The “Farm Credit Adjustment Act” Would Reduce Unnecessary Burdens & Costs for Farm Credit Institutions, Which Provide Loans to Farms, Rural Businesses, Rural Utilities, & More
WASHINGTON, D.C. — U.S. Representatives Abigail Spanberger (D-VA-07) and Doug LaMalfa (R-CA-01) today introduced bipartisan legislation to cut red tape for America’s farm credit institutions — which provide critical financial support to farmers and producers in Virginia, California, and across the country.
Currently, the Farm Credit Administration (FCA) must conduct full safety audits and soundness examinations of farm credit institutions at least once every 18 months. The extra staff preparation, regulatory burdens, and costs associated with these audits negatively impact the ability of low-risk farm credit institutions to provide timely service. Furthermore, these audits often fall at the end of the calendar year — when farmers and producers rely on their local farm credit institutions to provide funds to support their spring planting operations.
The bipartisan Farm Credit Adjustment Act would help address this issue by allowing the FCA to conduct audits of low-risk farm credit institutions every 24 months, rather than every 18 months. This straightforward, six-month extension would reduce regulatory burdens and costs for farm credit institutions and make sure they have more bandwidth to serve the needs of their customers — including thousands of farmers, agribusinesses, rural utilities, and agricultural cooperatives.
“As the only Virginian on the House Agriculture Committee, I know the importance of our farm credit institutions to the long-term economic success of Virginia’s farms, small businesses, and rural communities. By cutting unnecessary red tape for these critical organizations, our bipartisan bill would prevent interruptions and delays in their services,” said Spanberger. “I want to thank my colleague Congressman LaMalfa for his partnership on this legislation, and I look forward to moving our bill forward to provide relief to the organizations that are laying the financial foundation for rural America’s growth and development.”
“Redundant, bureaucratic paperwork wastes staff and constituent time, increases costs and makes helping people take longer,” said LaMalfa. “This bill will help low risk farm credit branches in rural America focus their limited time on helping our farmers, co-ops, and rural utilities. I’m happy to work on this bipartisan legislation with Representative Spanberger to ensure we keep our rural economy producing.”
The Farm Credit Adjustment Act is supported by Farm Credit of the Virginias and Colonial Farm Credit.
“Thank you, Representative Spanberger, for reducing regulatory burdens by introducing the Farm Credit Adjustment Act,” said Jennifer Cuthbertson, Chair of the Board of Directors
Colonial Farm Credit, ACA. “This legislation allows the Farm Credit Administration appropriate flexibility to examine Farm Credit associations they deem low risk every 24 months. This adjustment provides low-risk Farm Credit institutions the ability to focus on serving customers instead of performing duplicative regulatory functions. Farm Credit appreciates Representative Spanberger’s leadership on this issue and looks forward to working with her on the Farm Bill.”
“Thank you, Representative LaMalfa, for reducing regulatory burdens by introducing the Farm Credit Adjustment Act. This legislation allows the Farm Credit Administration appropriate flexibility to examine Farm Credit associations they deem low risk every 24 months and provides low-risk Farm Credit institutions the ability to focus on serving customers instead of performing duplicative regulatory functions. Farm Credit appreciates Representative LaMalfa’s leadership on this issue and looks forward to working with him on the Farm Bill,” said Mike Doherty, Chairman of the Board, Farm Credit Services of Colusa-Glenn, ACA.
The Farm Credit System is well-capitalized, liquid, and financially sound — in part due to structures, safeguards, and sources of funds that are fundamentally distinct from commercial banks. However, a traditional audit of low-risk farm credit institutions can still take three to four weeks of staff questioning by FCA officials, which requires months of preparation.
Click here for the bill text.