Fair Credit for Farmers Act of 2025
Summary
The Fair Credit for Farmers Act of 2025 aims to amend the Consolidated Farm and Rural Development Act and the Department of Agriculture Reorganization Act of 1994. It focuses on reforming farm loans and the National Appeals Division process. The bill provides for deferment of payments, interest rate modifications, and waiver of guarantee fees for certain farmers.
Expected Effects
The act will likely ease the financial burden on farmers, particularly those classified as limited resource, socially disadvantaged, beginning, or veteran farmers. It also seeks to streamline the loan application and appeals processes. The reform aims to provide more equitable relief and prevent ineligibility restrictions based on past debt write-downs.
Potential Benefits
- Provides payment deferments on direct farm loans for eligible borrowers.
- Modifies interest rates on direct farm loans to 0.125% for a 2-year period.
- Waives guarantee fees on guaranteed farm loans for covered producers.
- Reforms the farm loan application process, including determination letters and collateralization requirements.
- Removes eligibility restrictions based on previous debt write-downs or other losses.
Potential Disadvantages
- Potential for increased government debt due to loan deferments and interest rate reductions.
- Possible delays in loan processing due to new requirements for determination letters.
- Could create additional administrative burden for the Department of Agriculture.
- May not address the root causes of financial distress among farmers.
- Potential for unintended consequences due to changes in collateralization rules.
Most Disadvantaged Areas:
Constitutional Alignment
The bill aligns with the Constitution's general welfare clause (Preamble). Congress has the power to regulate commerce and provide for the general welfare, which includes supporting agricultural sectors. The specific provisions related to loan modifications and debt relief fall under Congress's enumerated powers to enact laws necessary and proper for carrying out these responsibilities (Article I, Section 8).
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).