U.S. Senator John Cornyn (R), joined by Senator Tim Kaine (D-VA), has introduced the Farm Credit Adjustment Act, legislation that would allow low-risk farm credit institutions to be audited every 24 months instead of every 18 months, reducing regulatory costs and administrative burdens.
What does the Farm Credit Adjustment Act do?
The Farm Credit Adjustment Act would give the Farm Credit Administration (FCA) the authority to extend examination schedules for low-risk Farm Credit System institutions from the current mandatory 18-month cycle to as long as 24 months.
The legislation would not require longer audit intervals. Instead, it would allow the FCA to determine which institutions qualify as low risk and whether an extended examination schedule is appropriate.
According to the bill's sponsors, the change would help reduce regulatory burdens and costs while allowing farm credit institutions to focus more resources on serving farmers, agricultural businesses, and rural communities.
Why are lawmakers proposing the change?
Under current law, the Farm Credit Act of 1971 requires the FCA to examine all Farm Credit System institutions every 18 months.
Supporters of the legislation argue that these audits can create operational burdens for low-risk institutions and often occur during critical periods when agricultural producers rely on financing for seasonal operations, including spring planting.
The bill's sponsors say providing greater flexibility could improve service delivery without limiting the FCA's oversight authority.
What lawmakers are saying
Sen. John Cornyn: "Farmers are the backbone of our country, and it's imperative that their operations are not held up by burdensome or arbitrary federal regulations."
Sen. Tim Kaine: "Agriculture is Virginia's largest private industry - making farms and our farmers an indispensable pillar of our economy."
Key details
- Extends potential audit schedules from 18 months to 24 months.
- Applies only to institutions deemed low risk by the FCA.
- Maintains FCA authority to conduct more frequent examinations when necessary.
- Aims to reduce compliance costs and regulatory burdens.
- Seeks to improve service capacity for farmers and rural borrowers.
What happens next?
The legislation has been introduced in the Senate by Sens. Cornyn and Kaine. In the House of Representatives, the measure is being led by Representatives Eugene Vindman (D-VA) and Pat Fallon (R-TX).
The bill must now advance through the legislative process in both chambers before it can be sent to the president for consideration.
