Greetings and Happy Monday,
I’m looking forward to seeing many of you this Wednesday at our South Dakota Legislative Day in Pierre. I truly look forward to these events as we work to strengthen and promote positive relationships with our South Dakota lawmakers. More importantly, it provides Dakota credit union professionals an opportunity to share how credit unions focus on the financial health and well-being of our members while advancing the communities we serve.
The roundtable dialogue session also provides a great opportunity to come together to network and have high-level discussions on issues that are impacting credit unions and members. If you have not registered and would like to join us, be sure to sign up today – last minute attendees are welcome, but please register so we can plan accordingly. Complete agenda along with hotel information can be found here.
NCUA's Strategic Plan draft is a direct attack on Dakota credit unions that support ag and livestock producers and the energy sector businesses.
For the last several months, we have been concerned by NCUA Chair Harper’s comments made to our credit unions as recently as September, as well as the NCUA’s draft Strategic Plan 2022-2026 regarding FOM and the type of loans impacted by climate change. Over the last ten days we have engaged all four our Senate offices (Senator Cramer, Senator Rounds, Senator Hoven, and Senator Thune) on the issue.
Harper’s statement to Dakota CUs in September 2021: “We are actively monitoring certain segments of the system, including credit unions closely connected to the oil and gas industry and the agricultural sectors, among other.”
AND – NCUA Strategic Plan – Page 12: “Changing weather patterns will disproportionately affect farming communities. Over time, climate change will likely affect the value of collateral, including homes and vehicles. To remain resilient credit unions may need to consider adjustments to their fields of membership as well as the types of loan products they offer. Efforts to combat climate change will likely give rise to new regulations, potentially increasing costs for credit unions as they adapt and respond.”
As you know, several credit unions here in the Dakotas are engaged in financing farm and ranch producers, many in our rural communities. Most of these credit unions were initially chartered to serve their farming and ranch members. We also have credit unions that support peripheral businesses in the energy sector here (oil, gas, and coal). Some credit unions have already experienced scrutinization in recent exams from the NCUA and a few have been told to eliminate these loans from their portfolios. Some have been notified by the NCUA they will now be on a 12-month exam cycle because of their concentrations in ag and ranch lending.
In our Dakota region, agriculture extends well beyond crops and livestock. It includes agritourism, agribusiness and food processing, equipment manufacturing and dealerships, innovative technology, local food and farmers markets, and agricultural education.
Agriculture is everything from seeds and fertilizers to the food, feed, fiber, and fuel we all use each day. As a prime exporter of agricultural products, we are often cited as the “breadbasket of the world,” and we are the leading producer of at least 14 different commodities as well as a close second to a great many more.
More importantly, Dakota farmers are the answer to climate change and plant-based agriculture enhances climate resiliency. This is something that our federal regulatory does not fully understand or refuses to acknowledge. The high value of sustainable agriculture to the climate must be duly recognized. Current regenerative agricultural practices positively contribute to environmentally friendly undertakings such as carbon sequestration. Many current and wide-spread agriculture practices already readily qualify as climate-smart practices. This includes no-till farming, protecting farmland and pastureland, effective irrigation management, regular use of cover crops, organic farming practices, the integration of livestock and crops, and the rotating of diverse crops all help to preserve and protect the environment.
According to the North Dakota Agriculture Commissioners office, commonplace agricultural practices capture excess carbon generated by other industries and that help mitigate climate change. Captured carbon is then converted into plant material and/or soil organic matter, dramatically improving soil health and increasing the ability to produce food on the land in the future. Plants universally use carbon dioxide. In short, more plants mean less carbon. As we know, carbon is essential for plant photosynthesis. Plants then produce oxygen. Plants also capture and absorb sunlight energy. Plants also capture carbon and fix it into the soil, creating more organic matter. This leads to more stored nutrients, more stored water, as well as softer and less compacted soil. Further, the longer the growing season means the more carbon these plants can absorb. Longer growing seasons additionally allow for more varieties of cover crops which, in turn, will then trap more carbon and improve soil health. The agriculture industry continues to make great strides in producing more food, fiber, feed, and fuel with fewer inputs.
These ongoing agronomy practices must be respected and continue to be incentivized through competitive financing by our credit unions and local financial institutions. Today is the final day to comment on the NCUA’s strategic plan. Here is a copy of our comment letter.
Don’t Wait to Register for ULEND!
If you are interested in attending or sending one of your lending professionals to ULEND Academy, don’t wait much longer to register because the class is filling quickly. This in-person event is scheduled for March 15 – 16 in Fargo. It is a “hands-on” experience and attendees walk away with new skills they can put into use immediately. Click here for more information or feel free to contact George McDonald with any questions.
Congratulations to Levo FCU Team
Finally, I want to congratulate Fran Sommerfeld and his entire staff at Levo FCU (formerly Sioux Falls FCU), as they were recently named by The Best of Sioux Falls in the banking category. The credit union appeared #2 on the list, which allows local consumers to vote for their favorites in a survey format. You can’t pay for this kind of positive press – so kudos for earning this recognition.
Have a great week,
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