TeachMeFinance.com - explain Farm Credit Act of 1971
Farm Credit Act of 1971 The term 'Farm Credit Act of 1971' as it applies to the area of agriculture can be defined as 'P.L. 92-181 (December 10, 1971) recodified all previous acts governing the Farm Credit System (FCS, or System), a cooperatively owned government sponsored enterprise that provides credit primarily to farmers and ranchers. The Act eliminated earlier provisions relating to government capitalization of the System, and expanded the lending authorities of many System institutions. The Act, as amended, currently serves as the authorizing statute for the Farm Credit System. Major legislation that has modified the 1971 Act in recent years include: Agricultural Credit Act of 1987 (P.L. 100-233, January 6, 1988) authorized up to $4 billion in federal financial assistance to FCS institutions to assist in their recovery from the agricultural credit crisis of the 1980s. The Act created a System entity to issue up to $4 billion in federally guaranteed bonds, required the U.S. Treasury to pay a portion of the interest on these bonds, and also required the FCS to ultimately repay the Treasury for this assistance. The Act also mandated the merger of certain System banks within each farm credit district and expanded other merger authorities, and gave delinquent FCS borrowers certain rights. A separate System institution was established by the Act to insure the timely repayment of principal and interest on consolidated Systemwide debt issues. Farm Credit Banks and Associations Safety and Soundness Act of 1992 (P.L. 102-552, October 28, 1992) was designed to enhance the financial safety and soundness of FCS banks and associations by establishing new mechanisms to ensure repayment of Farm Credit System debt resulting from federal financial assistance provided to the System under the 1987 Act. The Farm Credit System Reform Act of 1996 (P.L. 104-105, February 10, 1996) includes numerous provisions that provide regulatory relief for the FCS'.
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