FCS Financial: One Hundred Years July 2016 | Page 77
It soon became apparent the Farm Credit System Capital
Corporation created by the 1985 act would not be sufficient in itself to
deal with the monumental problems facing many of the Farm Credit
Service’s borrowers and some form of direct federal assistance was
needed. The Agricultural Credit Act of 1987, signed into law on January 6,
infused up to $4 billion into the Farm Credit System. A new Financial
Assistance Corporation was formed to issue treasury-guaranteed fifteenyear bonds. The act also created the Farm Credit System Insurance
Corporation (FCSIC) to ensure timely payment of interest and principal
on system-wide and consolidated bonds and other obligations issued by
FCS banks. To create a more efficient and sustainable Farm Credit System,
the act mandated structural changes. The Federal Land Banks and Federal
Intermediate Credit Banks would now merge in each district to create a
district Farm Credit Bank. Production Credit Associations and Federal
Land Bank Associations within a given territory were also allowed to
merge into a new entity as an Agricultural Credit Association. Federal
Land Credit Associations (FLCAs) were established as direct lenders that
could make long-term mortgage loans.
Now that the associations could not only merge organizationally but
also legally merge and pool their financial resources, the Farm Credit
System in Missouri was organized into five territories: Northwest,
Northeast, East Central, Southwest, and still separate from the others was
Progressive Farm Credit Services servicing the Bootheel region of the
state. “As we went to ACA’s,” Daryl Oldvader explained, “we combined
staffs and offices.” “We sold a lot of bricks and mortar,” Jim Zerr, who
served on a district restructuring task force, recalled. “We started
cutting down on our loan offices and just made the whole business more
efficient.”
On a day they dubbed Black Friday, thirteen offices were closed in
the whole Northwest service center ACA. But even after the mergers,
there were branch offices remaining out in the countryside. A great deal
of marketplace analysis was done to minimize the impact and retain
the local familiarity with the customers. To minimize the impact to the
customers, a great deal of cross training had to be conducted. Employees
on the Production Credit side had to learn about mortgage lending and
employees who had been involved with mortgage lending had to learn
about commercial and short-term lending.
The Perfect Storm
73