The American Bankers Association recently expressed its support for the Farm Credit Administration’s proposed rule regarding loan policies and operations to increase direct lender associations’ young, beginning and small farmer and rancher activity and reinforce the supervisory responsibilities of the funding banks.
FCS institutions have not done nearly enough in recent years to support and encourage YBS farmers and ranchers, despite a statutory mandate to do so, ABA wrote in its comment letter. From 2016 to 2017, new loan volume and the number of new loans to YBS farmers and ranchers dropped across all categories, the association said, noting that FCA “must use whatever means are at its disposal to hold FCS institutions accountable for providing credit and other related services to these particularly vulnerable populations.”
ABA expressed its support for the proposed rule’s objectives, including increasing direct lenders’ YBS loan activity; reinforcing the supervisory responsibilities of the funding banks; requiring each direct lender association to adopt an independent strategic plan for their YBS program; and providing elements for the purpose of evaluating the year-over-year successes and shortfalls of each direct lender association’s YBS program. ABA called FCA’s decision to require associations to report on past performance a “commonsense requirement” that is “long overdue.”
ABA urged FCA to approach each objective with more than incremental progress in mind. “FCS institutions’ accountability to FCA and service to YBS farmers and ranchers should be paramount,” ABA wrote. “Accordingly, the framework for accountability laid out in the objectives should be fully strengthened and interpreted by FCA to ensure the greatest level of accountability is sought and required.”
