Mr. Gary K. Van Meter

Deputy Director

Office of Regulatory Policy

Farm Credit Administration

1501 Farm Credit Drive

McLean, Virginia 22102-5090

Re:       FCA Processing and Marketing Proposed Rule

We are writing on behalf of community bankers across the state of Texas.  The Independent Bankers Association of Texas has many members involved in agricultural and small business loans. 

Our bankers have many concerns and questions about FCA's proposal to expand loans to businesses engaged in processing and marketing loans.  The proposal appears to use very subjective criteria in order to qualify as many commercial businesses as possible for FCS loans and would be a huge and dramatic departure from current authorities.  Many banks question the need for this proposal as there is an abundance of capital in the marketplace and there are extremely strong competitive pressures as numerous banks and other lending institutions are already seeking to make these loans.  This proposal appears to be "wants-based" instead of "needs-based".  What specific need has the FCA established for this proposal other than reflecting that the FCS lenders want to make loans to any commercial business? 

It is also troubling that the proposal is so perplexing.  It seems to open up many, many ways that a business can become eligible for FCS financing even if it is only tangentially related to bona-fide farmers.  We also question the legality of the proposal as the statute clearly expresses that such loans should be made to bona-fide farmers and ranchers. 

The current regulation is fairly straight forward.  But the proposed rule is a enormous departure from current practices and seems to contradict sharply the positions that the FCA has taken in the past on many fronts.  The proposal raises so many questions that we find it necessary to request an extension of the proposed rule.  With more time, we would be able to properly answer the questions that bankers are raising and express our opinions and share our specific recommendations to FCA as part of the public comment period.  We believe that more than a token comment period is necessary, especially to get us past the Holidays and the new year.

Therefore we request that FCA extend the comment period by at least ninety days.  Alternatively, FCA could withdraw the proposal altogether and seek further input from the industry, but at the very least, we need a ninety day or longer comment period.  Thank you for your attention to our request and we look forward to providing more input to the FCA after the conclusion of the extended comment period. 

Cordially, 

Christopher L. Williston, CAE

President and CEO