Farm Credit Bureaucracy Gets a Mild Trim
Published Date: 2/27/2026
Proposed Rule
Summary
The Farm Credit Administration wants to make it easier for Farm Credit System banks and associations to figure out their permanent capital by simplifying the rules and cutting confusing parts. They’re asking for comments by April 28, 2026, before making these changes official. This update helps these institutions stay safe and sound without extra hassle or cost.
Analyzed Economic Effects
8 provisions identified: 6 benefits, 0 costs, 2 mixed.
Permanent Capital Disclosure Removed
The rule would remove the requirement that Farm Credit System banks and associations disclose their permanent capital ratios in annual reports to shareholders and in the System annual report to investors. FCA would still require permanent capital reporting in a call report schedule that is not publicly available.
Permanent Capital Calculation Simplified
The rule would simplify how Farm Credit System institutions calculate the permanent capital ratio by making its denominator the same as the total capital ratio denominator in part 628. The permanent capital numerator would not change; the 7.0 percent minimum permanent capital requirement would remain.
Conservatorship Trigger Uses Total/Tier 1 Capital
FCA proposes to revise Sec. 627.3(b)(3)(ii) so that an unsafe or unsound condition may be defined by an institution having a total capital ratio less than the minimum in Sec. 628.10(b)(3) or a tier 1 leverage ratio less than the minimum in Sec. 628.10(b)(4), replacing the prior reference to permanent capital being less than one-half the minimum required level.
Replace Permanent Capital References With Tier 1/2
The rule would replace references to 'permanent capital' in multiple FCA regulations (parts 611, 614, 615 (other than subpart H), and 627) with references to tier 1/tier 2 or total capital measures in part 628 where appropriate.
Exit Fee Calculations Refer to Total Capital
FCA proposes to amend the preliminary exit fee estimate and final exit fee calculation rules (Sec. 611.1250 and 611.1255) to remove references to permanent capital (subpart H of part 615) and instead reference capital under part 628. FCA would also remove obsolete references to subpart K collateral requirements.
Lending Limit Violation Rule Uses Total Capital
The rule would change Sec. 614.4360(b)(1) so that a loan that exceeds lending and leasing limits because of a decline in capital is judged against total capital (part 628) rather than permanent capital.
Conditions for Retiring At-Risk Stock Clarified
FCA would remove the existing Sec. 615.5270(c)(3) condition that permitted delegating authority to retire at-risk stock if the permanent capital ratio would exceed 9.0 percent after retirement. Boards may still delegate retirement authority if, after retirement, the capital conservation buffer is above 2.5 percent, the leverage buffer is above 1.0 percent, and the institution complies with part 628 capital requirements.
Loss-Sharing Asset Counting Deleted
FCA would delete Sec. 615.5207(i), which prescribes how a System bank and an association must count assets in the permanent capital ratio denominator when they have a written loss sharing agreement; part 628 does not have a similar requirement.
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Key Dates
Department and Agencies
Related Federal Register Documents
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2026-07903, Assessment and Apportionment of Administrative Expenses
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2024-31573, Internal Control Over Financial Reporting
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2026-18073, Informational Meeting
Notice of the forthcoming Farm Credit Administration informational meeting is hereby given.
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