ICBA testified before Congress on the importance of community banks to the nation’s agriculture credit markets and how policymakers can enhance the new farm bill.
ICBA’s Testimony: Testifying before the House Agriculture Committee’s Subcommittee on General Farm Commodities, Risk Management, and Credit, Brian Gilbert of First National Bank in Sioux Falls, S.D.:
Outlined ICBA’s recommendations for a new farm bill, including raising loan limits on USDA guaranteed loans, providing quicker loan approvals on USDA guaranteed loans in line with ICBA’s proposed USDA Express program, streamlining paperwork requirements, and restricting conversions of guaranteed loans to direct loans to cases of bankruptcy or loan default.
Applauded passage of the ACRE Act, which could assist producers with lower loan rates due to a 25% tax exemption in the One Big Beautiful Bill Act, and called on Congress to raise the exemption for all interest earned on loans secured by agricultural land.
Thanked members of the committee for including higher reference prices in the One Big Beautiful Bill Act as well as provisions benefiting crop insurance.
Detailed several concerns with proposals to expand the Farm Credit System’s tax and regulatory advantages by increasing its authority to serve nonfarm borrowers.
Urged lawmakers to place tighter restrictions on the FCS’s collection of uninsured deposits through “funds held” accounts, which allow the government-sponsored enterprises to operate like banks.
Community Bank Impact: “Community banks with under $10 billion in assets make approximately 78% of all agricultural loans made by commercial banks,” said Gilbert. “When Congress considers adopting new legislation, it is important to ensure these policies do not disadvantage community banks by granting nonbank competitors who have favorable tax and regulatory policies competitive advantages over community banks.”
ICBA View: Advancing policies that will help community banks create rural prosperity, food independence, and a stronger nation are key priorities of ICBA’s “Repair, Reform, and Thrive” plan and open letter to the 119th Congress.