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John Wesley Boyd Jr., president of the National Black Farmers Association, poses for a portrait at his farm on Wednesday May 9, 2012, in Baskerville, Virginia.
Three of the biggest US banking groups want the US Department of Agriculture to reconsider the terms of billions of dollars in planned debt relief for minority farmers, claiming it will cut into banks’ profits – and warn they may have to cut those same farmers off from future loans.
President Joe Biden’s $1.9 trillion Covid relief package passed in March includes $4 billion to help pay off farm loans for socially disadvantaged farmers and ranchers – a group that includes Black and other minority farmers, who have long faced discrimination from lenders and the USDA. The payments will cover up to 120% of outstanding debt for each farmer or rancher, according to the USDA.
In a joint letter addressed to Secretary of Agriculture Tom Vilsack last month, the American Bankers Association, the Independent Community Bankers of America and the National Rural Lenders Association say that banks will suffer “lost income” if the farm loans are paid off early. The banks say they will lose the interest they would have earned over the life of these long-term loans. The groups want the USDA to compensate banks for any lost income, the letter states.
The groups, which represent 52,000 bank locations, added: “If USDA does not compensate lenders for such disruptions or avoid sudden loan payoffs, the likely result will be less access to credit for those seeking USDA guaranteed loans in the future, including [socially disadvantaged] farmers/ranchers.”
“The statement is a threat to Black and other farmers of color,” said John Wesley Boyd Jr., president of the National Black Farmers Association.
The National Black Farmers Association sees the letter from the lenders as further financial discrimination.
“It is a continuation of the discrimination Black Farm
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