Washington, D.C. – U.S. Senators Russ Feingold (D-WI) and Kirsten Gillibrand (D-NY) are pushing legislation to help more farmers and ranchers restructure their loans as an alternative to foreclosure. Feingold and Gillibrand plan to offer an amendment to the Helping Families Save their Homes Act, currently being debated in the Senate, that would require lending institutions that receive additional funding through the Temporary Asset Relief Program (TARP) to offer farmers and ranchers the restructuring option. If a lender that has already received TARP assistance does not offer restructuring, it would lose eligibility for future federal assistance through TARP or other loan guarantee programs. For the large number of family farmers and ranchers across the country that have loans from these TARP assisted lenders and have been hard hit by the economic downturn, this amendment will provide added peace of mind that foreclosure will not be the first option if they fall behind on payments.
“The rough economy has taken a toll so many Americans, including farmers and ranchers, some whom are facing the threat of foreclosure,” Feingold said. “Dairy farmers in Wisconsin and across the country have been especially hard hit by plummeting prices for their milk, while costs have remained relatively high. If the government is going to help lending institutions with bailouts, those institutions should be doing what they can to help keep all Americans in their homes and this amendment makes sure this includes farmers and ranchers.”
“Family farms are the backbone of New York’s economy,” said Gillibrand, a member of the Senate Agriculture Committee. “From Colden in Western New York to Calverton on Long Island, families across New York have been hit hard by the economic crisis. While we are trying to keep New Yorkers in their homes, it is vital that we also help families keep their farms. Giving farmers the ability to restructure their loans is a critical part of our economic growth.”
The amendment contains safeguards for lenders to ensure that the requirement will not impact their ability to continue offering farm loans or inadvertently worsen their financial condition. Lenders must offer restructuring as an option as long as it does not impose losses on the lenders in excess of those they would incur during foreclosure. The provision mirrors the existing requirements to have foreclosure as the last resort under farm loans provided directly from the USDA Farm Service Agency or through the Farm Credit System, the-government sponsored enterprise for farm credit.