dissenting.
In my view, Judge Edward Dumbauld’s opinion for the panel correctly stated the law and should be accepted by the Court en banc. Arcoren v. Peters, 811 F.2d 392 (8th Cir.1987). Accordingly, I dissent from the en banc opinion and do so for the reasons so ably set forth by Judge Dumbauld in his opinion of February 2, 1987.
I write only to emphasize several points in the panel opinion which are largely ignored by the majority:
(1) The plain language of the fifth amendment to the United States Constitution states, “No person shall * * * be deprived of * * * property, without due process of law.” There is no question that, at the time Arcoren’s cattle were taken by the FmHA officials, he had a property interest in the cattle protected by the fifth amendment. See, e.g., Fuentes v. Shevin, 407 U.S. 67, 85, 92 S.Ct. 1983, 1996-97, 32 L.Ed.2d 556 (1972) (possessory interest in chattels protected by fourteenth amendment due process); Rau v. Cavenaugh, 500 F.Supp. 204, 206 (D.S.D.1980) (Bogue, J.) (finding “plaintiff’s interest in her FmHA financed home is a property interest protected by the fifth amendment”); see also Johnson v. Department of Agriculture, 734 F.2d 774, 782 (11th Cir.1984) (“An FmHA loan, once made, creates a statutory entitlement and a property interest protected by the due process clause of the Fifth Amendment.”) (citing Goldberg v. Kelly, 397 U.S. 254, 262, 90 S.Ct. 1011, 1017, 25 L.Ed.2d 287 (1970); United States v. Henderson, 707 F.2d 853, 857 (5th Cir. 1983); McCachren v. Department of Agriculture, 599 F.2d 655, 656 (5th Cir.1979); Neighbors v. Block, 564 F.Supp. 1075 (E.D. Ark.1983); United States v. Ford, 551 F.Supp. 1101 (N.D.Miss.1982); Rau v. Cavenaugh, 500 F.Supp. 204 (D.S.D.1980); United States v. White, 429 F.Supp. 1245 (N.D.Miss.1977); Ricker v. United States, 417 F.Supp. 133 (D.Me.1976); Law v. Department of Agriculture, 366 F.Supp. 1233 (N.D.Ga.1973)).
(2) It had been long established at the time the FmHA officials took Arcoren’s cattle that, “[a]n elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated under all of the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present objections.” Mullane v. Central Hanover Bank, 339 U.S. 306, 314, 70 S.Ct. 652, 657, 94 L.Ed. 865 (1970); see also Rau v. Cavenaugh, 500 F.Supp. at 206 (“In this case the due process requirements of adequate notice and the opportunity to be heard are required by the fifth amendment.”).
Fuentes v. Shevin, decided by the Supreme Court in 1972, states:
*679For more than a century the central meaning of procedural due process has been clear: “Parties whose rights are to be affected are entitled to be heard; and in order that they may enjoy that right they must first be notified.” It is equally fundamental that the right to be heard “must be granted at a meaningful time and in a meaningful manner.”
Fuentes v. Shevin, 407 U.S. 67, 102 S.Ct. 1983, 32 L.Ed.2d 556, 569-70 (1972) (citations omitted).
It is difficult to understand how we can ignore this very specific language and hold that the law with respect to notice and hearing was not clearly established when Terry Arcoren’s property was seized and sold without notice to him.
(4) The text of the United States Constitution could not be clearer that officials acting on behalf of the United States Government may proceed against an individual as permitted by state statute only if the proceeding is permissible under the United States Constitution. See United States Constitution, Article VI (“This Constitution * * * shall be the supreme law of the Land”). Self-help statutes for creditors enjoy no exemption from the Supremacy Clause. Cf Mennonite Board of Missions v. Adams, 462 U.S. 791, 103 S.Ct. 2706, 77 L.Ed.2d 180 (1983) (holding that due process requires notice by mail to mortgagee of property prior to foreclosure of a tax lien despite state statute that did not require such notice). Requirements imposed upon federal officials by the United States Constitution do not fall by the wayside merely because they are acting pursuant to a state statute of which private creditors may make use.
The majority recognizes that government officials, such as those acting on behalf of the FmHA, must comply with constitutional requirements whether they are performing a traditionally private function or acting pursuant to an agreement with a private individual. Yet, astonishingly, the majority would exempt the FmHA officials from requirements imposed by the Constitution because the action “was not * * * pursuant to [the FmHA’s] authority as a sovereign power, but pursuant to a security agreement.” Majority opinion at 675. The majority cites no authority for the novel proposition that government officials acting pursuant to private agreements are exempt from constitutional requirements. The cases cited by the majority are inapposite. Warren v. Government Nat’l Mortgage Assoc., 611 F.2d 1229 (8th Cir.), cert denied, 449 U.S. 847, 101 S.Ct. 133, 66 L.Ed.2d 57 (1980), Roberts v. Cameron-Brown Co., 556 F.2d 356 (5th Cir.1977), Northrip v. Federal Nat’l Mortgage Assoc., 527 F.2d 23 (6th Cir.1975), and Bichel Optical Laboratories, Inc. v. Marquette Nat’l Bank of Minneapolis, 487 F.2d 906 (8th Cir.1973), deal with the issue whether the government is sufficiently involved in a foreclosure, either because it authorized and played a part in it pursuant to a state statute or because of the quasi-governmental status of the creditor, to invoke due process protections.1 Certainly in determining whether a foreclosure involves state action it is relevant to consider whether the particular action was taken pursuant to a private agreement, such as a security agreement, or whether the action involved exercise of a power of a governmental nature.2 But such considerations have nothing to do with this case.
*680The FmHA officials concede that they were government officials acting on behalf of a government agency and that the law clearly established as much at the time they took Arcoren’s cattle. This is not surprising, since the fact that they were government officials serves as the source of their claim to qualified immunity. It is incongruous to allow the FmHA officials to claim immunity as government officials and at the same time exempt them from constitutional requirements because their acts were sufficiently private in nature.
Indeed, if at the time they made the decision to repossess Arcoren’s cattle, the FmHA officials believed the FmHA would have been treated as a private lender, the problems in this case may well have never occurred. While it is true that, section 9-503 of the U.C.C. authorizes self-help for private lenders, the provision is not risk free. This is because the provision only authorizes self-help in the event of a default, as that term is defined in the agreements of the debtor and creditor. Thus, utilization of U.C.C. § 9-503 involves a determination by the creditor whether there has been a default. The determination is not to be made lightly, however, because if the creditor decides incorrectly that a default has occurred and utilizes the self-help provisions of the U.C.C., it will be liable to the debtor for the tort of conversion. The deterrent effect of the conversion action serves to limit a private creditor’s use of self-help to those instances in which it is certain a default has occurred and in which it is likely the debtor will destroy or move the security beyond the creditor’s reach before it may be repossessed by judicial process. In this light, and given the facts of this case, it would have been a reckless lawyer who would have advised the FmHA officials to repossess Arcoren’s cattle according to U.C.C. § 9-503 on the basis of the hearsay information available to them, if they faced the same liability as a private lender.3
Of course, the FmHA is not a private lender and does not claim to have been in 1980. In fact, the FmHA officials in this case not only claim qualified immunity, they also argued for absolute immunity in the district court, based on Imbler v. Pachtman, 424 U.S. 409, 96 S.Ct. 984, 47 L.Ed.2d 128 (1976), claiming their actions involved discretionary governmental functions of an official nature. Nonetheless, the majority ignores the arguments of the parties and affords the FmHA officials a chameleon-like quality, finding their actions sufficiently governmental to merit qualified immunity and sufficiently private to be exempt from constitutional requirements.
*681In essence, the majority’s decision creates a new “hybrid” type of lender. This hybrid enjoys the privileges of both private and governmental lenders, while being exempt from the responsibilities of both. Thus, the “hybrid” may take advantage of the self-help provisions of the U.C.C. without regard to the fifth amendment, while likely enjoying absolute immunity for itself and its agents acting in an official capacity and qualified immunity for its agents in their individual capacities from any conversion action.4
Perhaps, in a perfect world, it would be best to allow all creditors, governmental and nongovernmental, to operate according to the provisions of the Uniform Commercial Code without regard to Constitutional requirements and subject only to the deterrent effect the tort action would provide to those thinking of using self-help. This, however, is not the ease. The government and governmental officials enjoy significant immunities whether or not the function they perform is that of a private lender. In my view, if the government and its officials are to be awarded the benefit of these immunities, they must also accept the fact that they are bound to abide by the requirements of the Constitution.
In sum, governmental officials are not exempt from the requirements of the Constitution because a state statute authorizes a private individual to utilize a course of conduct otherwise off-limits to them. The law has always been clear that the Constitution prohibits officials acting on behalf of the government from depriving an individual of property without due process. The majority’s opinion fails to recognize this basic fact.5
*682(5) With regard to the time at which Arcoren was entitled to notice and an opportunity to respond, the majority mistakenly relies on South Dakota’s version of U.C.C. § 9-503 to establish that Arcoren had no right to notice and hearing before the FmHA took his cattle. This reliance is misplaced. As shown above, the due process clause of the fifth amendment prohibits the government from utilizing the section. Rather, the law at the time Arcoren’s cattle were taken clearly established his right to some form of notice and an opportunity to be heard before they were seized and sold.
The majority correctly recognizes that the process that is due depends on a weighing of “first, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the Government’s interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail.” Mathews v. Eldridge, 424 U.S. 319, 335, 96 S.Ct. 893, 903, 47 L.Ed.2d 18 (1976).
In applying the first prong of the test, it is clear that Arcoren had a property interest in the cattle protected by the fifth amendment. As to the second part of the test, it is important to recognize that in the present posture of the case, we must assume that Arcoren was current on his obligations under the loan and that he was not in default. Thus, this was not a case, such as a delinquency in payment, in which default was readily ascertainable by reference to an objective event. Determining default required the FmHA officials to collect some information as to Arcoren’s care of the cattle. Certainly, one of the best sources of such information, and a logical starting point, was Arcoren himself. In this light, the FmHA officials’ reliance solely on third party information is questionable.
Finally, with respect to the government’s interest and function, section 122 of the Agricultural Credit Act of 1978 is evidence of the intent of Congress as to the proper function of the FmHA and the interests it should serve.6 Thus, Judge Dumbauld held in the panel opinion that section 1981a of 7 U.S.C., as subsequently interpreted by Allison v. Block, 723 F.2d 631 (8th Cir. 1983), to require the FmHA to give predeprivation notice of deferral relief and to require uniform procedures for deferral eligibility, should have lead the FmHA officials to conclude that a predeprivation no*683tice and hearing were required in Arcoren’s case. Judge Dumbauld arrived at the conclusion reasoning that if Congress had expressed its intent that those who are clearly in default are entitled to predeprivation notice and hearing, those for whom default was at issue would be entitled to no less, particularly in light of the policy embodied in the statute of “facilitating whenever practicable the continued operation of existing agricultural enterprises.” Arcoren, 811 F.2d at 399. Thus, the law at the time Arcoren’s cattle were seized and sold, was clearly established with respect to notice and hearing, and its requirements were not overly burdensome or surprising. It merely required the FmHA officials to contact Arcoren and to give him a chance to respond before seizing and selling his cattle.7 Cf K. Davis, Administrative Law Treatise § 13:2 p. 477 (1979 & Supp.1982) (“A mighty good procedure — far superior to complete absence of procedural protection — is to confront a party with a summary of the evidence against him and to listen for five minutes to what he has to say.”)
In sum, it is unconscionable that the FmHA officials involved seized and immediately sold Arcoren’s cattle without providing him notice, without providing him an opportunity to respond to accusations by third parties that he had abandoned the cattle, without engaging in any judicial proceeding, and without even making any effort to independently verify whether Arcoren had in fact abandoned his cattle. The alleged behavior, if true, violated Arcoren’s clearly established constitutional rights. The panel opinion is sound and should be adhered to.
. The district court, in its opinion, recognized that the constitutionality of U.C.C. § 9-503 turns upon whether use of the statute by a private creditor involved sufficient state action to invoke constitutional protections. It states:
Although the self-help provisions of the U.C.C. have been declared unconstitutional in at least two cases, Watson v. Branch County Bank, 380 F.Supp. 945 (W.D.Mich.1974), rev’d without opin., 516 F.2d 902 (6th Cir.1975); Boland v. Essex County Bank & Trust Co., 361 F.Supp. 917 (D.Mass.1973), those were “exceptional cases." A greater number of decisions have held that repossession under the provisions of the U.C.C. does not entail state action.
Arcoren v. Peters, 627 F.Supp. 1513, 1517 n. 6 (D.S.D.1986) (emphasis added).
. In Roberts v. Cameron-Brown Co., 556 F.2d 356 (5th Cir.1977), the Fifth Circuit gave the reasons why FNMA, the predecessor of GNMA, was not a government agency:
Although regulated by the federal government in some aspects of its business, FNMA is essentially a privately-owned mortgage banker providing secondary mortgage loans. In *6801968, Congress specifically dissociated FNMA from its previous government ownership and transferred it to private ownership. * * * FNMA maintains the capital structure of a privately-owned corporation. HUD’s control extends over restricted areas, including approving the minimum amount of FNMA stock to be held by servicing companies, requiring that a reasonable portion of its mortgage purchases be related to the national goal of providing low income housing, and auditing financial records. * * * The secretary of the treasury also has some control over FNMA relating to the issuance of debt securities and borrowing from the Treasury. * * * We stand with the Sixth Circuit position that although the regulating statutes impose certain obligations on FNMA, the federal government and FNMA have not become so interdependent as to make its actions the actions of the federal government.
Id. at 359 (citations omitted).
Moreover, even if Warren v. Government Nat'l Mortgage Assoc., 611 F.2d 1229 (8th Cir.), cert, denied, 449 U.S. 847, 101 S.Ct. 133, 66 L.Ed.2d 57 (1980), had involved state action, there is nothing in the case contrary to Arcoren’s position. In Warren, notice was given to the property owners, first by letter and then by publication. GNMA did not secure possession of the property until after it brought an action for unlawful detainer in state court and obtained a judgment in that court. In this case, there was no notice, no hearing and no judicial proceeding, and unfortunately, the federal officers who seized and immediately sold the cattle had, at least we must assume for purposes of this appeal, made no independent effort to determine whether there had in fact been a default.
. In addition, there are criminal penalties in force for knowingly converting, concealing, removing, or disposing of any property mortgaged or pledged to the FmHA, under 18 U.S.C. § 658. It has been recognized that the availability of the criminal statute makes the self-help provisions of the U.C.C. less necessary for the FmHA to protect security interests in transportable or destructible chattel. See, e.g., Coleman v. Block, 580 F.Supp. 194, 204 (D.N.D.1984).
. For a discussion of FmHA immunities, see, e.g., Hagemeier v. Block, 806 F.2d 197 (8th Cir. 1986); Poolman v. Nelson, 802 F.2d 304 (8th Cir.1986); Culbreath v. Block, 799 F.2d 1248 (8th Cir.1986); Hamre v. United States, 799 F.2d 455 (8th Cir.1986); DeJoumett v. Block, 799 F.2d 430 (8th Cir.1986); United States v. Perry, 706 F.2d 278 (8th Cir.1983); Johnson v. Busby, 704 F.2d 419 (8th Cir.1983).
. Although raised by the appellee, the majority’s disposition of the case obviates the need for it to consider whether Arcoren waived constitutional due process rights to notice and a hearing. As the Supreme Court has recognized, "the hearing required by due process is subject to waiver.” D.H. Overmyer Co. v. Frick Co., 405 U.S. 174, 185, 92 S.Ct. 775, 782, 31 L.Ed.2d 124 (1972) (citing Boddie v. Connecticut, 401 U.S. 371, 378-79 (1971)). Such a waiver is not, however, easily proved because a court should not "presume acquiescence in the loss of fundamental rights.” D.H. Overmyer, 405 U.S. at 186, 92 S.Ct. at 782.
In Rau v. Cavenaugh, 500 F.Supp. at 207, the South Dakota district court found a covenant in an FmHA mortgage providing for waiver of notice prior to foreclosure ineffective as a waiver of the debtor's constitutional rights. In so finding the court stated, “This Court is * * * aware of the heavy burden of proof which rests upon any party that claims that a voluntary, intelligent and knowing waiver of constitutional rights has occurred.” Id. (citing Fuentes v. Shevin, 407 U.S. 67, 94-95, 92 S.Ct. 1983, 2001-02, 32 L.Ed.2d 556, rehrg. denied, 409 U.S. 902, 93 S.Ct. 177, 34 L.Ed.2d 165 (1972); Gonzales v. County of Hidalgo, 489 F.2d 1043, 1046 (5th Cir.1973)).
In support of its waiver argument, the FmHA points to the fine print of the security agreement it drafted. In that fine print the agreement states:
IV. IT IS FURTHER AGREED THAT:
A. Until default Debtor may retain possession of the collateral.
B. Default shall exist hereunder if Debtor fails to perform or discharge any obligation or to pay promptly any indebtedness hereby secured or to observe or perform any covenants or agreements herein or in any supplementary agreement contained, or if any of Debtor’s representations or warranties herein prove false or misleading, or upon the death, bankruptcy, insolvency or incompetency of Debtor or any person so called herein. Upon any such default:
1. Secured party, at its option with or without notice as permitted by law, may (a) declare the unpaid balance on the note and any indebtedness secured hereby immediately due and payable, (b) enter upon the premises and take possession of, cultivate and harvest crops, repair, improve, use, and operate the collateral or make equipment unusable, for the purpose of protecting or preserving the collateral or this lien, or preparing or processing the collateral for sale, and (c) exercise any sale or other rights accorded by law.
2. Debtor hereby (a) agrees to assemble the collateral and make it available to Secured Party at such time(s) and place(s) as designated by the Secured Party, and (b) waives all notices, exemptions, compulsory disposition and redemption rights. [Emphasis added.]
According to the plain language of the security agreement, Arcoren has not waived any rights to notice and hearing. The waiver provisions of the security agreement are effective only upon default. Until default, the provisions remained inoperative. This interpretation is reinforced *682by clause A which states that Arcoren may retain possession of the cattle until default. Yet, at this stage in the proceeding Arcoren has alleged, and we must accept, that he has not defaulted in any manner. Therefore, by the terms of the security agreement, Arcoren did not waive the right to notice and a hearing prior to the taking of his cattle.
In addition, even if the security agreementg did contain language of waiver, it would be ineffective. Although the Supreme Court has allowed waiver of notice and a hearing in the context of debtor-creditor relations, it did so only upon a finding that the waiver was supported by valuable additional consideration and was the result of arms length bargaining. See D.H. Overmyer, 405 U.S. at 187, 92 S.Ct. at 783. In this case, as in most cases in which the FmHA is the lender, the debtor was presented with a "take it or leave it” situation. The FmHA, by definition is a lender of last resort. As such, it can dictate the terms of its contracts. Moreover, the waiver clause in this case is located on the back of the security agreement in the fine print. There is no indication that the waiver was bargained for in any meaningful sense, or that it was supported by any additional consideration. Given these facts, it would be inappropriate to grant the FmHA officials summary judgment on the basis that Arcoren waived his right to a notice and a hearing.
. In a footnote to the panel opinion, Judge Dumbauld points out that FmHA officials must heed and adopt policies mandated by the Congress. The opinion states:
For example, the FmHA is not free to adopt the policy that something must be done to reduce the national deficit, and that therefore all farm loans shall be liquidated and foreclosed and collection thereof accelerated upon the slightest pretext, in order to gather as much money as possible into the government's hands to be applied to reduction of the national debt. On the contrary the FmHA must heed and adhere to the policy mandated by Congress of preserving existing farm operations wherever possible when they are threatened by temporary emergencies.
Arcoren, 811 F.2d at 398 n. 14.
. The majority’s statement, "that there would be little reason to require a pre-foreclosure hearing because as a practical matter a mortgagee would have no reason to institute foreclosure proceedings unless the mortgagor had defaulted,” majority opinion at 8, fails completely to consider the purpose served by a hearing. The purpose of the hearing is to allow the debtor to correct any misinformation the creditor may have concerning default. Moreover, since foreclosure and sale of collateral is a costly procedure and often fails to yield funds sufficient to fully pay the debt, it will normally be in the creditor’s interest to contact the debtor and avoid foreclosure if at all possible.