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• The profits it generates from its real estate<br />
lending activities are exempt from all corporate<br />
income taxes<br />
• Profits from its non-real-estate lending<br />
activities are generally exempt from state and<br />
local income taxes<br />
• Many states have exempted the FCS from lien<br />
recordation fees and other fees and charges<br />
associated with lending<br />
• Combined, the FCS conservatively enjoyed a<br />
$2.3 billion taxpayer subsidy in 20<strong>14</strong> – a $1.07<br />
billion interest subsidy (based on average debt<br />
outstanding during 20<strong>14</strong> of $2<strong>14</strong> billion) plus a<br />
$1.2 billion income-tax subsidy<br />
• As a GSE, the FCS can borrow at very<br />
favorable interest rates – slightly higher than<br />
rates at which the U.S. Treasury borrows and at<br />
rates lower than what AAA-rated corporations<br />
can borrow<br />
The FCS is expanding its reach in Colorado –<br />
at your expense.<br />
• Total FCS lending in Colorado has grown in<br />
recent years, from $3.61 billion December 31,<br />
2012, to $3.92 billion at the end of 2013, and to<br />
$4.89 billion at the end of 20<strong>14</strong><br />
1.88% at the end of 2012, to 1.95% at the end of<br />
2013, and to 2.25% at December 31, 20<strong>14</strong><br />
• Even after adding in agricultural lending<br />
in Colorado by banks headquartered outside<br />
the state, the FCS clearly is the largest single<br />
agricultural lender in Colorado and most likely<br />
provides over half the agricultural credit for<br />
Colorado farmers and ranchers<br />
The FCS plays by its own rules – and there are<br />
far fewer of them.<br />
• FCS is exempt from the Dodd-Frank Act and<br />
the Community Reinvestment Act<br />
• FCS is exempt from laws governing the<br />
issuance of debt securities<br />
• FCS’ regulator, the Farm Credit<br />
Administration (FCA) is not enforcing<br />
congressionally imposed limitations on who the<br />
FCS can lend to and for what purpose<br />
• FCA sees its mission as being supportive of<br />
the FCS - It is not unfair to characterize the<br />
FCA as a “captured regulator,” in part because<br />
over time many of the members of its board of<br />
directors have come from FCS institutions<br />
• FCS lending in Colorado, as a portion of total<br />
FCS lending, has grown in recent years, from<br />
QUESTIONS? PLEASE CONTACT US TODAY.<br />
Colorado Bankers Association<br />
One Sherman Place, <strong>14</strong>0 East 19th Avenue, Suite 400, Denver, CO 80203<br />
P 303.825.1575 | info@coloradobankers.org