This entry contains information applicable to United States law only. The Farm Credit Administration (FCA) is an independent agency of the executive branch of the federal government. It supervises and coordinates the Farm Credit System, which is a centralized banking system designed to serve U.S. agricultural interests by granting short- and long-term credit through regional banks and local associations. Although initially capitalized by the federal government, the banks and associations that make up the Farm Credit System are now financed entirely through stock that is owned by members, borrowers, or the associations. The FCA ensures the safe operation of these lending institutions and protects the interests of their borrowers.
The Farm Credit System was established in 1916 in response to the unique credit needs of farmers. Federal land banks were established to provide adequate and dependable credit to farmers, ranchers, producers or harvesters of aquatic products, providers of farm services, rural homeowners, and agricultural associations. During the 1930s, the Depression and falling farm prices increased debt delinquencies and led to a serious decline in farm values. Many loan companies and credit institutions failed. In 1933, President Franklin D. Roosevelt directed Congress to create the FCA to oversee the entities that grant credit to farmers and ranchers. All government farm credit programs, including the land banks and intermediate credit banks, were unified under the new agency, which was established by the Farm Credit Act of 1933 (U.S. Pub. Law 73-76, 48 Stat. 257).
The modern FCA derives its authority from the Farm Credit Act of 1971 (12 U.S.C.A. § 2241 et seq.), which superseded all prior authorizing legislation. The FCA examines the lending institutions that constitute the Farm Credit System to certify that they are sound. It also ensures compliance with the regulations under which the Farm Credit institutions operate. To that end, it is authorized to issue cease and desist orders, levy civil monetary penalties, remove officers and directors, and impose financial and operating reporting requirements. It may directly intervene in the management of an institution whose practices violate the Farm Credit Act or its regulations. It may also step in to correct an unsafe practice or to assume formal conservatorship over an institution.
The FCA is managed by the Farm Credit Administration Board, whose three full-time members are appointed to six-year terms by the president, with the advice and consent of the Senate. The board meets monthly to set policy objectives and approve the rules and regulations that govern the FCA's responsibilities.
See: agricultural law.
