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Farmer Mac Regulator Considering New Rules for GSE

Farmer Mac Regulator Considering New Rules for GSE

Farm Credit Agency looking at non-mission investments

May 28, 2003

By MortgageDaily.com staff

The agency that oversees Farmer Mac reported staff exploration into some new proposed rules for the government-sponsored enterprise (GSE).

Farmer, formally known as Federal Agricultural Mortgage Corporation, is regulated by the Farm Credit Administration (FCA), which also oversees farm credit system banks and associations.

FCA has begun considering whether to create proposed rules for Farmer regarding its liquidity and non-mission investments. Regulations concerning both are already in place for the banks and other associations.

According to Tom McKenzie, Director of the Office of Secondary Market Oversight, making decisions concerning liquidity and non-mission investments requires careful attention. He described it as “a delicate balancing at going on.”

Other GSEs, namely Fannie Mae and Freddie Mac, have faced criticism from groups and politicians for their liquidity levels and what detractors call “mission creep.”

According to officials at FCA, Farmer hasn’t really been targeted in that ongoing controversy, but they said the issue merits their consideration.

McKenzie said the agency hoped to have proposed rules crafted by this fall.

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