Farm Credit Administration Independent Authority Act
Farm Credit Administration Independent Authority Act
Plain Language Summary
# Farm Credit Administration Independent Authority Act Summary **What the bill would do:** This bill would declare the Farm Credit Administration (FCA) as the sole regulator of the Farm Credit System, which provides loans to farmers and agricultural businesses. The bill would exempt farm lenders from a Consumer Financial Protection Bureau (CFPB) rule that requires them to collect demographic information (race, sex, ethnicity) from small business loan applicants and report it to the federal government. Instead, farm lenders would only report this data to the FCA. **Who it affects:** The bill primarily affects farmers and agricultural borrowers who seek loans from Farm Credit System institutions, as well as these lenders themselves.
It also relates to the CFPB's oversight authority, which would be reduced under this legislation. **Key provisions and status:** The bill responds to a 2023 CFPB rule on collecting demographic data for small business lending, which has faced legal challenges. Rather than complying with the CFPB's requirements, FCS institutions would instead gather demographic information and report to the FCA instead. The bill is currently in committee and has not yet been voted on by Congress.
CRS Official Summary
Farm Credit Administration Independent Authority ActThis bill specifies that the Farm Credit Administration (FCA) is the sole regulator of the Farm Credit System (FCS) and establishes reporting requirements for FCS institutions (i.e., lenders).Specifically, the bill states that the FCA is the sole and independent regulator of the FCS and exempts entities that are supervised by the FCA from the Equal Credit Opportunity Act (ECOA).As background, the bill addresses a rule issued by the Consumer Financial Protection Bureau (CFPB) that implements provisions of the ECOA by requiring covered financial institutions, including FCS institutions, to collect and report to the CFPB data on credit applications for small businesses, including the principal owner's race, sex, and ethnicity. This 2023 rule has been challenged in court.The bill also requires FCS institutions to (1) request that loan applicants and borrowers that are small farmers disclose information identifying their race, sex, and ethnicity; and (2) annually report the collected information to the FCA. The FCA must make the collected information available to the public on annual basis. If an FCS institution customer does not voluntarily report the requested information, the FCA may not require the institution to use other means to deduce the information.In addition, the bill specifies that FCS institutions shall not be required to comply with the bill's requirements if financial institutions are not required to comply with the CFPB rule due to a court invalidating the rule or a repeal of the rule.
Latest Action
Referred to the Subcommittee on General Farm Commodities, Risk Management, and Credit.