This bill makes the Farm Credit Administration (FCA) the sole regulator of the Farm Credit System, which is a network of lenders that provide loans to farmers and rural communities. Right now, these farm lenders have to follow rules from the Consumer Financial Protection Bureau (CFPB) about collecting demographic information from loan applicants. This bill says farm lenders no longer have to follow that CFPB rule.

Instead, the bill creates a different system just for farm lenders. They would ask small farmers applying for loans to voluntarily share their race, sex, and ethnicity information. The farm lenders would then report this data to the FCA each year, and the FCA would make it public. However, if a farmer doesn't want to share this information, the lender can't try to figure it out on their own or use other methods to get it. The key point is that sharing this information is completely voluntary—farmers can't be penalized for refusing to provide it.

The bill essentially gives farm lenders a break from federal CFPB oversight and lets the FCA handle the rules instead. However, if a court later strikes down the CFPB's rule or Congress repeals it, then farm lenders won't have to follow these new FCA requirements either. This is a significant shift in who oversees lending practices in agriculture, moving that authority away from the CFPB and toward the FCA.

Farm Credit Administration Independent Authority Act

Finstad, Brad

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.&nbsp;The FCA must make the collected information available to the public on annual basis.&nbsp;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&nbsp;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.