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Return to Comments
2022 Regulatory Burden Notice with Request for Comment
Type: Regulation
Federal Register Document Type: Notice
In support of section 212(b) of the Farm Credit System Reform Act of 1996 and FCA’s Policy Statement on Regulatory Philosophy, would address comments received concerning the removal or revision of outdated, unnecessary, or burdensome regulations.

Text of Comment Letter

Re: Notice of Intent; Request for Comment on the topic of regulatory burden dated July 20, 2022

Dear Ms. Agans:

As the Board of Directors of Idaho AgCredit we appreciate the opportunity to comment on the regulatory

burden that the Farm Credit Administration imposes on our small Association. Below you will find bullet points

that we would like you to consider as you strive to provide regulatory relief so that more of our resources can be

used to serve the farmers and ranchers in our territory rather than meeting regulation that is not consistent

with our size, complexity and risk to the Farm Credit system.

Audit planning, audit depth and an extensive risk assessment exhaust significant resources at our

Association, District Bank and FCA. Imposing a one size fits all Audit expectation uses substantial

resources that is unnecessary. Proportionate focus for audit activities should be applied.

Standard Exam and Horizontal Exams exhaust our staff members with the lengthy time commitment and

depth of the review. Exam scope based on size, complexity and historical exams should be applied.

Horizontal exams should be integrated into the standard exam.

Exam manual is too extensive for a small institution with very little discretion allowed by supervisors of

the exam teams.

The recent approach FCA has conducted on Enterprise Risk Management, Model Risk Management, etc.

are examples of regulatory burden on a small Association. Very little of the content of the exam manual

in these areas allows for considerations to be made for a small institution.

The current proposal on YBS oversight is full of regulatory burden. A rating system would be


Our Board meetings have become so full of regulatory review and checking boxes for FCA examiner’s

“best business practices” that we have to extend meetings to assist with the actual business part of our

Association. We recommend a limited hands on approach for low risk institutions.

FCA examiners have been highly critical of our top ten loans based on a percentage rather than being

willing to look at actual credit quality and associated risk in those top ten loans as the exam manual

directs. The FCA examiners stance of selling and purchasing loans to keep the top ten percentage down

is not necessarily always a good business practice and frequently adds risk to our portfolio. Additional

risks are associated with participations purchased along with increased expenses to service these loans.

Many considerations have not been, but should be, applied in the oversight of our top ten portfolio. This

has been regulatory burden for some time and has impacted the net income and capital retention for

our small association.

We believe there is regulatory burden in the System as it relates to FCA’s examination of the Farm Credit

Funding Corp and the District Bank that trickles down to our Association. Many inefficiencies exist that

need to be addressed so that so many resources are not used up resulting in higher allocation of FCA

expenses to our institution along with the expense of oversight affecting all of us.

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During the past several years we have seen an increase in the amount of time our staff has spent

meeting the demands of the Agency while at the same time our institution has been managed well and

successful. Our institution provides a limited amount of risk to the Farm Credit System. Please help the

FCA staff understand the Farm Credit mission and how they play a role in helping a small institution

provide efficient and quality services to its shareholders. Regulatory burden exists at our Association and

may jeopardize its long-term viability due to the taxing imposition it has on our human capital resources.

We are grateful for the recent attention that FCA has given the items outlined by the Small Association Group.

Thanks again for this opportunity to provide input.