Opinion ID: 185991
Heading Depth: 3
Heading Rank: 1

Heading: Failure to Address Comment

Text: 12 As noted above, the Proposed Rule prompted over 270 comments including the one submitted by the plaintiffs. The preamble to the Final Rule said almost nothing about the comments, noting merely: 13 No commenter cited any statutory provision that restricts the authority of System banks and associations to participate in loans outside of their chartered territory. Only one comment letter mentioned the statutory authorities of System institutions to participate in loans. 14 65 Fed.Reg. at 24,101/2. The plaintiffs claim this statement did not adequately address their comment protesting the introduction of competition by the lifting of the geographic restrictions. In response the FCA points out that in the preamble to the Proposed Rule it had discussed out-of-territory lending and out-of-territory participations separately, whereas the plaintiffs' comment did not make such a distinction and was not specifically directed to the part of the Proposed Rule dealing with participations. Therefore, it argues, none of the comments it received was relevant to the Final Rule authorizing only out-of-territory participations and none required a response. 15 The FCA should have responded to the plaintiffs' comment. Although the FCA is not required to discuss every item of fact or opinion included in the submissions it receives in response to a Notice of Proposed Rulemaking, Pub. Citizen, Inc. v. Fed. Aviation Admin., 988 F.2d 186, 197 (D.C.Cir.1993), it must respond to those comments which, if true, ... would require a change in [the] proposed rule. Am. Mining Cong. v. United States EPA, 907 F.2d 1179, 1188 (D.C.Cir.1990). In this case the plaintiffs' comment was applicable equally to a rule limited to participations and to one that also removed the geographic restriction upon direct lending: it argued against the introduction into the System of competition generally, without regard to form. In the first sentence of the argument portion of their comment letter, the plaintiffs asserted broadly that the FCA does not have the statutory authority to implement intra-system competition. Letter from Bill Zimmerman, General Counsel, FCBT, to Patricia W. DiMuzio, Director, Regulation and Policy Division, FCA 10 (May 3, 1999) ( Plaintiffs' Comment ). The plaintiffs complained that the Proposed Rule would, by authorizing out-of-territory lending, effectively abolish Congress's carefully wrought statutory scheme of geographic boundaries and limitations. Id. at 15. That would be undesirable, the plaintiffs argued, because cooperation and interdependence are essential characteristics of the Farm Credit System. Id. at 18-19. 16 We find unpersuasive the FCA's response that the plaintiffs' comment lacked adequate specificity to out-of-territory participations. The plaintiffs argued that geographical boundaries were required by the Act and that the Proposed Rule would break down those boundaries; the Final Rule did just that. True, it did so only as to participations, but that was not a trivial part of what the plaintiffs had argued was unlawful. Specifically, the plaintiffs had argued that allowing an FCB to compete outside its geographic territory without the consent of the System lender whose territory is implicated would interfere with the cooperative nature of the system; the Final Rule authorized FCBs to compete outside their geographic territories as to participations without first obtaining that consent. The FCA asserts that the term out-of-territory lending as used in the Plaintiffs' Comment denotes only direct loans and not loan participations, but it offers no reason, and we see none, to believe that. We interpret the plaintiffs' comment, in keeping with the rationale that underlies it, to relate to all forms of out-of-territory lending, including but not limited to participation in loans originated by others. As such, their comment deserves an answer.