What Counts as Discrimination?
Discrimination in farm loan applications is a grave issue that affects many people based on their race, sex, gender, political affiliation, or other characteristic. It strips families of the ability to work, produce and build generational wealth.
Discrimination can take various forms, such as:
Discrimination can take various forms, such as:
Loan Denials:Some loan officers or agents may reject a loan application based on discriminatory criterion, rather than on the applicant's creditworthiness or financial situation. This is especially unfair if the loan officer or agent favors someone they know or like over the applicant.
Unfair Loan Terms or Changes of Terms:Another way of discriminating is by imposing unfavorable or unreasonable terms on a loan, such as a high-interest rate, a short repayment period, or a large penalty fee. Alternatively, a loan officer or agent may change the terms of a loan without informing or obtaining consent from the applicant, which can affect their cash flow and ability to repay the loan.
Deferred or Delayed Loans:A loan officer or agent may also intentionally delay or postpone a loan application process, making the applicant wait for a long time or miss important deadlines. This can cause financial hardship for the applicant and prevent them from having a successful harvest season if they are a farmer.
Excessive Collateral:Another form of discrimination is requiring an excessive or unreasonable amount of collateral for a loan, such as property, equipment, or crops. This can discourage an applicant from applying for a loan or put them at risk of losing their assets if they default on the loan.
Insistence on a Loan Office Being Involved:A loan officer or agent may also interfere with an applicant's rights by insisting on being involved in every aspect of their farming operation, such as planting, harvesting, marketing, or selling. This can limit the applicant's autonomy and decision-making power.
Discouragement or Failure to Provide:The easiest ways for discrimination against a farmer to occur is to discourage them from applying for a loan or assistance or fail to provide information about the options that are available.