Opinion: Bank CEO responds to CoBank about broadband access
America’s farmers deserve a sure thing, and taxpaying banks
are ready and eager to finance rural broadband
so that hardworking farmers across the nation have the tools they need to feed
the world. But Mr. Engel’s unwritten assumption is
that CoBank should be financing the large entities that would provide the
critical access to broadband that so many farmers rely on. And CoBank certainly
has a history of extending credit to telecommunications corporations – in the
past few years CoBank has loaned $725 million to Verizon, $350 million to
Frontier Communications, $225 million to US Cellular and $200 million to
AT&T. And it seems that CoBank, busy wondering how it could extend
these loans, forgot to ask whether it should extend these loans.
In December last year, the House
Committee on Agriculture questioned CoBank’s regulator about CoBank’s $725
million loan to enable Verizon to acquire a stake in the European cellular
company Vodafone. The defense offered for this outrageous breach of public
trust was that the loan was permitted under the “similar entity” allowance,
meaning that CoBank could extend the loan to Verizon because it was a similar
entity to a rural telephone cooperative. Verizon, we can all agree, is not
similar to a rural telephone cooperative.
If enacted, Mr. Engel’s proposal,
though seemingly well-intentioned, would have an ancillary benefit – CoBank
could retroactively justify its ill-considered prior loans and continue to
extend inappropriate loans to Verizon, Frontier Communications, US Cellular and
AT&T.
One thing is certain: America’s
farmers need support and investment. But with this history of tweaking the
rules to engage in lending far outside of its mission, can we be sure that
CoBank’s primary aim will be to extend loans that will help farmers access
broadband?
Leonard
Wolfe, president and chief executive officer, United Bank & Trust, a $600
million community bank in Marysville, Kan.
#30
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