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Return to Comments
Capital - Tier1/Tier 2 Regulatory Capital Framework Proposed Rule
Type: Regulation
Federal Register Document Type: Proposed
Request that Board approve a new part 628 to FCA's regulations and amend parts 607, 614, 615 and 620 to modify the regulatory capital requirements for System Banks and associations

Text of Comment Letter

January 2, 2015


Mr. Barry Mardock

Deputy Director, Office of Regulatory Policy

Farm Credit Administration

1501 Farm Credit Drive

McLean, VA 22101-5090


Dear Mr. Mardock:


I am writing concerning the Farm Credit Administration’s (FCA) proposed capital rule.  The FCA efforts to change the Farm Credit System (FCS) capital requirements will result in a framework that is consistent with Basel III standards applied to other financial institutions.  I believe that adopting Basel III standards for FCS will enhance investor understanding og FCS’s financial strength and increase marketability of third-party capital and debt securities, especially in periods of stess, thereby enabling the FCS to fulfill its mission.


I appreciate the FCA’s efforts to carefully consider and accommodate the FCS’s cooperative structure in developing the proposed capital framework.I am concerned that the proposed capital rule, as drafted, does not strike the appropriate balance between supporting and protecting the cooperative structure on which congress based the FCS and aligning with the Basel III concepts written for joint stock companies.  It appear to me that parts of the proposal may undermine the cooperative structure.  It is this cooperative structure that drew me to the FCA in the first place.  I now ask the FCA revise the proposed rule as outlined in letters from Capital Farm Credit and its members.  The refinements will ensure that FCS can function consistent with cooperative principles for the benefit of its members as Congress clearly intended.


Your time and attention on this matter is greatly appreciated.




WFS Sig 2.jpg


William F. Smith

P. O. Box 7444

Midland, Texas 79708


432/682-6991 fax