The Independent Community Bankers of America last week endorsed legislation that the organization says would provide tax relief for farmers. The group says the Enhancing Credit Opportunities in Rural America Act would support farmers, ranchers and rural homeowners by providing tax relief for agricultural and rural residential lending. The bill was introduced by U.S. House Member Lynn Jenkins, a Republican from Kansas. The bill would also promote access to credit and reduce borrowing costs amid the current weak commodities prices. The banking organization says that while farmers enjoyed robust prices for commodities earlier this decade, the current downturn in farm prices has reduced net farm income from $128 billion in 2013 to a projected $71.5 billion this year. Meanwhile, strict mortgage and appraisal regulations are driving lenders out of rural mortgage lending, curtailing access to credit, and threatening the rural housing market. The bill, H.R. 6260, was referred to the House Ways and Means Committee.
From the National Association of Farm Broadcasting news service.
From: Independent Community Bankers of America
Legislation promotes access to credit amid era of weak commodities prices
The Independent Community Bankers of America® (ICBA) expressed support for legislation to support farmers, ranchers and rural homeowners by providing tax relief for agricultural and rural residential lending. The Enhancing Credit Opportunities in Rural America Act, introduced by Rep. Lynn Jenkins (R-Kan.), would promote access to credit and reduce borrowing costs amid the current environment of weak commodities prices.
“ICBA strongly supports the Enhancing Credit Opportunities in Rural America Act to help community banks offer lower rates to certain rural borrowers and homeowners, which will help revive rural economies threatened by low commodities prices,” ICBA President and CEO Camden R. Fine said. “By offering community banks greater flexibility to serve producers and the rural housing market, this legislation will help farmers and rural communities remain viable during a challenging economic environment. It also will allow community banks to provide lower loan rates and better compete with other types of rural lenders who already have the same benefits.”
While farmers enjoyed robust prices for their commodities earlier this decade, the current sag in farm prices has reduced net farm income from $128 billion in 2013 to a projected $71.5 billion this year. Meanwhile, strict mortgage and appraisal regulations are driving lenders out of rural mortgage lending, curtailing access to credit, and threatening the rural housing market.
Under the Enhancing Credit Opportunities in Rural America Act, the interest received on farm loans secured by agricultural real estate would not be taxable. The bill would provide similar relief to interest on loans secured by rural single-family homes that are the principal residence of the borrower in towns with a population of less than 2,500. Together, these provisions will offer community bankers greater flexibility to work with farmers who may have trouble servicing their debt while giving lenders a strong incentive to remain in the rural farming and housing markets.
As espoused in its Plan for Prosperity regulatory relief platform, ICBA supports targeted tax relief for community bank lending consistent with advantages enjoyed by other lenders serving the same markets.