On March 17, U.S. Reps. Ron Kind (D-Wis.) and Randy Feenstra (R-Iowa) introduced the Enhancing Credit Opportunities in Rural America (ECORA) Act. The bill would grant income earned on bank loans secured by agricultural real estate a tax exemption. It would also exempt taxable income from rural residential mortgages in communities of fewer than 2,500 people. Both provisions would allow bankers to offer more affordable credit to agricultural borrowers and better compete with Farm Credit lenders and credit unions.
The bill is similar to one signed into law in Kansas in February.
Similar versions of the ECORA Act have been introduced in the U.S. House before — in 2016, 2017, 2019 and 2020, respectively — but these bills have never come up for a vote. With Democratic Congressman Ron Kind as the main sponsor this year, as well as several Republican co-sponsors, the ECORA Act enjoys bipartisan support.
“I’ve heard from many Wisconsin lenders and farmers about a credit crunch for agricultural and rural loans, which has only gotten worse because of COVID,” Kind told Hoosier Ag Today. “The Act will take steps to address the issue, lowering the cost for farmers and families to acquire credit in our rural communities and providing a pathway to increased income.”
“As we continue to face the economic impacts of the pandemic, the introduction of ECORA is especially important to support the agricultural industry with tax exemptions that farm credit institutions already receive,” said Paul Kohler, president and CEO of Charter Bank, Eau Claire, Wis., who services as chair of the Wisconsin Bankers Association.
Both the American Bankers Association and the Independent Community Bankers of America support passage of the ECORA Act.