins and check the appropriate boxes. LINKING PRINCIPLES TO POLICY 2014 ABA Government relAtions summit MARCH 24–26 WAsHinGton, DC Visit aba.com/Summit