H.R. 5010: Farm Credit Adjustment Act

This bill, known as the Farm Credit Adjustment Act, proposes an amendment to the Farm Credit Act of 1971. This amendment gives the Farm Credit Administration (FCA) the option to conduct examinations of certain low-risk institutions within the Farm Credit System every 24 months instead of the current requirements for more frequent examinations.

Key Provisions

• The bill allows the FCA to exercise discretion in determining the frequency of mandatory examinations for low-risk institutions.
• Instead of inspections being conducted at least once a year, the FCA can extend the period to every two years for institutions classified as "low-risk."
• The bill specifies that this change would be effective starting on October 1, 2026.

Purpose of the Bill

The purpose of the Farm Credit Adjustment Act is to provide more flexibility to the FCA in regulating low-risk institutions. By allowing longer intervals between required examinations, it may reduce the regulatory burden on these institutions and potentially lower operational costs. This flexibility aims to streamline oversight for institutions that are deemed stable and low-risk.

Administrative Impact

The changes proposed in this bill would focus specifically on institutions within the Farm Credit System that meet the criteria for being classified as low-risk. It provides a more efficient regulatory approach targeted at institutions that pose minimal risk to the financial system, thus allowing regulatory resources to be allocated more effectively.

Implementation Date

The provisions set forth in this bill are intended to come into effect on October 1, 2026, giving the FCA time to adjust its regulatory frameworks accordingly.

Relevant Companies

• None found