ICBA Updates Congress on Ag Credit, Warns of Farm Credit System

ICBA Press Release Banner 2020

Washington, D.C. (Dec. 11, 2019) 
— The Independent Community Bankers of America® (ICBA) today told the House Agriculture Committee that farm banks have stable ag loan portfolios but remain concerned about rural economic conditions. ICBA community banker Steve Handke encouraged lawmakers to maintain a strong farm bill with robust crop insurance tools. Handke said total farm debt is now over $415 billion, so a modest increase in USDA guaranteed farm loan limits is warranted, and he stressed the need to level the playing field between community banks and the tax-advantaged Farm Credit System.

"Community banks are not fair-weather lenders but seek to work with their producers in both good times and bad," said Handke, regional president and chief administrative officer at First Option Bank in Osawatomie, Kan. "Let’s work together creatively to enhance solutions to assist our nation's farmers and ranchers and the community banks that serve them."

Community banks—which make roughly 80 percent of all agriculture loans from the banking sector—are doing everything in their power to keep their farm and ranch customers in business, Handke told the Subcommittee on Commodity Exchanges, Energy, and Credit.

He said market facilitation payments have made the difference between losses and slight profits for many farmers, though not all farmers affected by trade disputes benefit. He suggested these payments need to continue until market prices rebound, but he recommended they be more predictable to allow banks to include them into cashflow projections. Handke also urged passage of the United States-Mexico-Canada Agreement.

Handke also said Congress should facilitate a competitive environment for all lenders. He said the government-sponsored Farm Credit System's tax and funding advantages threaten the continued availability of community banking services in rural communities, posing risks to the farmers and ranchers who rely on these tax-paying institutions.

Handke pointed out the FCS’s intrusion into banking services with the offering of a checking account product with remote deposit features. He encouraged lawmakers to advance the Enhancing Credit Opportunities in Rural America Act (S. 1641 and HR 1872), which would exempt from taxation interest income on farm real estate loans and rural home mortgages in towns of less than 2,500 residents, helping community banks support their farm and ranch customers.

More information on ICBA's agriculture policies is available on the ICBA website.

About ICBA
The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. With more than 50,000 locations nationwide, community banks constitute 99 percent of all banks, employ nearly 750,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding more than $5 trillion in assets, nearly $4 trillion in deposits, and more than $3.4 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at

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