Treasury and given targeted lending authorities (such as the Federal Land Banks).
The twelve Federal Land Banks (FLBs) that made up the system provided long-term mortgage credit to farmers and ranchers at low rates of interest.
Starting with the Federal Farm Loan Act of 1916, Congress established a cooperative system of Federal Land Banks
and farm loan associations.
The story continues through the Federal Land Banks
created in the same era to improve the flow of finance to small farmers and a variety of municipal enterprises providing everything from ice to schools.
1916: President Wilson signs law creating the Federal Land Banks (FLB) and Farm Loan Board, provides government start-up capital for cooperative ag lending agencies.
The System's Federal Land Banks and Federal Intermediate Banks were required to merge.
He estimates a logit regression model that includes a state's farm foreclosure rate, percentage of farms mortgaged, and percentage of farm mortgages held by federal land banks as explanatory variables.
In the 1930s, most farm mortgages were issued by local commercial banks, private individuals, insurance companies, and federal land banks. Insurance companies tended to be larger and more diversified and to have a lower cost of funds than did banks and individual lenders.
The FCS is composed of member lending institutions known as the federal land banks. Because of deregulation and unanticipated declines in the value of the agricultural mortgage loans that the banks held as assets, the FCS suffered severe financial distress and required recapitalization by government during the 1980s.
* Diversification risk: Both the FCS's federal land banks of the 1980s and the present-day FHLBanks are restricted geographically in their lending portfolio, and both prevent member institutions from diversifying risk through multiple membership.
Federal Land Banks
had loans outstanding of $19.1 billion, an increase of 15.1 percent, and made loans of $4.7 billion during the year, a 6.6 increase.
Local Production Credit and Federal Land Bank
associations are represented on the boards of the twelve districts.