Rounds Introduces FSA Loan Guarantee Enhancement Act
WASHINGTON—U.S. Sen. Mike Rounds (R-S.D.) today introduced legislation to enhance the U.S. Department of Agriculture’s (USDA) farm loan programs. The Farm Service Agency (FSA) Loan Guarantee Enhancement Act would assist lenders in supporting producers during times of economic downturn within the ag sector.
“The FSA Loan Guarantee program provides financial assistance to farmers and ranchers who want to expand and improve their operations,” said Rounds. “Increasing both the individual cap for these loans and the total amount of money available for lending will allow a greater number of producers to utilize the program. Farming and ranching has become increasingly costly. The FSA Loan Guarantee Enhancement Act would more accurately reflect inflation and the increasing costs of agriculture production today, and make sure lenders have the flexibility to allow farmers and ranchers to weather times of economic downturn.”
Specifically, Rounds’ legislation would:
- raise USDA guaranteed ownership and operating loan guarantee from $1.4 million to $3 million,
- increase authorized private-sector loan offerings for guaranteed operating and ownership loans from $3 billion to $8 billion and raises the authorization for direct loans up to $3 billion, to match current funding levels.
- provide spending assurance, rather than have these programs depend on annual appropriations.
Since it was established in 1979, the authorization amounts and funding for FSA loans have never been increased. The FSA Loan Guarantee Enhancement Act would increase and update the authorization of resources available for these loans for the first time in nearly 40 years. It is supported by the Independent Community Bankers Association (ICBA), SD ICBA, the American Bankers Association and the Farm Credit Council.
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