Regulatory burden in agriculture financing is increasing – and so are its impacts on High Plains Farm Credit.

Learn more about how our association is committed to reducing regulatory burden and costs. It’s time for the latest edition of President’s Insights with HPFC President and CEO, Kevin Swayne.

The Farm Credit Administration (FCA) is an independent federal agency responsible for regulating and examining the Farm Credit System (System). Its mission is to ensure that these institutions are safe, sound, and dependable sources of credit and related services for agriculture and rural America. Additionally, the FCA provides oversight to maintain the financial health and operational integrity of the institutions it regulates.

We are fortunate to have a regulator that understands agricultural lending. While we believe FCA works hard to fulfill its mandate without disrupting Farm Credit’s mission, System institutions collaborate and work hard to maintain balance. Such efforts are constant and will continue.

One of the recurring questions from our stockholders is the excessive number of mailers they receive during elections and the distribution of our annual report. Current FCA regulations mandate that each stockholder receives a copy of these materials. These regulations, while ensuring transparency, result in higher printing and postage costs due to the need for multiple copies of reports and mailers being sent to the same address.

To address this issue, HPFC has proposed that the FCA regulations be reviewed to allow for one copy of materials to be delivered per address, rather than per stockholder. Additionally, the FCA should consider allowing institutions to notify stockholders of the availability of the annual report online, rather than mailing physical copies. Allowing electronic communications and a single copy per address could substantially reduce these costs.

Another area of concern is the storage of undeliverable, late, and invalid ballots. FCA Regulations mandate the retention of ballots that have no bearing on our election results for extended periods of time, which is both costly and burdensome.

HPFC has recommended that the FCA consider setting a limit on how long tabulators should retain late ballots (e.g., 30 days after the close of an election, rather than the 4 years that is currently mandated). This change would reduce storage costs and administrative burdens without compromising the integrity of the election process.

The Consumer Financial Protection Bureau (CFPB) has implemented stringent reporting requirements for financial institutions, including Farm Credit Institutions. You read that right, another regulatory agency has decided to add to our regulatory burden.

The CFPB requirements are designed to ensure transparency and protect consumers. Institutions must collect and report detailed data on small business lending, which involves significant technological updates to track new data, and requires more time and resources.

This is a significant investment for HPFC and our stockholders. HPFC leadership believes the current administration’s focus on deregulation will benefit the System and all Americans. Like you, we are anxious to see how that philosophy affects CFPB guidance.

The regulatory burden on financial institutions, including High Plains Farm Credit, is substantial and growing. By revisiting and updating certain regulations, we can reduce costs and improve efficiency while maintaining compliance and transparency.

Our board of directors has engaged with FCA to consider the changes noted above which will alleviate the regulatory burden on our institution and better serve our stockholders.

We are committed to reducing regulatory burden and costs.

– Kevin