The Independent Community Bankers of America (ICBA) said Wednesday it strongly supports laws that would exempt from tax interest income on farm real estate and rural mortgages.
If passed, the Rural America Credit Improvement Act (ECORA) would allow community banks to lower lending rates and better serve borrowers in rural and agricultural areas.
“With community banks providing 80 percent of the banking industry’s farm loans, ICBA strongly supports the Rural American Credit Improvement Act (ECORA) to offer lower interest rates to certain rural borrowers and homeowners,” said Rebeca Romero Rainey, President and CEO of ICBA . “This important piece of legislation will help sustain and revitalize the rural economy, which is struggling to overcome the effects of the COVID-19 pandemic, and will provide benefits to community bank lenders that they can pass on to customers, similar to others rural loan providers. “
The law was reintroduced on March 17 by US Representatives Ron Kind, D-Wis. And Randy Feenstra, R-Iowa, and originally introduced in 2019 and reintroduced in 2020.
“I have heard from many lenders and farmers in Wisconsin about a credit crunch on agricultural and rural loans that has only worsened as the COVID-19 crisis progressed,” said Kind. “The ECORA Act will take steps to address this issue, reduce the cost of farmers and families to obtain credit in our rural communities, and provide a path to increased income. It is precisely in these challenging times that we need to make sure our hardworking family farmers get the support they need, and better access to low-cost credit is an important way to do that. ”
ICBA said the bill would exempt tax loans backed by farm real estate and similar easing of interest on loans backed by rural family homes. These measures would help those looking to get loans to stay on their farms or to buy a home loan in rural communities, get better interest rates and credit terms, and give banks a strong incentive to stay in rural agriculture and housing markets.
“The Rural America Credit Improvement Act is an important proposal that will help provide cheaper credit to farmers and ranchers. Our hardworking farmers feed and fuel the world and I will support all efforts that provide the resources they need to thrive in today’s economy, ”said Feenstra.