About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

1 1 (September 29, 2022)

handle is hein.crs/goveiyp0001 and id is 1 raw text is: Con gressionol Research Servkt nformning Ihe leisIitive debatL sirnce 1914 Farmer Mac and Its Board Mem Overview The Federal Agricultural Mortgage Corporation (Farmer Mac) is a secondary market for agricultural mortgages. It purchases loans from originating 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 whom are nominated by the President and confirmed by the Senate. The Senate has confirmed one board member during the Biden Administration: Chester John Culver in May 2022. No nominations are pending. The President designated an existing Democratic appointee, Lowell Junkins, as chairman in March 2022. Congressional oversight is provided by the House and Senate Agriculture Committees, which have primary jurisdiction for the Farmer Mac statutes. Farmner 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 sell them to investors as securities or hold them in its own portfolio. It provides risk management tools to originating lenders that let them make 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 from the FCS. Each has no liability for any of the others' debt. Administratively, Farmer Mac and the FCS have the same federal regulator-the Farm Credit Administration (see CRS In Focus IF10767, Farm Credit Administration and Its Board Members). 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 of Agriculture (USDA). Farmer Mac operates in four primary lines of business: farm and ranch, USDA guarantees, rural utilities, and institutional credit. In the farm and ranch business line, most activity is from Farmer Mac purchasing and retaining eligible agricultural mortgage loans. In that line of business, Farmer Mac also guarantees securities held by third parties Updated September 29, 2022 that are backed by eligible loans and promises to buy specific agricultural mortgages under future adverse conditions by selling long-term standby purchase commitments to financial institutions. 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 risk but carrying no default risk. The rural utilities business line involves mostly loans to rural electric 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 June 30, 2022, Farmer Mac's total business volume (similar to assets) was $24.5 billion, up 3.7% in six months since the end of 2021. The largest share of Farmer Mac's business is farm and ranch loans, followed by rural utilities, corporate agricultural finance, and renewable energy. Its core earnings (that exclude the effects of valuation fluctuations and infrequent or unusual transactions) was $57 million for the first six months of 2022, which is comparable to $56 million for the same period in 2021. 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 Confirmed by the Senate For the five presidentially appointed and Senate-confirmed members (Table 1), statute does not specify a term length but says that such board members serve at the pleasure of the President. The President names one of the appointees to be chair of the board (12 U.S.C. §2279aa-2 (a).

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Already a HeinOnline Subscriber?

Log In

profiles profiles most