Fed monitoring banks' farm loans after detecting decline in quality

13 May 2019 9:47pm
The declining quality of some types of farm loans is drawing the attention of banking regulators, a US Federal Reserve report said.

“Changes in asset quality can highlight areas of potential concern that warrant further supervisory monitoring,” the Fed’s semi-annual financial stability report said last week. “One such area is the agricultural loan sector”.

Nonperforming loan ratios increased for farmland, agricultural production, credit cards and automobiles from the beginning of 2016 to the end of 2018, the report said. Subprime lending has increased in the credit card and auto sectors.