June 20, 2014
Mr. Barry F. Mardock
Office of Regulatory Policy
Farm Credit Administration
1501 Farm Credit Drive
McLean, VA 22102-5090
Dear Mr. Mardock:
Thank you for the opportunity to comment on FCA's recent proposed rule regarding Standards of Conduct. As a director of Farm Credit Services of America, I am personally committed to maintaining high standards of conduct, and I know my association is as well. It would appear that the Agency has designed this regulation with the goal of discouraging active farmers from running for the board of a Farm Credit institution. That just makes no sense and it needs to be fixed.
As a director, I find the transaction disclosure requirements in the Conflicts of Interest section of the proposed rule to be unduly burdensome, unnecessary and inappropriate. Our board has delegated to management specific loan making authority, and we do not have any role in approving individual loans or the terms of loans. It is unreasonable for me to be put in a position of having to know whether I am doing business with an association customer or not.
I routinely have business transactions with a wide variety of individuals, some of whom might be association customers. Even in instances when I know I’m dealing with an association customer, there is no conflict of interest since I have no role in making individual loan decisions.
The proposed disclosure requirements would require me to report and obtain pre-approval of transactions within my farming operation. This is an unrealistic burden to place on directors with no corresponding benefit. What happens when those I do business with become aware of these reporting requirements? Aren’t they going to be concerned about the confidentiality of their business dealings with me?
I urge the FCA to revise substantially the proposed rule or consider withdrawing it. As drafted it is counterproductive, creating inappropriate, unreasonable standards that are inconsistent with modern farming operations. Thank you for your consideration.
2023 550th Street
Newell, IA 50568