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1 1 (January 22, 2021)

handle is hein.crs/govebsx0001 and id is 1 raw text is: Farmer Mac and Its Board Members Overview The FederalAgricultural Mortgage Corporation (Farmer Mac)is a secondary market for agricultural mortgages. It purchases loans fromoriginating lenders and provides other risk management tools to facilitate the agricultural lending market. It was created by Congress as a privately funded government-sponsored enterprise (GSE) similar to the housing GSEs such as Fannie Mae. Farmer Mac is governed by a 15-member board of directors, five of whomare nominated by the President and confirmed by the Senate. The Senate confirmed two board members during the Trump Administration: Charles Stones in December2020 and LaJuana Wilcher in December 2019, the latter named as chair of the board. No nominations are pending. Congres sionaloversight is providedby theHouse and Senate Agriculture Committees , which haveprimary jurisdiction for the Farmer Mac statutes. Farmer Mac Farmer Mac was established in the Agricultural Credit Act of 1987 (P.L. 100-233, Title VII) as a secondary market for agricultural loans. It purchases and pools qualified loans and may sellthemto investors as securities orhold themin its own portfolio. It provides riskmanagementtools to originating lenders that let themmake more loans to agricultural borrowers and satisfy regulatory requirements. Statutorily, Farmer Mac is codified in the Farm Credit Act of 1971 (12 U.S.C. §2279aa) with the Farm Credit System (FCS; see CRS Report RS21278, Farm Credit System). Financially and corporately, however, Farmer Mac is a separate entity fromthe FCS. Each has no liability for any of the others' debt. Administratively, Farmer Mac and the FCS have the same federal regulator-the FarmCredit Administration (see CRS In Focus IF10767, Farm Credit Administration andIts BoardMembers). Farmer Mac is an investor-owned corporation, not a member-owned cooperative like the FCS. Two classes of voting stock exist for (1) banks and insurance companies and (2) the FCS. Any investor may own nonvoting stock. As an independent entity, Farmer Mac is not supported by congressional appropriations and is not part of the U.S. Department ofAgriculture (USDA). Farmer Mac operates in four primary lines of business: farm and ranch, USDA guarantees, rural utilities, and institutional credit. In the farmand ranch business line, most activity is fromFarmer Mac purchasing and retaining eligible agriculturalmortgage loans. In that line ofbusiness, Farmer Mac also guarantees securities heldby third parties Updated January 22, 2021 that are backed by eligible loans and promises to buy specific agricultural mortgages under future adverse conditions by selling long-termstandby purchase commitments to fmancialinstitutions. The purchase commitments guarantee loans against default risk, while the originating lender retains interest rate risk and loan servicing responsibilities. In the guarantee line, Farmer Mac purchases the portion of loans that are guaranteed by USDA, thereby accepting the interest rate riskbut carrying no default risk. The rural utilities business line involves mostly loans to ruralelectric cooperatives. The institutional credit portion supports the general obligations of eligible financial institutions, defined as having borrowers and portfolios that are eligible for other Farmer Mac business. As of September 30,2020, Farmer Mac's total business volume (similar to assets) was $22 billion, up 4% in nine months since the end of2019. The largest share of Farmer Mac's business (nearly half) is in institutional credit, followed by farm and ranch, USDA guarantees, and rural utilities. Its core earnings (that exclude the effects of valuation fluctuations and infrequent or unusual transactions) was $74 million for the first nine months of 2020, up 7% overthe same periodin 2019. Board Members Congress prescribes a 15-member board of directors (12 U.S.C. §2279aa-2). Five are presidentially appointed and Senate confirmed, five are elected by stockholders to represent banks and insurance companies, and five are elected by other stockholders to represent the FCS. Five Presidentially Appointed and Senate Confirmed For the five presidentially appointed and Senate-confirmed members (Table 1), statute does not specify a termlength but says that such board members serve at thepleasure of the President. The President names one of the appointees to be chair of the board (12 U.S.C. §2279aa-2 (a). https://crs rept

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