.png)
Posted October 25, 2013
The Independent Community Bankers of America (ICBA)
expressed concern that Farm Credit System (FCS) lender CoBank, a $90 billion
bank for cooperatives, was significantly involved in a $12 billion loan to
Verizon Communications, according to an ICBA news release available here.
The loan from CoBank allowed Verizon Wireless to
purchase Vodafone’s stake in the company.
ICBA wrote a letter to the Farm Credit Administration (FCA), FCS’s
regulator, highlighting the fact that Verizon and Vodafone are multinational
telecommunications firms, not candidates for tax-advantaged financing from a
government-sponsored enterprise (GSE) which provides credit and other services
to agricultural producers and cooperatives.
Camden R. Fine, IBCA President and CEO, said “On its
face, CoBank’s involvement appears to be an effort to leverage their GSE status
deeply into the realm of multi-national, non-agricultural, non-rural and
non-cooperative corporate financial deals.
This is not the purpose for which Cobank was created as part of Farm
Credit System.” Fine continued, “This is
clearly a breach of FCS lending authority and a misuse of taxpayer-backed GSE’s
implicit subsidies.”
In response, CoBank sent a statement to the Denver
Business Journal, available here. CoBank
said, “As part of CoBank’s mission to support infrastructure in rural
communities we provide credit to a wide variety of rural communications
companies, including voice, internet, cable, wireless and data service
providers. Our borrowers include small,
medium and large-sized businesses. The
communications landscape continues to evolve rapidly, and there is a great deal
of interdependence among companies to deliver modern communications services to
rural communities.”
Farm Credit System (FCS) is a network of
federally-chartered, privately-owned banks and associations that provide short-term
and long-term loans to eligible agricultural producers and their
cooperatives. The FCS is organized as a
cooperative and is supervised and regulated by the Farm Credit Administration
(FCA). The FCA is not an agency within
USDA, but rather an agency within the executive branch of the federal government.
For more information on the FCS, FCA, or agricultural
finance and credit, please visit the National Agricultural Law Center’s website
here.
