GAO REPORTS ON RISK-BASED INSURANCE PREMIUMS, ACCESS TO ASSOCIATION CAPITAL, SUPPLEMENTAL PREMIUMS, AND CONSOLIDATION.

SEC. 204. GAO REPORTS ON RISK-BASED INSURANCE PREMIUMS, ACCESS TO ASSOCIATION CAPITAL, SUPPLEMENTAL PREMIUMS, AND CONSOLIDATION. (a) In General.— The Comptroller General of the United States shall investigate, review, and evaluate the feasibility and appropriateness, and report to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate, on the advantages and disadvantages of providing the Farm Credit System Insurance Corporation with— (1) the authority to directly or indirectly assess associations to ensure that all System capital is available to prevent losses to investors, including a study of— (A) the effects of direct assessments by the Insurance Corporation on associations, including interest rate charges to borrowers; (B) the effects of requiring that banks pass along the cost of insurance premiums to owner associations and other financing institutions having a discount relationship with the bank; (C) the effects of requiring owner associations to purchase stock in the district bank, if needed, to prevent a bank from having to return to the Insurance Corporation for financial assistance once the assistance has been given; (D) the effects of the purchase of stock from funds of the association (through funds obtained from other than the district bank) or allowing the bank to increase the direct line of credit to the association in order to fund the purchase; and (E) the effect that authorizing the Insurance Corporation to assess the association could have on the association’s incentives for building capital; (2) the authority to collect supplemental insurance premiums under certain circumstances, including a study of— 106 STAT. 4107 (A) the possibility of the Insurance Fund being depleted more rapidly than it could be replenished under the current premium structure; (B) the effects of the depletion under alternate economic scenarios and the probability of the occurrence of each of those scenarios; (C) the effects on capital accumulation and interest rates of levying a supplemental premium; and (D) limitations on any authority to levy supplemental premiums and the underlying basis for the limitations; and (3) the authority to establish an insurance premium rate structure that would take into account, on an institution-by-institution basis, asset quality risk, interest rate risk, earnings, and capital. (b) Report on Consolidation.— (1) In general.— The Comptroller General of the United States shall evaluate and report to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate on whether there are likely to be benefits to farmer and rancher borrowers of the Farm Credit System institutions of merging the 10 district Farm Credit Banks (and the Federal Intermediate Credit Bank of Jackson) into fewer regional Farm Credit Banks. (2) Factors.— In preparing the report, the Comptroller General shall consider— (A) the potential reduction in services to farmers and ranchers; (B) the potential benefits of jointly providing services to farmers and ranchers among these proposed regional districts; (C) any economy of scale effects on a district-by-district basis; (D) the potential impact on the cooperative nature of the Farm Credit System; (E) the potential impact on bank and association relationships; and (F) the potential impact on System-wide bond issuances. (c) Potential Savings.— The Comptroller General of the United States shall evaluate and report to the appropriate committees of Congress on the potential savings to the Farm Credit System and its shareholders that might occur if System institutions and the Farm Credit Administration were required to comply with General Services Administration standards for office space, furniture, and equipment. (d) Deadline.— The reports required under this section shall be provided to Congress not later than 12 months after the date of enactment of this Act.