Date: 1988-02-23
Speaker: ST GERMAIN (democrat)
Chamber: H

Mr. Speaker. I rise In support of H.R. 3980. making technical cor. rections to the Farm Credit Act of 1987. Your Committee on Banking. Finance and Urban Affairs has worked with the Committee on Agriculture and the Committee on Energy and Commerce to craft technical amendments to the 1987 act. These amendments correct erroneous references and ensure that the acts Implementation Is consistent with congressional Intent. I can assure my colleagues that there are no new issues raised by the amendments to the secondary market provisions. The vast majority of amendments are purely technical and conforming changes. There are. however. two amendments which would correct inadvertent omissions in the act. In both instances it is clear that failure to correct these omissions could result In the operation of the Federal Agricultural Mortgage Corporation in a manner inconsistent with the intent of the conferees. The first amendment would require that any pool guaranteed by the Federal Agricultural Mortgage Corporation consist solely of qualified loans. Certainly. Congress did not intend that this new entity would guarantee pools which contain nonagricultural loans. While the act sets standards for the loans to be Included in a pool. without this amendment. nowhere in this act is the Corporation expressly prohibited from guaranteed pools which contain loans other than qualified agricultural loans. The second amendment would clarify that national banks could purchase and hold shares In the Federal Agricultural Mortgage Corporation. It was clearly the intent of the conferees that national banks along with bank holding companies. insurance companies. Farm Credit System institutions and other agricultural lenders could own shares in the Corporation. vote for members of the board of directors and participate In establishing corporate policy. Current law permits all of the abovenamed agricultural lenders. except national banks. to own shares in the Corporation. Without this second amendment we would be left in the bizarre situation where the local small bank. in many cases the most important source of agricultural credit for farmers. would be the only agricultural lender not represented on the board. Indeed. it is conceivable that national banks could be precluded from originating loans to be placed in pools guaranteed by the Corporation. The act requires that the Corporation obtain its operating funds partially by contributions assessed upon originators. In consideration of these contributions. originators receive stock. If rural national banks are prohibited from receiving stock. they cannot make contrihtlions and therefore cannot be originators of loans placed in guaranteed pools. Certainly the House and the Senate would not have passed legislation to assist farmers and agricultural lenders that would deliberately excluded rural national banks from participation. Mr. Speaker. I can assure my colleagues that all the provisions of this legislation within the jurisdiction of the Banking Committee are technical or clarifying. They serve to ensure an accurate interpretation of congressional intent. They are supported by both majority and minority members of the committee. I urge my colleagues to support this resolution.