Opinion ID: 444627
Heading Depth: 2
Heading Rank: 1

Heading: The Agricultural Purpose Exemption

Text: 6 The purpose of the Truth in Lending Act is to provide consumers with meaningful disclosure of credit terms to promote the informed use of credit and to protect consumers from unfair credit practices. 15 U.S.C. Sec. 1601(a); Hickman v. Cliff Peck Chevrolet, Inc., 566 F.2d 44, 46 (8th Cir.1977). Currently, the Act exempts from coverage [c]redit transactions [regardless of amount] involving extensions of credit primarily for business, commercial, or agricultural purposes. 15 U.S.C. Sec. 1603(1). Prior to October 1, 1982, section 1603(5) exempted from coverage loans obtained primarily for agricultural purposes in which the total amount to be financed exceeds $25,000. 7 Twenty-five of the thirty-one loans are excluded from coverage by the Act's agricultural-purpose exemption. It is clear from the complaint that all of the loans involved in this action were made for agricultural purposes. The Olsons state that they are members of the greatest industry in this nation, American Agriculture. Exhibits list the collateral for most of the loans as livestock, feed, and equipment used in farming. The exhibits also include agricultural financing statements and an application for a disaster loan from the SBA due to drought. In addition, the first count of the complaint names the agricultural loan officer of Norwest as an individual defendant, and he is listed as the bank officer on all but two of the Norwest promissory notes. Because the loans were made for agricultural purposes, they are, with a few exceptions, clearly exempt from coverage under the agricultural-purpose exemption. Six of the thirty-one loans involved in this action were consummated prior to October 1, 1982, and involved amounts less than $25,000. Only these loans are not subject to the agricultural-purpose exemption.