In a letter to the federal banking agencies today, Sens. John Thune (R-S.D.) and Tammy Baldwin (D-Wis.) made a bipartisan appeal for greater regulatory flexibility that would allow community financial institutions to work with farmers and ranchers during a challenging time in the agricultural economy.
The senators raised concerns about policies that could limit banks and credit unions’ ability to lend to struggling farmers and ranchers, such as arbitrary concentration limits on ag portfolios. “Community financial institutions have a great deal of experience in agriculture lending during downturns in the farm economy,” they wrote. “We urge you to encourage your examiners to continue valuing their judgment when it comes to providing capital to producers.”
They added that additional flexibility need not come at the expense of safety and soundness, emphasizing that “we believe community financial institutions, together with examiners and regulators, can exercise sound judgment until the farm economy rebounds.”