GREELEY, Colo.—Northeast Colorado farmers and ranchers who borrowed millions of dollars from the now-closed New Frontier Bank don’t face a 30-day deadline to find alternate financing, federal regulators said Friday.
Some farmers and ranchers who relied on operating loans from New Frontier have said the Federal Deposit Insurance Corp. gave them 30 days to renegotiate after regulators shut the bank down.
In a statement released by three Colorado members of Congress, the FDIC said there is no 30-day deadline, but the statement didn’t say how much time borrowers do have.
FDIC officials in Washington did not immediately return calls.
New Frontier was closed on April 10, about four months after the FDIC issued a cease-and-desist order against the bank for “unsafe” and “unsound” practices. Defaults on the bank’s mostly agricultural loans left it with shrinking capital to cover potential losses.
The FDIC extended about $2 million in credit to agriculture enterprises so they could meet expenses as growing season looms.
But Colorado Sens. Mark Udall and Michael Bennet and Rep. Betsy Markey said the bank failure created a need for about $700 million in agricultural loans that other lenders haven’t been able to provide.
U.S. Secretary of Agriculture Tom Vilsack, who met with farmers and ranchers in Brush on Monday, said he freed up $253 million for operating loans that could help farmers searching for credit, but he said that it would be up to local banks to pick up New Frontier’s loans.
Colorado Agriculture Secretary John Stulp has said only $4 million of the bank’s $750 million loan portfolio has been purchased by other banks.
Udall, Bennet and Markey, all Democrats, have scheduled a meeting in Greeley on Saturday with FDIC officials, bank customers and others to discuss the muddle left by the failure.
