[Federal Register Volume 71, Number 133 (Wednesday, July 12, 2006)]
[Proposed Rules]
[Page 39235]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-10940]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 71, No. 133 / Wednesday, July 12, 2006 / 
Proposed Rules  

[[Page 39235]]



FARM CREDIT ADMINISTRATION

12 CFR Part 615

RIN 3052-AC23


Funding and Fiscal Affairs, Loan Policies and Operations, and 
Funding Operations; Investments in Farmers' Notes

AGENCY: Farm Credit Administration.

ACTION: Proposed rule; withdrawal.

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SUMMARY: The Farm Credit Administration (FCA or Agency) withdraws its 
proposed rule to amend regulations governing investments in farmers' 
notes (Farmers' Notes), and terminates this rulemaking. This notice 
informs the public that this rulemaking has ended.

FOR FURTHER INFORMATION CONTACT: 

Dawn Johnson, Policy Analyst, Office of Regulatory Policy, Farm Credit 
Administration, Aurora, CO (303) 696-9737, TTY (303) 696-9259.
     or
Richard A. Katz, Senior Counsel, Office of General Counsel, Farm Credit 
Administration, McLean, VA 22102-5090, (703) 883-4020, TTY (703) 883-
4020.

SUPPLEMENTARY INFORMATION: The FCA terminates this rulemaking by 
withdrawing its proposed rule to amend the Farmers' Notes regulation. 
This rulemaking began on April 20, 2000 (65 FR 21151), when the FCA 
published an advance notice of proposed rulemaking that asked the 
public questions about ways to improve the funding and discount 
relationship between Farm Credit banks and other financing institutions 
(OFIs).\1\ In addition to recommendations for improving the OFI 
program, some commenters suggested that the FCA also explore other ways 
for the Farm Credit System (System or FCS) to provide funding and 
liquidity to non-System agricultural lenders. In response to these 
comments, the FCA held a public meeting in Des Moines, Iowa on August 
3, 2001, that addressed both OFIs and ``other types of partnering 
relationships between System and non-System lending institutions that 
would increase the availability of funds to agriculture and rural 
America.'' \2\ At the public meeting, System and non-System commenters 
encouraged the FCA to promote other arrangements, in addition to the 
OFI program, that would make it easier for the FCS to provide funding 
and liquidity to non-System agricultural lenders. Many commenters 
expressed their desire for more flexible and informal arrangements 
between FCS and non-System agricultural lenders.
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    \1\ See 65 FR 21151 (April 20, 2000).
    \2\ See 66 FR 35428 (July 5, 2001).
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    On August 11, 2003, the FCA adopted a proposed rule (original 
proposed rule) on OFIs and Farmers' Notes.\3\ The FCA received 105 
comment letters from both System and non-System lenders that 
specifically addressed Farmers' Notes. All 98 non-System commenters 
opposed the original proposed rule primarily because they believed that 
it would give System associations a competitive advantage over 
commercial banks. Seven System commenters expressed the view that 
revising the Farmers' Note program could strengthen cooperation between 
the FCS and non-System lenders and increase the flow of credit to 
agriculture. However, many FCS commenters sought significant changes to 
the proposal.
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    \3\ See 68 FR 47502 (August 11, 2003).
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    Based on these comments, the FCA adopted a final rule on OFIs, but 
reproposed the Farmers' Notes rule.\4\ The second proposed rule 
(reproposed rule) that the FCA issued on September 14, 2004, sought to 
address the concerns of both System and non-System commenters.\5\ The 
FCA received 776 comment letters in response to the reproposed rule. 
Six FCS commenters told the FCA that the reproposed rule would dissuade 
System associations from investing in Farmers' Notes because it was too 
restrictive. The remaining 770 comment letters came from commercial 
bankers or their trade associations who opposed the reproposed rule for 
the same reasons that they opposed the original proposed rule.
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    \4\ See 69 FR 29852 (May 26, 2004).
    \5\ See 69 FR 55362 (September 14, 2004).
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    These comment letters lead the FCA to conclude that enacting a 
final rule on Farmers' Notes is unlikely to achieve the Agency's 
objectives of increasing cooperation between System and non-System 
lenders so more credit is available for agriculture and rural America. 
For this reason, the FCA withdraws the proposed rule and terminates 
this rulemaking.

    Dated: July 6, 2006.
Roland E. Smith,
Secretary, Farm Credit Administration Board.
[FR Doc. E6-10940 Filed 7-11-06; 8:45 am]
BILLING CODE 6705-01-P