If bankers think Farm Credit System lenders are offering below-market interest rates, they have recourse under the law. The Farm Credit Act of 1971 prohibits its lenders from offering interest rates "below competitive market rates for similar loans made by private lenders." Bankers may report cases to the Farm Credit Administration - the Farm Credit System's regulator. Letters should be addressed to: Marsha Pyle Martin, Chairman and Chief Executive Officer, Farm Credit Administration, 1501 Farm Credit Drive, McLean, Va., 22102-5090. George Beattie, executive vice president of the Nebraska Bankers Association, advises bankers to include as many details about the low-rate loan as possible, including the term and the rate, without naming the customer. More than one example of below-market rates may be helpful, he says. Ms. Martin, who received 25 letters citing unfair competition last year, says her office does a full investigation of all complaints. The Farm Credit Administration typically does a survey of loan rates in the area and checks to make sure Farm Credit lenders are making a profit on each loan. Whether the complaint letters make a difference is debatable. So far none have led to disciplinary action against a Farm Credit lender, Ms. Martin says.
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