Chairman Frank Lucas today released the following statement on Scott O'Malia's last day as Commissioner of the Commodity Futures Trading Commission (CFTC). Last month, O’Malia announced he would resign to pursue other opportunities.
Streamlined Loan Request Triples Producers' Access to Lenders
At the request of House Agriculture Chairman Larry Combest (R-TX), USDA has tripled the sources for streamlined loans by private lenders. In 1992, Combest championed the Preferred Lender Program enacted by USDA in February of this year. The Preferred Lender Program's main feature is a guaranteed 14-day turn-around on applications. At Combest's insistence, the lending program will now expand the number of eligible lenders from 238 to 747.
"This announcement is well ahead of next years' loan season, giving lenders ample opportunity to provide timely delivery of guaranteed loans to ranchers and farmers," said Combest. "I have fought hard to streamline this program and I thank USDA and Under Secretary Gus Schumacher for helping local lenders and producers in this financial partnership."
Local lenders who meet federal requirements make loans approved by the county Farm Service Agency (FSA).
"The PLP is designed to allow lenders to make loans to eligible producers without unnecessary and burdensome government regulations, however the strict eligibility requirements made this difficult," said Charlie Stenholm, the committee's ranking minority member. "The goal is to streamline the paperwork requirements for as many producers and lenders as possible and I am pleased the FSA has relaxed the lender requirement."
Original rules announced on February 8, limited participation to lenders processing 30 guaranteed loans over a 3-year period. Under that criteria, 238 lenders in the country were approved. Concerned that not enough lenders were available to producers, Chairman Combest insisted that USDA change the 30 loans/3 year criteria to 20 loans in 5 years. This will expand the number of eligible lenders to 747.
Chairman Combest noted the importance of rural lenders' participation in streamlined lending not only during this year's demand but also for next season, particularly if prices remain where they are now.