Washington, Thursday, July 26, 2007

Floor Speech

WASHINGTON, THURSDAY, JULY 26, 2007 -- (House of Representatives - July 26, 2007)

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Mr. GILLMOR. Madam Chairman, I rise today in strong support of the Frank-Bachus amendment to H.R. 2419. This vast expansion of the Farm Credit System is unnecessary and unwise. American businesses today enjoy the best financial services marketplace in the world. There are opportunities for credit at every turn. The current Farm Credit System was set up in a different era to offer all the products and services of a financial institution to farmers and farm-related small businesses.

A government sponsored enterprise for over 90 years, the Farm Credit System remains the only GSE with direct lending authority. In towns of 2,500 people or less, this system is able to compete directly with other lenders, but with major advantages given to them by their government-sponsored status. The historical justification for this special GSE status has been to focus the system on farmers and companies that provide farm related services. The expansion which the Farm Bill currently seeks would dramatically alter the mission of the Farm Credit System and detract from its mission of helping farmers. There is no need for the expansion of this government entity and there is no vacuum to be filled.

Regardless of whether or not you disagree with the policy of the expansion of the Farm Credit System, you can disagree with the process used here to legislate. In a July letter to the Speaker, the Chairman and Ranking Member of the Financial Services Committee asked for a sequential referral, yet were denied. While the Committee on Agriculture clearly has jurisdiction over the Farm Credit System, the Committee on Financial Services has jurisdiction over all extensions of credit and a referral was justified.

In a recent letter written by the former regulator of the Farm Credit System, Michael Reyna, we see an objective analysis of this expansion. As Mr. Reyna mentions, the Farm Credit System is seeking an expansion of their powers to move beyond their historical focus. ``Therein lies its primary flaw--the System's efforts are more about the System's growth and profitability rather than the credit needs of agriculture and rural America. When it comes to commercial agriculture, competition among lenders is healthy and credit is available and affordable.''

Let's not fix what isn't broken. Let's keep our government-sponsored lending operations tied to their original purpose and let's support the Frank-Bachus amendment.

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