A Study On American Legal Institutions Of Rural Financing Secondary Market

Recently, Chinese government has passed and implemented several reformation policies which not only contain the foundation of new rural financing institutions, innovation of rural financial products and services, but also expand the scope of collateral categories at the level of governmental policy. However, the effect cannot be acceptable. The situation has not yet changed that farmer cannot obtain financing as before; capital in rural area is still in scarcity; development of rural economy is still short of impetus. Investigating the reasons that lead to the situation, this paper finds that the absence of effective supply of legal institutions regulating rural finance field; developmental delay and weak institutional supply of primary financing market in rural areas; without legal institutions of secondary financing market, rural banking institutions cannot obtain support of sufficient funds from eligible investors of secondary market; all which are waiting for overcoming in the process of rural finance development.Based on the aforementioned, this paper systematically looks into the legal institutions of rural financing secondary market in America hoping contributing to the development of rural financing market in China. After comparison and study, this paper finds that the legal institutions of rural financing secondary market in America are characterized of grounding on developed capital market, being powered by government, disciplining on the independent operation of market, emphasizing protection of rights and interests of borrowers, pursuing the prudent control of risk, which are able to provide American rural financing market with credit support, funds supply, dilute and transfer financial risk and promote market competition. After that, this paper divides the legal institutions of rural financing secondary market of America into the legal institution concerning legal subjects on the rural financing market, the legal institution concerning marker operation and the legal institution of market supervision. The legal institution concerning legal subjects on the rural financing market contains the legal system of federal agriculture mortgage corporation(Farmer Mac) and the legal system of marketing institutions and investors. As to the legal institution concerning marker operation, this paper concludes the confirmation conditions of qualified mortgage loans, the scope of market operation belonging to Farmer Mac and detailed business modes of Farmer Mac; the legal institution of market supervision contains supervisory agency, technological process and standards, specific supervision measures.At last, proposing the following advices to establish and construct legal institutions of rural financing secondary market in China: confirming the sustaining policy goals of rural financing market, constructing legal institutions of rural finance, promoting the sustaining development of trading market of rural land usufruct, combining government-dominance and independent operation of market, emphasizing development of cooperative rural financial institutions, paying more attention to protecting the rights and interests of borrowers and establishing powerful supporting system; establishing and organizing the Chinese counterpart of Farmer Mac, setting strict market admittance standards, launching screening criteria of qualified loans, intensifying the corporation governance and risk control of operation entities on the secondary market, and in the end conducting “double layer” supervision mechanism.