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Ag bankers want Congress to approve ECORA tax interest exclusion

Agricultural bankers want Congress to move the Enhancing Credit Opportunities in Rural America Act forward, but they say Congress appears to have other priorities right now.

Ed Elfmann is the Senior Vice President for Ag and Rural Banking Policy at the American Bankers Association, and says, “It’s going to be a lot of appropriations keeping the government open. It’s going to be all of the impeachment stuff, so getting something through a process and over the finish line will be tough but not impossible.”

Elfmann says this legislation would lower the tax rate on banks when they do agricultural real estate lending. “This is a good thing for farmers because what it will do for farmers, it will help lower their interest rates, it will make banks more competitive with their competitors across the industry and frankly, when we’re in a time where twelve hundred dollars in interest can make a difference for somebody, lowering their interest rate is a good thing.”

The Enhancing Credit Opportunities in Rural America Act has stalled since being referred to the House Ways and Means Committee in March, and the Senate Committee on Finance in May.

If passed and signed into law, the legislation known as ECORA would exclude from gross income interest received on certain loans secured by agricultural real property.  The Senate bill has support from Republicans including Pat Roberts and Jerry Moran from Kansas, Rand Paul from Kentucky, and Mike Rounds of South Dakota.  The House bill is backed by Republicans including Jim Banks of Indiana, James Comer Jr. of Kentucky, Ron Estes from Kansas, Steve King from Iowa, Roger Marshall from Kansas, John Moolenaar from Michigan, and Virginia Democrat Jeff Van Drew.

The Ag Banker’s Conference is underway this week in Dallas, Texas.