WASHINGTON, D.C. (February 10, 2025) |
Today, the Defense Credit Union Council and the Dakota Credit Union Association (DAKCU) wrote to the House Agriculture Committee highlighting credit unions’ role in supporting farmers and ranchers ahead of its upcoming hearing, “Examining the Economic Crisis in Farm Country.”
In the letter, DCUC and DAKCU emphasized the critical contributions of community-based financial institutions in sustaining America’s agricultural sector, serving as essential financial partners to farmers, ranchers, and rural communities, many of whom have been left behind by large banks.
Despite these efforts, DCUC and DAKCU stressed how credit unions face challenges that continue to limit their ability to fully support rural and agricultural communities. Among these challenges is the competitive imbalance created by the Farm Credit System (FCS). Although established to supplement agricultural lending, DCUC and DAKCU voiced how FCS has expanded beyond its intended mission, frequently competing with credit unions and community banks while benefiting from significant tax advantages.
“Unlike credit unions, which serve a broad membership and operate under strict regulatory oversight, FCS institutions have used their government-backed status to engage in commercial lending beyond family farms, undermining the competitive landscape for local financial institutions.”
To promote financial stability and economic growth in rural America, DCUC and DAKCU urge Congress to support rural financial institutions by ensuring they have the necessary resources to compete effectively. Their recommendations included that legislative and regulatory measures should prioritize strengthening credit unions to enhance their capacity to serve farmers, ranchers, and agricultural workers in underserved areas. Additionally, both advocates called for increased oversight of FCS, which they believe is necessary to ensure it remains focused on its core mission of supporting family farms rather than engaging in direct competition with taxpaying credit unions and banks. DCUC and DAKCU also called for Congress to adjust
the current cap on member business loans and encourage greater collaboration among rural lenders to create sustainable financial partnerships that benefit local producers.
As the House Agriculture Committee hears directly from stakeholders, DCUC and DAKCU urge lawmakers to recognize the essential role of credit unions and take decisive action to support rural financial institutions dedicated to serving their communities.
For more information, please contact Jason Stverak at jstverak@dcuc.org and visit dcuc.org/advocacy.