From our President and CEO
ECORA: Te Key to Lowering Ag Borrowing Costs
Max Cook, President and CEO Missouri Bankers Association
I’m going to set that silliness aside at this time and congratulate the Kansas Bankers Association on the passage and enactment of the state’s version of ECORA … the Enhancing Credit Opportunities in Rural America Act. Tis is the name given to federal legislation that was introduced in Congress in 2019, 2020 and now in 2021. More on that in a minute.
Kansas adopted its own version of the federal ECORA proposal, and the most important language in the bill follows.
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Suffice it to say, when this was signed aſter three hard fought years of work, there was a celebration in Topeka and across Kansas. In addition, I received numerous calls and emails from Missouri bankers asking if MBA has plans to pursue similar legislation. Te answer is yes. It is our intention to have legislation introduced in next year’s session of the Missouri General Assembly similar to the Kansas measure and/ or the proposed federal legislation.
On the federal front, ECORA was re-introduced in the U.S. House in
mid-March by Reps. Ron Kind, D-Wisc., and Randy Feenstra, R-Iowa. A companion bill is likely to be introduced in the U.S. Senate at any time. More important, this is bipartisan legislation!
Te measure would remove taxation on income from farm real estate loans and rural single-family home loans that are made by financial institutions insured by the Federal Deposit Insurance Corporation. Removing the taxation results in a lower cost to making a farm or ranch real estate loan, with the savings passed on to the customer. It is estimated that a federal ECORA could reduce the average interest rate on a farm and ranch real estate loan by 1.5% to 2%! Tink of what that rate could be if both state and federal ECORA legislation passed. Tis is a great solution to help farmers and ranchers during these times of lower farm incomes. For the banking community, hopefully we can better
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