DENVER—Sen. Mark Udall says Agriculture Secretary Tom Vilsack has promised to look further into the problems of farmers and ranches hurt by the failure of New Frontier Bank in Greeley, but there’s no promise of help yet.
Udall, Sen. Michael Bennet and Rep. Betsy Markey, all Colorado Democrats, say the bank’s failure left many northeast Colorado dairy farmers struggling to find new sources of credit at a time when markets are tight.
They sent a letter last month asking Vilsack to consider shifting Colorado Farm Service Agency funds from a guaranteed loan program into one that offers farmers operating loans, so farmers can pay for fertilizer, seed and labor.
Udall says Vilsack’s reaction was polite in a conversation Friday. Udall plans to repeat his request when Vilsack visits northeast Colorado on Monday.
Regulators closed New Frontier Bank on April 10.
That came about four months after the Federal Deposit Insurance Corp. issued a cease and desist order for “unsafe” and “unsound” banking practices. Defaults on the bank’s mostly agricultural loans left it with shrinking capital to cover potential losses.
The FDIC worked to move depositors’ money to other banks, and it has extended about $2 million in credit to agriculture enterprises so they can meet expenses as growing season looms.
Nevertheless, the failure of New Frontier Bank left behind a need for about $700 million in credit for agricultural borrowers that other lenders in Weld County haven’t been able to provide, Udall, Markey and Bennet said in their letter.
“There is a lack of available credit, even for concerns that have long histories of being successfully run and operated,” Udall said Friday.
The Farm Service Agency has used federal stimulus money to generate about $682,500 in farm operating loans in Colorado.
Weld County had about $1.5 billion in agricultural products sold in 2007, ranking it tops among Colorado counties.
