Farmers and ranchers demand help with failed bank
BRUSH, Colo. (AP)--Angry farmers and ranchers on May 11 demanded help from the federal government after a major agricultural bank collapsed, forcing them to renegotiate millions of dollars of loans in less than a month.
U.S. Secretary of Agriculture Tom Vilsack said he freed up $253 million for operating loans that could help farmers searching for credit after federal regulators shut down the New Frontier Bank in Greeley last month, but he added that it will be up to other local banks to jump in and pick up those loans.
He said banks are still hesitant to provide agricultural loans, despite the federal stimulus program.
"They've got to get back in the game," Vilsack told about 300 people who attended a town hall meeting at the Morgan County Fairgrounds.
Gary Teague, a 42-year-old rancher who runs a cattle feeding and heifer development operation based in Fort Morgan, tearfully told Vilsack thousands of farmers and ranchers are desperate after the Greeley bank collapsed. He said he runs a $50 million business that employs 155 people and the Federal Deposit Insurance Corp. has given him 30 days to renegotiate his loans or they will be liquidated.
"I don't need a bailout. What I do need is a bank," he said.
Vilsack said he will call bank regulators and "see if we can buy some time," but he's powerless to order banks to lend money.
Colorado Agriculture Secretary John Stulp said state regulators are doing what they can, but he said the FDIC is not working with the bank on interim loans.
"They made it clear they're here to close down the bank," Stulp said.
In a letter to Colorado's congressional delegation, Stulp said the state learned that only $4 million of the bank's $750 million loan portfolio has been purchased.
Vilsack said the $253 million in operating loans will help about 1,900 family farmers with direct financial assistance and 620 family farmers with guaranteed operating loans.
Stulp said the federal Farm Services Agency needs to continue to provide help.
He said the FDIC has offered to provide office space to the Farm Services Administration to help borrowers, "but the FDIC has its limits and the borrowers are approaching those limits rapidly."
"FDIC is not a bank and is not a substitute for refinancing," Stulp said.