The American Bankers Association today wrote to House lawmakers in support of H.R. 1872, the Enhancing Credit Opportunities in Rural America Act. The bill—introduced by Rep. Steve Watkins (R-Kan.)—which would end taxation of interest earned from agricultural real estate loans. This would not only reduce servicing costs for community banks providing these types of loans, it would also level the playing field between banks and the tax-advantaged Farm Credit System—making it easier for banks to support the farm sector through real estate loans.
“ABA has long advocated for a more level playing field in agricultural lending, and this legislation helps to achieve that parity,” the association said. “The goal of banks in agriculture is ultimately lower costs for all farmers and ranchers, and this will be accomplished by leveling the playing field for all lenders.”