Debt relief for Black farmers raises ire of banks, who are demanding to be compensated for lost interest revenue
A provision in the latest Covid-19 relief bill is set to provide $4 billion in debt relief to farmers of color, an attempt to acknowledge the government’s history of discriminatory lending practices. One group that isn’t happy about that? Banks, reports The New York Times. After all, lenders make interest off of loans, as well as from selling them to secondary buyers (like other banks). If the government pays off $4 billion in debt held by farmers in one fell swoop—as the American Rescue Plan passed in March directed the U.S. Department of Agriculture (USDA) to do—those long-term revenue streams evaporate. Annoying, right? Banks seem to think so. They’re calling on the federal government to allocate extra money to lenders, in order to “[compensate] for lost income due to these loan payoffs,” according to a letter addressed to USDA from three banking associations.