Pub. 13 2018-2019 Issue 2

WWW.NEBANKERS.ORG 24 To contact Bert Ely, email bert@ely-co.com , phone (703) 836-4101, or send mail to P.O. Box 320700, Alexandria, Va. 22320. If your bank belongs to the American Bankers Association (ABA), you can enjoy a free email subscription to Farm Credit Watch or you can read it monthly online at www.aba.com . To receive Farm Credit Watch by email or to manage your subscription, visit ABA Member Email Bulletins at www.aba.com/Tools/Ebulletins/Pages/ default.aspx. For other inquiries, please contact Barbara McCoy at the ABA at (800) BANKERS or bmccoy@aba.com. D A T A B U S I N E S S E Q U I P M E N T BRANCH I NNOVAT I ON FORUM SAVETHEDATE Tuesday, Oc tober 2nd, 2018 Embassy Suites - Downtown Lincoln 1040 P Street Lincoln, NE 68508 RSVP Today ! Reser ve your spot today by emailing Lauren at Lmiller@databusinessequipment.com CoBank has participated in, but these two companies are not utility cooperatives that CoBank supposedly lends to. Possibly CoBank would try to justify these credit extensions under the “similar entity” lending authority it has under the Farm Credit Act, but these two companies could readily have obtained credit from private-sector lenders. As noted in the previous article, commercial banks of all sizes play a key role in financing rural infrastructure, including providing credit to investor-owned utilities of all sizes. Regulators Ease Appraisal Requirement for Commercial Loans On April 2, the three bank regulatory agencies issued a joint press release announcing an increase, from $250,000 to $500,000, in the size of commercial real estate loans which do not require an appraisal by a licensed appraiser. The older limit had been in place since 1994. The new limit “will materially reduce regulatory burden and the number of transactions that require an appraisal.” Raising this ceiling will be especially beneficial for ag lenders given the shortage of appraisers in rural areas. For a commercial transaction under $500,000, banks can use “an evaluation rather than an appraisal [to] provide a market value estimate of the real estate pledged as collateral” for a loan. Such an evaluation will “not have to comply with the Uniform Standards of Professional Appraiser Practices.” Raising the loan size exempt from an appraisal will help to level the playing field between banks and the FCS, where FCS institutions have had greater flexibility in utilizing “col- lateral evaluation policies” that do not require the use of a licensed appraiser. Agriculture and all of rural America will benefit from the higher appraisal limit for commercial banks.  Farm Credit Watch — continued from page 23