Farm Credit Insurance Fund
Stored: Farm Credit Insurance Fund, Farm Credit Insurance Fund
| Type | Program |
|---|---|
| Sponsor Organization | Farm Credit System Insurance Corporation |
| Top Organization | Department of Agriculture |
| Creation Legislation | Agricultural Credit Act of 1987 |
| Website | Website |
| Purpose | To insure the timely payment of principal and interest on debt securities issued by Farm Credit System banks, thereby ensuring investor confidence and supporting agricultural finance. The Fund aims to maintain financial stability within the Farm Credit System. |
| Program Start | |
| Initial Funding | |
| Duration | |
| Historic | No |
Farm Credit Insurance Fund (FCIF) is maintained by the Farm Credit System Insurance Corporation (FCSIC) to safeguard investors in the Farm Credit System (FCS) by ensuring that the debt obligations issued by FCS banks are paid in a timely manner. Its purpose is to provide a safety net for the financial instruments supporting American agriculture, offering stability to the sector's financial ecosystem.
Goals
- To protect investors by ensuring the repayment of FCS debt securities.
- Maintain the Insurance Fund at or above the statutory "secure base amount" of 2% of adjusted insured obligations.
- To avoid any defaults on FCS bank obligations, thereby preserving the creditworthiness of the system.
Organization
The Fund is managed by the FCSIC, an independent government-controlled corporation. The board of FCSIC, which includes members from the Farm Credit Administration (FCA), oversees the operations of the Fund. Funding for the Insurance Fund comes from premiums collected from FCS banks and investment earnings on the Fund's assets, which are invested exclusively in U.S. Treasury securities.
Sponsor
- Federal Agency: Farm Credit System Insurance Corporation
Background and History
The Farm Credit Insurance Fund was established under the Agricultural Credit Act of 1987 to address financial instability in the Farm Credit System following the agricultural crisis of the 1980s. The legislation was a response to ensure the system could continue to provide credit to the agricultural sector without the risk of systemic failure. Over time, the management of the Fund has focused on maintaining the "secure base amount" to ensure ongoing capacity to cover potential losses. There are no plans for the program to end, as it's integral to the ongoing operations of the FCS.
Funding for the Fund began in 1988, with the initial seed capital from the U.S. Treasury. It has grown over the years through premiums and investment returns, currently standing at over $7.5 billion.
Implementation
The Farm Credit Insurance Fund operates by collecting annual premiums from FCS banks and ensuring these funds are managed prudently to meet insurance obligations. There is no defined end date for this program as it's designed to be a continuous safeguard for the Farm Credit System. The leadership of the program is under the FCSIC Board of Directors.
See Also
External Links
Social media
- No official social media accounts were found for the Farm Credit Insurance Fund.