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IOWA SENATOR GRASSLEY DEFENDS FARM CREDIT'S LENDING PRACTICES
Apr. 18, 2016
WHO Radio (Des Moines, IA) reports:
Farm Credit banks are under attack from private and community banks for making non-farm loans and still benefitting from a tax break on loan interest. However, one U.S. Senator is not worried the farm credit system will lose its tax-exempt status anytime soon.
The farm credit system is making non-farm loans to the likes of Cracker Barrel Restaurant and Verizon, even as it enjoys reduced taxes on interest for those loans and no tax on mortgage loans, according to the Washington Post>/a>.
Private and community banks say it's unfair, and some are lobbying Congress to change the law. Farm Credit officials counter that for a hundred years, bankers have been trying to put farm credit banks out of business, so they can corner the market.
Iowa Senator Chuck Grassley, however, doesn't expect anything to change. "I think, since a massive amount of their loans goes to help farmers, that you're not going to see a lot of changes made by the Congress of the United States," he told reporters Tuesday, "but let's just say there are some examples of maybe not helping directly, agriculture; those things should be under review, obviously, in normal Congressional oversight."
Grassley says oversight would be up to the Senate Agriculture Committee and its chairman, Pat Roberts. Farm Credit banks had $236 billion in loans last year, with two-thirds lent directly to farmers and the rest for rural power and water, real estate, exports and other loans. Grassley argues those loans contribute to rural development.
"If giving to non-agricultural people was part of the rationale that it contributed to rural economic development, I think that that would be a factor that would mitigate any criticism," he told reporters.
The Washington Post further reports that Farm Credit does not dispute some of its recipients-like Land O' Lakes Butter, Sunkist Oranges, Blue Diamond Almonds and Welch's Grape - Juice are not directly related to the farm. Farm Credit further argues, however, farmers benefit directly and indirectly from those loans.
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