Farm Credit System Tweaks How It Splits Admin Costs Fairly
Published Date: 4/23/2026
Proposed Rule
Summary
The Farm Credit Administration wants to update how it splits administrative costs among its banks and associations to make things fairer based on their size and setup today. These changes only affect certain Farm Credit System banks and associations, not others, and won’t change the overall budget or expenses. If you have thoughts, you’ve got until June 22, 2026, to share them!
Analyzed Economic Effects
5 provisions identified: 0 benefits, 0 costs, 5 mixed.
Assessment Formula: 75% Pro Rata Shift
If you are a Farm Credit System bank or association, the rule would change the assessment formula so 75 percent (up from 30 percent) of each institution's assessment is based on its pro rata share of total average risk-weighted assets, and 25 percent (down from 70 percent) is based on a declining-tier formula. The rule also updates the asset-size tiers (for example, the lowest tier goes from $0–$25 million to $0–$900 million and the top tier is $120,000 million+).
Who Mostly Pays More or Less
Based on average risk-weighted assets as of June 30, 2025, the FCA expects most System institutions would see lower assessments compared to fiscal year 2026, but institutions reporting more than $25 billion in average risk-weighted assets as of June 30, 2025 would see increases. The document reports that 13 institutions held 81.7% of assets but were assessed only 68.6% under the old formula, and the proposed changes move proportionality closer to 1993 levels.
System Total Budget Remains Unchanged
The proposed rule reapportions assessments among System banks and associations but does not change FCA's annual administrative expenses or the total assessment to the Farm Credit System. The total assessment is still based on FCA's annual administrative budget (the proposal does not change that total).
FIRS Risk Premium Kept and Kept Confidential
The FCA will retain a risk premium based on the composite FIRS (Financial Institution Rating System) rating in the assessment formula and will preserve confidentiality of the composite FIRS rating. FCA considered a 100 percent pro rata approach but rejected it because it could reveal adverse composite FIRS ratings and would not preserve economies of scale.
Scope: Only Affects System Banks and Associations
The proposed amendments would apply only to Farm Credit System banks and associations and would not affect the FCA's assessment of other System or non-System entities described in Part 607. The proposal also amends example calculations and tier tables in §607.3 to reflect the changes.
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Key Dates
Department and Agencies
Related Federal Register Documents
2026-04067 — Sunshine Act Meetings
The Farm Credit Administration is holding a public meeting on March 12, 2026, where they’ll review land values and discuss new rules about how administrative costs are shared. Anyone interested can join in person or online by registering a day ahead. This update affects farmers and lenders by potentially changing fees and how expenses are split, with no immediate cost changes announced.
2026-03923 — Permanent Capital Revisions
The Farm Credit Administration wants to make it easier for Farm Credit System banks and associations to figure out and report their permanent capital. They’re proposing to simplify the math, clear up confusing rules, and remove some outdated reporting requirements. If you’re involved with these banks, you can share your thoughts by April 28, 2026, before the changes take effect.
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