Independent Banker - May 2023 - 31

be streamlined. There should be
sufficient funding to meet borrower
demand, including for YBS farmers
and ranchers. USDA direct loans
should complement but not undercut
guaranteed loans made by privatesector
lenders.
Stop Farm Credit System
(FCS) expansion. ICBA opposes
expansion of the FCS into nonfarm
lending. Speedy and broad approvals
in this area would undercut taxpaying
community banks, threatening their
viability and, by extension, access
to credit in rural America without
proving a lack of credit exists.
Continued community
bank access to general credit
programs. The farm bill should
maintain community banks' ability to
serve rural America with access to all
general financing and credit assistance
programs. The government should not
subsidize the competitive advantages
of privileged, nonbank competitors.
Reduce regulatory burden
and ensure fairness. Federal
agencies should be required to
implement programs fairly and
equitably for all stakeholders while
reducing the regulatory burden,
which is one of the leading causes
of bank consolidation. This includes
equalizing tax treatment for all rural
lending, including for credit unions,
ICBA is lobbying Congress for provisions in the
2023 reauthorization that will help rural America
navigate challenging economic conditions while
bolstering community banks' ability to continue
to provide essential credit.
which are currently exempt from
taxation. Meanwhile, FCS lenders'
effective tax rate was only 2.3% in
2021, unfairly allowing FCS lenders
to undercut the loan rates banks offer
to the same customers for the same
loan terms. Tax disparities like this
have contributed to community bank
consolidation, threatening small
and rural communities, especially
as credit unions increasingly buy
community banks.
Fostering greener " ACREs "
In addition to the passage of the
farm bill reauthorization, ICBA is
advocating for legislation to address
some of these inequalities. The Access
to Credit for our Rural Communities
Act of 2003 (ACRE) would create a tax
exemption for banks to lower interest
rates to borrowers for farmland
loans and residential mortgage in
communities of 2,500 or less.
This critical legislation would
create opportunities for:
¡ Lower interest rates for farmers,
ranchers and homeowners
¡ Lower borrowing costs for
refinancing or acquiring farms,
ranches or homes in rural
communities
¡ Greater flexibility for community
banks when working with farmers
and ranchers having trouble
servicing their debt or who are YBS
borrowers with little equity
¡ A strong incentive for lenders to
remain in the rural farming and
housing markets.
How you can help
Effective advocacy takes the efforts of the entire community banking
industry. ICBA makes that easier with our Grassroots Action Center.
Community bankers can send pre-populated letters, download the
latest position statements or reach out with questions about how to
improve their advocacy efforts. Visit icba.org/beheard
Community banks need to be a voice for rural communities. Make
sure you're reaching out to legislators and their key staff on the
reauthorization of the Farm Credit Bill and ACRE.
ACRE's provisions would boost
local economic activity, strengthening
America's rural communities. In
addition, ICBA is actively monitoring
discussions of climate-risk policies
to ensure any proposal will not
adversely affect community banks'
ability to support their communities
and customers.
Mark Scanlan (mark.scanlan@
icba.org) is ICBA's senior vice
president of agriculture and
rural policy
independentbanker.org // 31
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Independent Banker - May 2023

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