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