“Plain Language” Guide to Farm Service Agency Loans
July 27th, 2012
USDA’s Farm Service Agency (FSA) has issued a “plain language” guide to applying for FSA loans and FSA loan servicing entitled Your Guide to FSA Loans. USDA was required to issue the guide as a part of the settlement in the case Keepseagle v. Vilsack. This case was a class action lawsuit brought in 1999 by Native American farmers and ranchers who charged that USDA denied them the opportunities provided by FSA to white farmers to obtain FSA loans and also discriminated against Native Americans in servicing the loans.
The plaintiffs and USDA reached a settlement agreement approved in 2011 that included payments to Native American farmers and ranchers and other measures in addition to publication of the Guide. As noted by in the FSA notice of the Guide’s availability, the Guide is intended for use by any farm loan program applicants who want additional assistance in understanding the FSA loan programs.
NSAC welcomes the publication of this “plain language” guide, which provides a clear presentation of good and pertinent information. But we also have some recommendations for the revision of the Guide.
First, the Guide provides little information specific to loan program provisions for beginning farmers and ranchers and socially disadvantaged farmers and ranchers. A few more pages devoted to FSA loan program provisions and issues for these farmers and ranchers would be helpful. In the meantime, we recommend that readers look at our NSAC Grassroots Guide to the 2008 Farm Bill and to the Center for Rural Affairs’ Beginning Farmer and Rancher Opportunities website.
Reviewers of the Guide at Rural Advancement Foundation International-USA (RAFI) had some additional recommendations for improving the Guide:
➢ The Guide has good coverage of the issue of the timing of loan processing – an important issue in discrimination cases. But it could be improved by including better information on borrowers’ rights and what farmers or ranchers can do if they think an FSA loan is not being serviced properly by the local FSA office. For example, there should be a link in the Guide to a webpage that provides specific information on what to do if a farmer or rancher is unsatisfied with loan servicing. In general, the Guide should provide more information on borrower rights, and what farmers and ranchers can do if things are not going well in loan servicing.
➢ Another improvement would be to include more links to FSA web pages on the specific programs and to the regulations or statute at the end of the text for each topic. The more specific information that a farmer has walking into an FSA office about eligibility for FSA loans, the less of a chance there is for problems. This could all be done through links from the current electronic document.
➢ The Guide is weak on the explanation of collateral. Many new borrowers do not have a basic understanding of collateral and big problems can arise without that understanding. They may not realize the risks they take using assets such as their home for collateral. In addition, they may not understand that they will lose a certain amount of control over collateral such as animals and farm equipment that cannot be sold and must met FSA maintenance requirements, unless FSA consents to sale or maintenance conditions. Other issues include the fact that FSA may require 150 percent of the loan value in collateral and that if the value of the collateral falls below the value of the loan FSA can foreclose even if the borrower has not missed a payment
➢ In the resources section, the Guide should include foreclosure prevention resources that are available outside of FSA (for instance the housing programs that could apply to farmers) and more detailed information on how to avoid foreclosure.
➢ The Guide explains that loan funds are subject to appropriations and can run out, but this issue should be given more attention. The hints section should advise farmers to apply for loans as early as possible and to signup even if funds are not available when they apply, so that they are “in line” when funds become available.
Finally, NSAC recommends that USDA publish the Guide in Spanish, Hmong, and other languages that will make it more useful to all farmers and ranchers served by FSA. NSAC generally agrees with comments submitted by the by Hmong National Development, Inc. on FSA Microloan Program proposed rules that are relevant for many non-English speaking communities. These comments request that USDA:
➢ develop systems for gathering data on the ethnicity and languages spoken of all individuals encountered at FSA offices in order to identify the needs of an increasingly diverse population of farmers and ranchers;
➢ utilize regional demographic data in order to assess the needs of the various populations residing in those regions;
➢ adopt a plan for providing oral interpretation, including a standard procedure for utilizing telephone interpretation services when direct, in-person interpretation is not available;
➢ translate its program documents and other key documents and make them readily available and visible at the relevant local offices that serve diverse communities;
➢ translate its Organizational Chart and translate descriptions of all of the different Departments, programs, and the contact information for each program, in order to demystify the bureaucracy for community members;
➢ hire at least one staff person who is bilingual in languages at the offices where communities of non-English speakers reside or at least have trained interpreters on call via a Language Line service or other similar service;
➢ train FSA staff on issues of cultural sensitivity and diversity in the variety of those seeking FSA assistance; and
➢ engage in culturally appropriate outreach to diverse communities, including utilization of ethnic media outlets, to educate the communities of the other programs and language services that are available.