Independent Banker - May 2021 - 37

adopted, would allow community
bankers to off er better terms and
lower interest rates to borrowers
while being able to compete against
the tax-advantaged Farm Credit
System (FCS).
Relief may be on the way
Rep. Ron Kind (D-Wis.) and Rep.
Randy Feenstra (R-Iowa) introduced
the Enhancing Credit Opportunities
in Rural America (ECORA) Act of
2021 (H.R. 1977) in March.
" This important legislation will
provide a more competitive market
for those looking to fi nance ag real
estate and home mortgages in rural
communities, " says Rose Oswald
Poels, president and CEO of the
Wisconsin Bankers Association and
an instrumental advocate for the
bill's introduction. " Lower interest
rates and better loan terms will help
sustain farmers, ranchers and rural
homeowners which also helps sustain
Main Street business activities. "
Ag lending provisions
The ECORA Act creates a new,
targeted tax incentive for agricultural
and rural residential lending. The
bill's provisions would:
 Exempt interest on loans secured
by agricultural real estate from
taxation. This gives lenders more
fl exibility to work with farmers
and ranchers while withstanding
scrutiny from regulators who
often view agricultural loans as
risky or too concentrated in rural
banks' portfolios.
 Exempt taxable income from
rural residential mortgages in
communities of fewer than 2,500
people. Existing rules are driving
lenders out of rural mortgage
lending, curtailing access to
mortgage credit and undermining
the rural housing market. The
ECORA Act also exempts income
" [The ECORA Act] will boost rural economies,
help farmers and ranchers remain on their farms
and make it more attractive for those seeking
home loans to locate in smaller, more remote,
rural communities. "
-DAVE CARIS, COMMUNITY BANKERS OF IOWA
from rural mortgage loans from
taxation. The population limits will
be determined by the secretary of
agriculture based on census data.
This provision would allow
community banks to off er lower
interest rates on rural home loans.
This helps level the competitive
landscape with other types of lenders,
such as credit unions and the FCS,
that enjoy the same tax preferences.
Although credit unions pay no taxes
and the FCS is largely tax exempt,
these lenders have poor records in
serving those most in need, including
young, beginner and/or small farmers
and ranchers, while community banks
heroically seek to serve all borrowers
who have a reasonable chance
to repay.
The way forward
The bill was introduced in the
previous session of Congress and
generated a strong level of support
in both houses. With the aid of ICBA
grassroots advocacy and community
bank involvement, direct lobbying,
and enthusiastic advocacy by its
congressional sponsors, the bill can
attract many cosponsors from both
sides of the aisle in the new Congress
even though the FCS is lobbying
against the measure behind the scenes.
Community banks reached out
to their members of Congress to
advocate for the bill as part of ICBA's
Capital Summit in April and in
response to ICBA grassroots action
alerts and other advocacy outreach.
" This bill will boost rural
economies, help farmers and
ranchers remain on their farms
and make it more attractive for
those seeking home loans to locate
in smaller, more remote, rural
communities, " says Dave Caris,
CEO of the Community Bankers of
Iowa, who also pushed for the bill's
introduction in Congress.
As rural economies work to
overcome the impact of COVID-19,
ECORA will help sustain and revive
rural economies. It will provide
community bank lenders with
tangible real-world benefi ts they can
pass on to customers and give a real
shot in the arm to our rural banks.
It's time for community banks to
make a strong push to enact ECORA.
Ask your elected representatives to
cosponsor the legislation. 
Mark Scanlan (mark.scanlan@
icba.org) is ICBA's senior vice
president of agriculture and
rural policy.
independentbanker.org Q 35
http://www.independentbanker.org
Independent Banker - May 2021

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