Farmer Mac is warning that its regulator wants the government-sponsored enterprise to get a credit rating, which it says could "diminish" the company's standby commitment business.The Farm Credit Administration is expected to publish a proposed rule in a few days that would establish new capital requirements on Farm Credit Banks that have standby commitments, or swaps, with Farmer Mac, the company disclosed in its second-quarter earnings release. Under a worst-case scenario, $2.8 billion in swaps would likely be terminated if Farmer Mac does not qualify for a triple-A or a double-A rating. Henry Edelman, Farmer Mac's president and chief executive, said that outcome is unlikely if "FCA listens to reason and puts out a more reasonable regulation." He contends that the credit rating requirement is unnecessary because of the company's GSE status and its financial strength. He also said he expects the Farm Credit Banks to oppose the regulation. Farmer Mac's common stock fell $4.16, to $18.59, on Thursday's report. Farmer Mac also reported that its core earnings rose 6%, to $6.2 million, in the second quarter from those of a year earlier. However, earnings fell 76%, to $2 million, under generally accepted accounting principles.
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According to the Federal Reserve Board's latest financial stability report, persistent inflation and policy uncertainty are the primary worries for banks. Survey respondents expressed heightened anxiety over murky policy outlooks due to geopolitical turmoil and rapidly approaching domestic elections.
April 19 -
Leaders of ORNL Federal Credit Union are piloting Zest AI's new artificial intelligence-powered assistant to ensure equitable underwriting practices and measure performance against similar institutions.
April 19 -
McCargo stabilized the agency at a crucial time as she helped navigate it through both a pandemic and subsequent dramatic interest-rate cycle change.
April 19 -
The quasi-public entity's plan to buy certain closed-end seconds would constitute "unnecessary government encroachment," the Structured Finance Association said.
April 19 -
The mortgage subsidiary of Hilltop Holdings posted another quarterly loss and volume slipped, but management also sees signs of optimism.
April 19 -
The increasing frequency and severity of droughts was top of mind for panelists at AmeriCatalyst's "Going to Extremes" conference Thursday.
April 18