BankWise December 13, 2018
“It’s a good bill that accomplishes what we set out to do: provide certainty and predictability for farmers and families in rural communities.”
Senate Agriculture Committee Chairman Pat Roberts, R-Kan., before the Senate passed the farm bill on Dec. 11. The Senate vote for the bill was 87-13. The bill, which largely continues current farm and nutrition policy, passed in the House by a comfortable 369-47 margin yesterday. President Trump is expected to sign it next week.
What does the farm bill mean for community banks’ borrowers?
Read an in-depth breakdown from Kent Thiesse, Farm Management Analyst and Senior Vice President, MinnStar Bank, Lake Crystal.
ICBM has submitted its comment letter urging the Federal Reserve Board to support access to faster payments for community banks of all sizes. The deadline for comment is tomorrow.
ICBM encourages Minnesota community banks to use our comment letter as a starting place so that you can craft your own narrative. “The Fed will be most influenced by firsthand accounts from community banks about the ways faster payments will affect them,” said Jim Amundson, ICBM President and CEO.
Read and download ICBM’s comment letter.
De novo activity has been downright anemic since the financial crisis. For more than two decades prior to the Great Recession, approximately 100 banks were formed each year. But since 2009, that per-year average has dropped to fewer than two.
Now along comes Jelena McWilliams, new FDIC chair, who believes so heartily in the importance of start-up banks to a healthy industry, she’s willing to overhaul the process organizers need to take to get there. Her optimism appears to be contagious. At one industry meeting in Mankato last month, an FDIC official reported the agency has approved nine deposit insurance applications and was in the process of considering another 12 — not exactly a flurry but a notable shift nonetheless.
“The FDIC needs to do its part” to encourage the formation of new banks, McWilliams told the American Banker. Just last week, the FDIC announced roll-out of an improved application process that allows organizers to submit their proposals in draft form to give the FDIC a chance to review them, spot potential problems, and work with organizers to fine-tune plans before they submit their final application. It’s hands-on guidance that might be a consequence of recent application withdrawals by a number of fintech firms that didn’t meet FDIC criteria.
While the economy certainly factors into the recent spate of de novo activity, having a champion of bank start-ups at the head of the FDIC cannot be discounted. If you have thoughts on the application process for new bank charters, the FDIC wants to hear from you. You can track FDIC application activity on the “Transparency & Accountability” page at the FDIC website.
While we’re still more than a month away from the release of the Iowa Farm Custom Rate Survey, the widely-accepted source farmers use to set their custom rates, the time for figuring rates for work done in 2018 is upon us. Looking at past rates for custom farming practices, the trend shows rates have held steady or declined only slightly, even though fuel costs have ticked higher.
Refer to the 2018 Custom Rate Survey for a refresher on suggested fees for specific services. The University of Minnesota, meanwhile, offers good resources on the cost of operating farm machinery for those in need of figuring the hard costs that factor into setting custom rates.
Also, due to low commodity prices this year, a good deal of grain is being stored on the farm. A friendly reminder to farmers about the importance of checking on-farm storage to ensure bin temperatures remain stable might be well-advised. Grain spoilage is no way to end (or start) the year.