Skip to main content

Farm Credit System: Repayment of Federal Assistance and Competitive Position

GGD-94-39 Published: Mar 10, 1994. Publicly Released: Mar 10, 1994.
Jump To:
Skip to Highlights

Highlights

Pursuant to a legislative requirement, GAO provided information on the Farm Credit System's repayment of federal financial assistance, focusing on whether the: (1) system can and will repay the financial assistance; (2) system's status gives it an unfair competitive advantage over commercial banks; and (3) system's charter should be changed to permit diversification.

Recommendations

Matter for Congressional Consideration

Matter Status Comments
Congress should require that system institutions record all categories of assistance granted under the 1987 act using the generally accepted accounting principle that best reflects the economic substance of this federal aid.
Closed – Not Implemented
No action was taken in the 105th Congress.
Congress should provide the Farm Credit Administration (FCA) statutory authority to recognize all categories of 1987 act assistance as temporary, not permanent, capital of system banks for regulatory purposes.
Closed – Not Implemented
Per Farm Credit System Insurance Corporation officials, assistance provided to four System banks has been repaid ahead of schedule. The issue, therefore, is moot.
Congress should require FCSIC to reimburse the Treasury for its initial capital infusion of $260 million within a reasonable time, taking the financial condition of the system and the Insurance Fund into consideration.
Closed – Not Implemented
No action was taken in the 105th Congress.

Recommendations for Executive Action

Agency Affected Recommendation Status
Farm Credit Administration FCA should require the system to exclude the FCSIC Insurance Fund from its combined financial statements.
Closed – Not Implemented
The agency reached a compromise with the Farm Credit System on this matter. It does not intend to take further action.

Full Report

Office of Public Affairs

Topics

Accounting proceduresAgricultural policiesBank managementBanking regulationCapitalFarm creditFarm credit banksFinancial managementGovernment sponsored enterprisesLending institutions