Federal credit unions (FCUs) may invest in common stock of the Federal Agricultural Mortgage Corporation, or Farmer Mac, to the extent they must in order to serve as loan originators or sellers in the program, the federal credit union regulator said in an Oct. 4 legal opinion letter.
“Yes. The Agricultural Credit Act of 1987 (“Agricultural Credit Act”) authorizes this investment for FCUs,” according to the letter from National Credit Union Administration (NCUA) General Counsel Frank Kressman. “However, the investment is limited to the minimum amount of common stock required for FCUs to serve as originators or sellers of agricultural loans to Farmer Mac.”
This opinion supersedes one issued in 1988 (OGC Op. 88-1229) that said such investments were not permissible, the letter says.