We will probably just have to agree to disagree when it comes to the Farm Credit System. I was a director on our local association for six years till I chose to not run for reelection to pursue other interests. All the money that comes through the Farm Credit system comes from bond sales via investors. None of it comes from the government. The FCS ran on very thin capital margins in the 80's. Capital margins are much greater today. Lending was more asset balance sheet based then rather than cash flow and basically the FCS got into the same situation the housing bubble just went through. Too much easy credit for too long and too little capital to back it up when things went south.

I really think the FCS would be better off to take the system private and drop the GSE status, but that is another discussion. The main benefits they gain from the GSE is the implied government backing (which became explicit with Freddie and Fannie) which might gain them a half percentage point advantage in their bond sales. The conventional banking system hates them with a passion as evident by the ABA propaganda to their members and the lobby effort it supports against it. What the FCS does not have is deposit money that is currently at very low interest rates being paid to depositors. Occasionally local banks can blow FCS out of the water on a loan if they want to if they happen to have excessive deposits they have no loan demand for. I got to see the competitive numbers when we could collect them from customers, so I know. All the money for the FCS has to come from bond sales on the open market.

I rather like credit union type institutions where the customers are the owners. If they have good boards so they end up being run responsibly by hiring good management, the profits go back to the owners which are the members rather than the owners of the bank in the case of a private or public owned bank. I have been very happy with our local Farm Credit bank, both from my perspective as a board member concerning management and capital levels (our capital levels were significantly better than what I see in local banks), not to mention the significant sum I get from profits returned each year as patronage. 

I can see where regular banks would hate credit unions or the Farm Credit System. I probably would too if I owned a bank. I do think the FCS should be taken private though. I am all for less government rather than more. Then you really would hate them. LOL

John