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Return to Comments
Permanent Capital Revisions
Type: Regulation
Federal Register Document Type: Proposed
Description:
This proposed rulemaking would remove selected references to permanent capital and replece them with references to Tier 1/Tier 2 regulatory capital as appropriate. This would reduce regulatory burden that is associated with permanent capital on System institutions in terms of computational and shareholder reporting, and other applicable areas within the legal constraints of Section 301 of the Agricultural Credit Act of 1987.


Text of Comment Letter

Dear Farm Credit Administration,

I am writing to provide feedback on the proposed "Permanent Capital Revisions" rule. This proposal resonates with me deeply as I aim to increase ease of access to capital in my life for my community. These systems are essential for building wealth and creating financial systems that people can have faith in. 

I would like to specifically comment on section 4 where the calculation revises are laid out. I agree that simplifying the terminology would be a great help for institutions for compliance. Changing phrases such as "stock" to "equity" and delete "risk-adjusted asset base" and change it to total capital ratio denominator (specified in § 628.10(c)(3)). I would recommend also if possible to have these calculations laid out in easy to follow steps or a uniform spreadsheet that a company can use to comply with ease. This would promote consistency with reporting and reduce complexity. 

Another comment I would like to make is in regards to section 4 about the FSIC becoming a conservator or receiver to a failing institution. To what degree of control does FSIC have over the operations of an institution? Do you believe that the original operators should still have some control or opinion taken into consideration? I think the original operators should have some agency, but considering they are operating a leveraged failing company (as I am sure at a larger scale) it depends on what would happen if this business were to be gone. 

Overall, I believe the proposed revisions are a great addition and change to the regulations and aim to increase capital adequacy, regulatory efficiency, and enforcement procedures. While I am in favor of the language simplification, I am curious as to the decisions that will be made regarding the FSIC becoming a conservator or receiver. 

Sincerely,

Ryan Weinstock

Orange Coast College

Costa Mesa, California

Document Heading: 
Farm Credit Administration
  1. 12 CFR Parts 607, 611, 613, 614, 615, 620, 627, 628, and 630
  2. RIN 3052-AD52

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Sincerely,
Ryan Weinstock

 

Attachments: