WASHINGTON—United States Senator Bill Hagerty (R-TN), a member of the Senate Banking Committee, this week joined a bicameral effort pressing the National Credit Union Administration (NCUA) to continue supporting agriculture producers’ access to credit.
In a letter to NCUA Chairman Todd Harper, Hagerty and his colleagues questioned language included in the NCUA’s Draft Strategic Plan that could lead to regulatory discrimination against credit unions that lend to farmers, ranchers, and agricultural businesses in the name of addressing “climate-related financial risks.” Hagerty joined the effort because regulators should be working to ensure that credit-worthy businesses receive the banking services they need as opposed to misusing financial regulation to further certain environmental and social policies.
Accordingly, the members of Congress are urging Harper to remove this language from the strategic plan and not impose burdensome new regulations on credit unions that are supporting farmers, ranchers, agri-businesses and rural communities.
“American farmers, ranchers and producers across the country work tirelessly to grow the highest quality, lowest cost food supply in the world,” the members of Congress wrote. “We are concerned that recent actions and statements by the NCUA could lead to the establishment of a regulatory environment that threatens the ability of farmers, ranchers, agri-businesses and rural communities to access credit… Placing increased regulations on those that serve the agricultural industry will threaten to restrict access to credit in rural communities, which could have serious consequences for an industry that is already facing high inflation and increased input costs.”
A copy of the letter can be found here or below.
Dear Chairman Harper:
As senators representing agriculture-producing states, we write to share concerns with recent statements and actions, including provisions in the National Credit Union Administration (NCUA) 2022-2026 Draft Strategic Plan, which could potentially restrict access to credit for farmers, ranchers, and agri-businesses.
As you know, American farmers, ranchers, and producers across the country work tirelessly to grow the highest quality, lowest cost food supply in the world. These producers rely on access to credit from their local credit unions and other financial institutions for the financing of their farming and ranching operations. We are concerned that recent actions and statements by the NCUA could lead to the establishment of a regulatory environment that threatens the ability of farmers, ranchers, agri-businesses, and rural communities to access credit.
In particular, the NCUA’s 2022-2026 Draft Strategic Plan, which describes the agency’s proposed strategic goals and objectives for the next five years, for the very first time, discusses the potential climate-related financial risks that face credit unions in the long-term. Of significant concern is the Strategic Plan’s discussion of these implications on the agricultural industry, and the potential for new regulations, increased examinations, and scrutiny of credit unions whose field of membership encompasses rural and agricultural communities. In fact, several of us have already heard of several of our constituent credit unions that will face an increased exam cycle solely based on their level of agricultural concentrations.
Placing increased regulations on those that serve the agricultural industry will threaten to restrict access to credit in rural communities, which could have serious consequences for an industry that is already facing high inflation and increased input costs. We encourage you to continue to support agricultural lending, and not overly burden credit unions for supporting their local farmers, ranchers, agri-businesses, and their communities.
We look forward to working with you to ensure that our agriculture sector can continue to have access to necessary credit. Thank you for your attention to our concerns.
Sincerely,
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