Legislative Action News, October 16, 2012

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KC Federal Reserve Symposium Discussed Farm Cycles
By Stephen Frerichs

Earlier this year approximately 240 agricultural finance and business leaders attended the Federal Reserve Bank of Kansas City’s symposium, “Is This Farm Boom Different?” The group examined whether agriculture can escape its historical cycles of boom and bust.  Jim Farrell, CEO of Farmers National Company spoke on land values and Kirk Weih, AFM, was in attendance representing ASFMRA.

A summary of the meeting describes the similarities of the current farm boom with previous ones; details some differences and evaluates whether current farm land values are sustainable. You can find a copy of the report here: http://www.kansascityfed.org/publicat/mse/MSE_0412.pdf

CBO Says Fourth Year in a Row Deficit is Greater than $1 Trillion
By Stephen Frerichs

The federal government’s fiscal year 2012 closed September 30, 2012. The Congressional Budget Office (CBO) estimates that the federal budget deficit for the year was about $1.1 trillion, or 7.0 percent of gross domestic product (GDP). Although the deficit is approximately $200 billion lower than the shortfall recorded in 2011, fiscal year 2012 marks the fourth year in a row with a deficit of more than $1 trillion. As a share of economic output, the deficit has fallen in recent years—from 10.1 percent of GDP in 2009 to 9.0 percent in 2010 and 8.7 percent in 2011.

The decline in the deficit stems largely from an increase in revenues. Revenues were about 6 percent higher in fiscal year 2012, driven in part by a significant influx of corporate income tax receipts.

You can read the full report here: http://www.cbo.gov/sites/default/files/cbofiles/attachments/2012_09_MBR.pdf

USDA Announces Additional Acres to Support Wildlife
By Stephen Frerichs

Last week Secretary Vilsack announced the allocation of 400,000 acres to support conservation and restoration of wildlife and their habitats as part of the Conservation Reserve Program (CRP). The announcement of 400,000 state acres for wildlife enhancement (SAFE acres), fulfills USDA’s commitment made last spring to commit 1 million acres for special initiatives to restore grasslands, wetlands and wildlife habitat.   You can find the State breakout here: http://www.fsa.usda.gov/FSA/newsReleases?area=newsroom&subject=landing&topic=ner&newstype=newsrel&type=detail&item=nr_20121008_rel_0319.html

Secretary Vilsack did point out that no new CRP enrollments are currently possible since the 2008 Farm Bill has expired.

ASFMRA/AI Support Disclosure of AMC Fees
By Bill Garber

Additionally, with the Consumer Financial Protection Bureau (“CFPB”) up and running, there are numerous regulatory issues still pending relating to the Dodd-Frank Act. The regulatory issues include appraisal independence rules, AMC fee disclosure, AMC registration,   required physical property visit by appraisers in “higher risk” mortgages, HUD-1/RESPA Consumer Disclosure, and asset backed securities.

 Of particular note, the CFPB has proposed a new Consumer Disclosure form that is intended to replace the HUD-1 settlement statement. The proposed rule which was release for public until November, allows disclosure of appraisal management company fees, but does not require it. As a result, some lenders, particularly those that have an ownership stake in an AMC, would likely continue to “bundle” AMC fees with appraisal fees to avoid having AMC fees fall into a points and fees caps on lenders that is found in the Dodd-Frank Act. In a comment letter issued on October 9, ASFMRA and AI urged the CFPB reevaluate its stance on this issue, based on a clear authorization to require disclosure of AMC fees within the Dodd-Frank Act itself. INSERT LINKS.

Food industry braces for Prop 37
Morrison & Foerster

On Nov. 6, 2012, California voters will decide the fate of Proposition 37, the Genetically Engineered Foods Labeling Initiative. If the initiative passes, genetically engineered foods sold in California will have to be conspicuously labeled with the words “Genetically Engineered” or, in the case of processed foods, with the words “Partially Produced with Genetic Engineering.” It would be the first law in the United States to require any sort of labeling of genetically modified foods. Read more on Proposition 37 on the Western Farm Press website: http://westernfarmpress.com/government/food-industry-braces-prop-37?NL=WFP-01&Issue=WFP-01_20120927_WFP-01_333&YM_RID=sgruba@asfmra.org&YM_MID=1342310&sfvc4enews=42