As you may recall, FHLBank Topeka changed its Member Products and Services Guide on April 1, 2018, to no longer accept pledges of agriculture loans with a Farm Service Agency guarantee. This change impacted the following collateral types within the schedule of eligible collateral: guaranteed loans backed by the full faith and credit of the U.S., agricultural real estate, operating loans and equipment loans. As a reminder, this change is applicable beginning with the filing of the June 30, 2018, Qualifying Collateral Determination form that will take place now through August 14, 2018.

We’re pleased to report there’s been some progress on the issue after receiving feedback on its importance from our members. Thanks to assistance from the Kansas Bankers Association and American Bankers Association, FHLBank Topeka and the USDA Farm Service Agency resumed discussions to find an alternate process that will allow FHLBank Topeka to perfect its security interest in the pledged collateral while becoming the holder of the guarantee, if needed. If FHLBank Topeka can successfully address these two issues with the USDA Farm Service Agency, we envision FSA-guaranteed loans will return as an eligible source of collateral. We will continue to keep you posted on the status of these discussions in the coming months.

If you have any questions on these changes, please contact Lance Liby, Chief Credit Officer, at 785.478.8140 or Kylie Mergen, Director of Financial Services, at 785.478.8203.