Statement on Signing the Farm Credit System Reform Act of 1996

Today I have approved H.R. 2029, the "Farm Credit System Reform Act of 1996," which will reform and expand the activities of the Federal Agricultural Mortgage Corporation (Farmer Mac), as well as provide regulatory relief to members of the Farm Credit System.

This bill should lower the cost of credit for farmers and ranchers by passing along the benefit of Farmer Mac's lower interest rates to local banks. Other changes also will make it more attractive for county and regional banks to participate in the Farmer Mac program, which will link these local banks to national and international credit markets.

This bill is an example of the kind of reinventing government that I have encouraged in all areas of government. Under this new law, banks and farmers will have less paperwork, and the auditing programs will be freer to target areas of major concern.

As Farmer Mac takes on new business responsibilities as a mortgage purchaser and an issuer of securities, it will be important for the Farm Credit Administration and the Treasury Department to monitor the use of these new authorities to ensure the continued safety and soundness of this government-sponsored enterprise. Similarly, the relevant congressional committees have requested the Farm Credit Administration, working with the Treasury, to conduct periodic evaluations of Farmer Mac.

I also note that H.R. 2029 maintains a common board of directors for the Farm Credit System Insurance Corporation and the Farm Credit Administration, which serves as a regulator of the system. As previously proposed by the Administration, the Congress should reconsider this structure in the future to provide more independence for the board.

I am pleased to sign this bill in order to expand opportunities and lower costs for the ranchers and farmers of America.

WILLIAM J. CLINTON

The White House, February 10, 1996.