II 

118TH CONGRESS 

1ST SESSION S. 2668 

To amend the Consolidated Farm and Rural Development Act to reform 

farm loans, to amend the Department of Agriculture Reorganization 

Act of 1994 to reform the National Appeals Division process, and for 

other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 27, 2023 

Mrs. GILLIBRAND (for herself and Mr. FETTERMAN) introduced the following 

bill; which was read twice and referred to the Committee on Agriculture, 

Nutrition, and Forestry 

A BILL 

To amend the Consolidated Farm and Rural Development 

Act to reform farm loans, to amend the Department 

of Agriculture Reorganization Act of 1994 to reform 

the National Appeals Division process, and for other 

purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Fair Credit for Farm5 ers Act of 2023’’. 


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1 SEC. 2. DEFERMENT OF PAYMENTS FOR BORROWERS OF 

2 FARM LOANS. 

3 (a) DEFINITIONS.—In this section: 

4 (1) ECONOMICALLY DISTRESSED FARMER OR

5 RANCHER.—The term ‘‘economically distressed 

6 farmer or rancher’’ means a farmer or rancher that 

7 is— 

8 (A) delinquent, as described in the defini9 tion of the term ‘‘delinquent borrower’’ in sec10 tion 761.2(b) of title 7, Code of Federal Regu11 lations (or successor regulations); 

12 (B) financially distressed, as described in 

13 the definition of the term ‘‘financially distressed 

14 borrower’’ in section 761.2(b) of title 7, Code of 

15 Federal Regulations (or successor regulations); 

16 or 

17 (C) a borrower of a direct farm loan who 

18 is unable to develop a feasible plan (as defined 

19 in section 761.2(b) of title 7, Code of Federal 

20 Regulations (or successor regulations)) for the 

21 current or next production cycle with current 

22 available rates and terms. 

23 (2) ELIGIBLE BORROWER.—The term ‘‘eligible 

24 borrower’’ means a borrower that— 

25 (A) is an economically distressed farmer or 

26 rancher; and 


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1 (B) did not receive assistance under sec2 tion 22006 of Public Law 117–169 (commonly 

3 known as the ‘‘Inflation Reduction Act’’). 

4 (3) FARM LOAN.— 

5 (A) IN GENERAL.—The term ‘‘farm loan’’ 

6 means a direct or guaranteed— 

7 (i) farm ownership loan under subtitle 

8 A of the Consolidated Farm and Rural De9 velopment Act (7 U.S.C. 1922 et seq.); 

10 (ii) operating loan under subtitle B of 

11 that Act (7 U.S.C. 1941 et seq.); or 

12 (iii) emergency loan under subtitle C 

13 of that Act (7 U.S.C. 1961 et seq.). 

14 (B) INCLUSION.—The term ‘‘farm loan’’ 

15 includes direct microloans of any type of loan 

16 described in clauses (i) through (iii) of subpara17 graph (A). 

18 (4) HISTORICALLY UNDERSERVED FARMER OR

19 RANCHER.—The term ‘‘historically underserved 

20 farmer or rancher’’ means— 

21 (A) a limited resource farmer or rancher, 

22 as determined by the Secretary; 

23 (B) a socially disadvantaged farmer or 

24 rancher (as defined in section 2501(a) of the 


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1 Food, Agriculture, Conservation, and Trade Act 

2 of 1990 (7 U.S.C. 2279(a))); 

3 (C) a beginning farmer or rancher (as de4 fined in that section); and 

5 (D) a veteran farmer or rancher (as de6 fined in that section). 

7 (5) SECRETARY.—The term ‘‘Secretary’’ means 

8 the Secretary of Agriculture. 

9 (b) DEFERMENT OF PAYMENTS ON DIRECT FARM

10 LOANS.—The Secretary shall— 

11 (1) defer payments of principal and interest due 

12 on direct farm loans by eligible borrowers during the 

13 2-year period beginning on the date of enactment of 

14 this Act; and 

15 (2) extend the date required for repayment of 

16 direct farm loans by eligible borrowers subject to 

17 deferment under paragraph (1) by not less than 2 

18 years after the end of the period described in that 

19 paragraph. 

20 (c) ZERO PERCENT INTEREST.—The Secretary shall 

21 modify each direct farm loan of an eligible borrower that 

22 is outstanding as of the date of enactment of this Act such 

23 that the interest rate on the farm loan is zero percent dur24 ing the 2-year period beginning on that date of enactment. 


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1 (d) WAIVER OF GUARANTEED FARM LOAN FEES FOR

2 HISTORICALLY UNDERSERVED FARMERS AND RANCH3 ERS.—The Secretary shall require lenders of guaranteed 

4 farm loans to historically underserved farmers or ranchers 

5 to waive borrower fees on those loans during the period— 

6 (1) beginning on the date of enactment of this 

7 Act; and 

8 (2) ending not earlier than 2 years after that 

9 date of enactment. 

10 SEC. 3. FARM LOAN REFORM. 

11 (a) IN GENERAL.—Subtitle D of the Consolidated 

12 Farm and Rural Development Act is amended by inserting 

13 after section 374 (7 U.S.C. 2008i) the following: 

14 ‘‘SEC. 375. FARM LOAN REFORM. 

15 ‘‘(a) DEFINITIONS.—In this section: 

16 ‘‘(1) ADVERSE DECISION.—The term ‘adverse 

17 decision’ has the meaning given the term in section 

18 271 of the Department of Agriculture Reorganiza19 tion Act of 1994 (7 U.S.C. 6991). 

20 ‘‘(2) FARM LOAN.—The term ‘farm loan’ means 

21 a loan administered by the Farm Service Agency 

22 under subtitle A or B. 

23 ‘‘(3) PRINCIPAL RESIDENCE.—The term ‘prin24 cipal residence’ means the principal residence of a 


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1 borrower of a farm loan, including adjoining land of 

2 not more than 10 acres. 

3 ‘‘(b) DETERMINATION LETTERS AND ADVERSE DE4 CISIONS.— 

5 ‘‘(1) IN GENERAL.—In the case of any adverse 

6 decision relating to a farm loan, a Farm Service 

7 Agency program benefit, or the noninsured crop dis8 aster assistance program established by section 196 

9 of the Federal Agriculture Improvement and Reform 

10 Act of 1996 (7 U.S.C. 7333), the Secretary shall in11 clude in a determination letter provided to the appli12 cant, to the maximum extent practicable— 

13 ‘‘(A) a description of each reason known, 

14 or that reasonably should have been known, to 

15 the Secretary for that adverse decision; 

16 ‘‘(B) a reference to each regulation, and 

17 Farm Loan Program handbook instruction, 

18 with the maximum practicable specificity, that 

19 forms the basis for each reason described in 

20 subparagraph (A); and 

21 ‘‘(C) instructions for accessing the Elec22 tronic Code of Federal Regulations and Farm 

23 Loan Program handbook instructions online. 

24 ‘‘(2) EFFECT OF FAILURE TO STATE REA25 SONS.—If the Secretary issues any adverse decision 


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1 relating to an application for a farm loan, a Farm 

2 Service Agency program benefit, or the noninsured 

3 crop disaster assistance program established by sec4 tion 196 of the Federal Agriculture Improvement 

5 and Reform Act of 1996 (7 U.S.C. 7333) and does 

6 not include in a determination letter provided to the 

7 applicant a reason known to the Secretary for that 

8 adverse decision, the Secretary may not subsequently 

9 issue an adverse decision to that applicant on the 

10 basis of the same reason, unless the circumstances 

11 of the applicant have substantially changed since the 

12 issuance of the prior adverse decision. 

13 ‘‘(c) COLLATERALIZATION.— 

14 ‘‘(1) ORIGINATION.—The Secretary may only 

15 secure a direct farm loan with a principal residence 

16 if the total value of other assets available to secure 

17 the farm loan does not provide adequate security (as 

18 defined in section 761.2(b) of title 7, Code of Fed19 eral Regulations (or successor regulations)) for the 

20 loan. 

21 ‘‘(2) PARTIAL RELEASE OF PRINCIPAL RESI22 DENCE SECURITY.—In the case of a farm loan se23 cured in part by a principal residence, the Secretary 

24 shall initiate a partial release of the principal resi25 dence as security in accordance with subpart H of 


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1 part 765 of title 7, Code of Federal Regulations (or 

2 successor regulations), without any action required 

3 by the borrower, when the total value of other assets 

4 securing the farm loan is equal to 100 percent of the 

5 remaining loan amount. 

6 ‘‘(3) LOAN SERVICING.— 

7 ‘‘(A) IN GENERAL.—In the case of a farm 

8 loan borrower who is delinquent prior to re9 structuring the farm loan, the borrower shall 

10 execute and provide to the Secretary a lien on 

11 assets necessary to achieve not more than 100 

12 percent collateralization of the loan value. 

13 ‘‘(B) BEST LIEN.—Except as provided in 

14 section 764.106 of title 7, Code of Federal Reg15 ulations (or successor regulations), the Sec16 retary shall take the best lien obtainable on as17 sets described in subparagraph (A), subject to 

18 the condition that a primary residence shall be 

19 the last option available to the Secretary to 

20 achieve 100 percent collateralization of the loan 

21 value. 

22 ‘‘(4) PROHIBITION ON ADDITIONAL SECU23 RITY.—The Secretary may not secure a direct farm 

24 loan with any property that provides security in exVerDate Sep 11 2014 05:11 Aug 19, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2668.IS S2668

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1 cess of the amount of security value equal to the 

2 loan amount. 

3 ‘‘(d) ELIGIBILITY REQUIREMENTS.—The Secretary 

4 shall not impose any limitation relating to the number of 

5 years in which a farm loan may be closed by a borrower.’’. 

6 (b) REFINANCING OF DEBT WITH FARM LOANS.— 

7 (1) PURPOSES OF FARM OWNERSHIP LOANS.— 

8 Section 303(a)(1) of the Consolidated Farm and 

9 Rural Development Act (7 U.S.C. 1923(a)(1)) is 

10 amended by striking subparagraph (E) and inserting 

11 the following: 

12 ‘‘(E) refinancing indebtedness.’’. 

13 (2) PURPOSES OF OPERATING LOANS.—Section 

14 312(a) of the Consolidated Farm and Rural Devel15 opment Act (7 U.S.C. 1942(a)) is amended by strik16 ing paragraph (9) and inserting the following: 

17 ‘‘(9) refinancing the indebtedness of a borrower; 

18 or’’. 

19 (c) REMOVAL OF ELIGIBILITY RESTRICTION BASED

20 ON PREVIOUS DEBT WRITE-DOWN OR OTHER LOSS.— 

21 Section 373 of the Consolidated Farm and Rural Develop22 ment Act (7 U.S.C. 2008h) is amended— 

23 (1) in subsection (b)(2)(A)— 

24 (A) by striking clause (i); 


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1 (B) in clause (ii), by striking ‘‘chapters 11, 

2 12, or 13 of Title 11 of the’’ and inserting 

3 ‘‘chapter 11, 12, or 13 of title 11,’’; and 

4 (C) by redesignating clauses (ii) and (iii) 

5 as clauses (i) and (ii), respectively; and 

6 (2) by striking subsection (c) and inserting the 

7 following: 

8 ‘‘(c) PROHIBITION ON ELIGIBILITY RESTRICTION

9 BASED ON DEBT WRITE-DOWN OR OTHER LOSS.—The 

10 Secretary shall not restrict the eligibility of a borrower for 

11 a farm ownership or operating loan under subtitle A or 

12 B based on a previous debt write-down or other loss to 

13 the Secretary.’’. 

14 (d) EQUITABLE RELIEF.—Section 366 of the Con15 solidated Farm and Rural Development Act (7 U.S.C. 

16 2008a) is amended— 

17 (1) in subsection (a)— 

18 (A) in paragraph (1), by striking ‘‘(1) re19 ceived’’ and inserting ‘‘(1)(A) received’’; 

20 (B) in paragraph (2)— 

21 (i) by striking the period at the end 

22 and inserting ‘‘; or’’; and 

23 (ii) by striking ‘‘(2) the Secretary’’ 

24 and inserting ‘‘(B) the Secretary’’; and 

25 (C) by adding at the end the following: 


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1 ‘‘(2)(A) received a benefit under any other pro2 gram administered by an agency (as defined in sec3 tion 271 of the Department of Agriculture Reorga4 nization Act of 1994 (7 U.S.C. 6991)); and 

5 ‘‘(B) the Secretary determines is not in compli6 ance with the requirements of the provisions of law 

7 that authorize that program.’’; 

8 (2) in subsection (b)(2), by inserting ‘‘, includ9 ing having made management or financial decisions 

10 for the farming or ranching operation of the farmer 

11 or rancher that were detrimental due to the erro12 neous nature of an official communication from the 

13 Department of Agriculture, regardless of whether a 

14 financial benefit was received or only promised’’ be15 fore the period at the end; 

16 (3) in subsection (c)(1), by striking ‘‘(a)(2)’’ 

17 and inserting ‘‘(a)(1)(B)’’; 

18 (4) in subsection (e), by striking ‘‘section’’ in 

19 the matter preceding paragraph (1) and all that fol20 lows through ‘‘shall not be’’ in paragraph (2) and in21 serting ‘‘section shall be’’; and 

22 (5) by adding at the end the following: 

23 ‘‘(f) AUTHORITY OF NATIONAL APPEALS DIVISION

24 ADMINISTRATIVE JUDGES.— 


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1 ‘‘(1) IN GENERAL.—An Administrative Judge 

2 of the National Appeals Division may provide equi3 table relief under this section. 

4 ‘‘(2) REVIEW.—The Secretary may review a de5 cision of an Administrative Judge to grant equitable 

6 relief pursuant to paragraph (1). 

7 ‘‘(g) CASES IN WHICH AN APPLICANT IS ELIGI8 BLE.— 

9 ‘‘(1) DEFINITIONS.—In this subsection: 

10 ‘‘(A) ADVERSE DECISION.—The term ‘ad11 verse decision’ has the meaning given the term 

12 in section 271 of the Department of Agriculture 

13 Reorganization Act of 1994 (7 U.S.C. 6991). 

14 ‘‘(B) APPLICANT.—The term ‘applicant’ 

15 means a person who submitted to the Farm 

16 Service Agency an application for— 

17 ‘‘(i) a direct farm ownership, oper18 ating, or emergency loan under this title; 

19 ‘‘(ii) a Farm Service Agency program 

20 benefit; or 

21 ‘‘(iii) the noninsured crop disaster as22 sistance program established by section 

23 196 of the Federal Agriculture Improve24 ment and Reform Act of 1996 (7 U.S.C. 

25 7333). 


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1 ‘‘(2) DENIAL BASED ON FEASIBILITY.— 

2 ‘‘(A) IN GENERAL.—A loan applicant shall 

3 be eligible for equitable relief under this section 

4 if— 

5 ‘‘(i) the National Appeals Division de6 termines that the Farm Service Agency 

7 was in error in denying the loan, benefit, 

8 or payment based on feasibility; 

9 ‘‘(ii) the National Appeals Division 

10 has confirmed the accuracy of the pro11 jected income and projected expenses de12 scribed in the original application sub13 mitted by the applicant; and 

14 ‘‘(iii) the original application sub15 mitted by the applicant is no longer fea16 sible due to the delay caused by the erro17 neous denial by the Farm Service Agency 

18 and the length of the appeals process. 

19 ‘‘(B) AMOUNT.—The amount of equitable 

20 relief under subparagraph (A) shall be the 

21 amount equal to the difference between— 

22 ‘‘(i) the projected income described in 

23 the application; and 

24 ‘‘(ii) the projected expenses described 

25 in the application. 


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1 ‘‘(3) DENIAL BASED ON ELIGIBILITY.—A loan 

2 applicant shall be eligible for equitable relief under 

3 this section if— 

4 ‘‘(A) feasibility was not listed as a reason 

5 for an adverse decision in the determination let6 ter provided to the applicant; 

7 ‘‘(B) eligibility was listed as a reason for 

8 an adverse decision in the determination letter 

9 provided to the applicant; 

10 ‘‘(C) the National Appeals Division deter11 mines that the Farm Service Agency was in 

12 error in denying the loan based on eligibility; 

13 and 

14 ‘‘(D) the original application submitted by 

15 the applicant is no longer feasible due to the 

16 delay caused by the erroneous denial by the 

17 Farm Service Agency and the length of the ap18 peals process. 

19 ‘‘(4) SUBSEQUENTLY WITHDRAWN ADVERSE

20 DECISION.—An applicant shall be eligible for equi21 table relief under this section if— 

22 ‘‘(A) the Farm Service Agency issued an 

23 adverse decision on an application that the 

24 Farm Service Agency subsequently withdrew; 

25 and 


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1 ‘‘(B) the original application submitted by 

2 the applicant is no longer feasible due to the 

3 delay caused by the adverse decision. 

4 ‘‘(5) PROMISED PROGRAM BENEFITS NOT RE5 CEIVED.—An applicant shall be eligible for equitable 

6 relief under this section if— 

7 ‘‘(A) the Farm Service Agency indicated in 

8 an official communication made after the date 

9 of enactment of this subsection that the appli10 cant could expect the loan, benefit, or payment, 

11 and then reversed its decision; and 

12 ‘‘(B) the applicant acted in good faith.’’. 

13 SEC. 4. NATIONAL APPEALS DIVISION REFORM. 

14 (a) BURDEN OF PROOF.—Section 277(c)(4) of the 

15 Department of Agriculture Reorganization Act of 1994 (7 

16 U.S.C. 6997(c)(4)) is amended— 

17 (1) by striking ‘‘The appellant’’ and inserting 

18 the following: 

19 ‘‘(A) IN GENERAL.—Except as provided in 

20 subparagraph (B), the appellant’’; and 

21 (2) by adding at the end the following: 

22 ‘‘(B) APPELLANTS BELOW INCOME

23 THRESHOLD.— 

24 ‘‘(i) IN GENERAL.—In the case of an 

25 appellant described in clause (ii), the agenVerDate Sep 11 2014 05:11 Aug 19, 2023 Jkt 039200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6201 E:\BILLS\S2668.IS S2668

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1 cy shall bear the burden of proving by sub2 stantial evidence that the adverse decision 

3 of the agency was not erroneous. 

4 ‘‘(ii) APPELLANTS DESCRIBED.—An 

5 appellant referred to in clause (i) is an ap6 pellant— 

7 ‘‘(I) the adjusted gross income of 

8 which for the previous year is not 

9 more than $300,000; or 

10 ‘‘(II) the average annual adjusted 

11 gross income of which for the previous 

12 5-year period is not more than 

13 $300,000.’’. 

14 (b) IMPLEMENTATION.—Section 280 of the Depart15 ment of Agriculture Reorganization Act of 1994 (7 U.S.C. 

16 7000) is amended— 

17 (1) by redesignating subsection (b) as sub18 section (c); and 

19 (2) by inserting after subsection (a) the fol20 lowing: 

21 ‘‘(b) REQUIREMENT.—In implementing a final deter22 mination in accordance with subsection (a), the head of 

23 an agency shall use the information used by the Division 

24 to make the final determination, without requiring addiVerDate Sep 11 2014 05:11 Aug 19, 2023 Jkt 039200 PO 00000 Frm 00016 Fmt 6652 Sfmt 6201 E:\BILLS\S2668.IS S2668

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1 tional information, except as otherwise provided in the de2 cision letter relating to the final determination.’’. 

Æ 


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