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Help! We need action.

Mar 17, 2021

BANK LOBBY CONTINUE THE PUSH FOR CENTRAL FILING IN IOWA

SF 486 would create a central filing system for all farm products-- crops grown, growing or to be grown including crops produced on trees, vines and bushes, aquatic goods produced in aquacultural operations, livestock, supplies used or produced in farming operation or products of crops or livestock in their unmanufactured states. (As defined in Iowa code 554.9102)

PLEASE CONTACT YOUR STATE SENATORS 
and ask them to tell leadership this is a bad bill for agriculture
 
Find your Senators HERE
If you have cooperatives in other districts you may use this list to find legislators based on county HERE
Feel free to use the following summary for your e-mail or phone conversations: 
 
Senator _____________, 
 
I'm asking for you to reach out to Senate Leadership to connect them with the negative impact SF 486- Central Filing, would have on our agricultural economy. 
Moving Iowa from a Direct Notice system to Central Filing creates several issues. 
 
  • Central filing is not more effective than the direct notice system we have in Iowa.
    • Central Filing: 65-70% of farmers in NE and SD get two or more names on payments
    • Direct Notice: Less than 5% of farmers in Iowa get two or more names on payments
    • The system we have works
 
  • Direct notice is a process where the lender sends a notice/receipt to all delivery locations a farmer has noted on his loan documents so that those buyers put their name on the check that’s written to the farmer
    • Today “receipts” are sent from lenders via fax, certified mail or e-mail
    • Iowa law can be amended to specifically allow for electronic communication through the existing direct notice system referenced in 7 U.S.C. 1631, subsection (f)
 
  • Negative impact to cash flow for the farmer—costing them time and money
    • Farmers with more than one name on their payment will receive a paper check—no more ACH
    • Some buyers will go from writing checks multiple times a week to ONCE a week, to streamline the manual process of checking each payment transaction
    • Legislation proposed does not include parameters limiting or minimizing the number of Effective Financing Statements created by lenders, no matter what bank lobbyists have said. How do we guarantee that Iowa’s farmers will not be more encumbered by central filing? 
 
  • Central Filing would mean a shift of burden from bankers to buyers
    • Will increase cost of doing business for those buyers including: 
    • Annual access fee to a Secretary of State system
    • Pay overtime and/or hire more employees to manually check the central filing system for each payment transaction
    • Banks continue to make money on their loans as others monitor assets
 
We would ask that you express the negative impact of SF 486 to leadership, in support of our agricultural community. 
 
Thank you, 
-YOUR NAME HERE



SUPPORTING INFORMATION
 
Opposing Central Filing:
1.  Iowa Institute for Cooperatives
2.  Agribusiness Association of Iowa
3.  Iowa Farm Bureau Federation
4.  Iowa Corn Growers Association
5.  Iowa Soybean Association
6.  Iowa State Dairy Association
7.  Iowa Pork Producers Association
8.  Iowa Cattlemen's Association
9.  Iowa Poultry Association
10.  Iowa Farmers Union
11.  Cargill
12.  Corteva
 
Supporting Central Filing:
1.  Wells Fargo
2.  Iowa Bankers Association
3.  Community Bankers of Iowa

 
Addressing inaccurate statements:
  1. "Today most farmers own semis, they can deliver grain anywhere and bankers cannot begin to deliver paper notices to every possible buyer."
    1. Farmers that deliver locations outside of those listed on their bank documents are committing FRAUD. How many farmers have been prosecuted for this in Iowa?
  2. "Co-ops did not want to work with lenders on the issue."
    1. We spoke with bank lobbyists on central filing multiple times and were misled throughout those conversations. We continue to ask for a taskforce of stakeholders to examine ways to improve the existing system. 
  3. "Paper notice (Direct Notice) is inferior to electronic notice (Central Filing)." 
    1. We could make the existing Direct Notice system better, but bank lobbyists have not been transparent about what they actually want-- not an updated system, but a system bankers can use to minimize their farmer relationships, file paperwork without notice, and continue making record profits as every other buyer manages the bankers collateral.

Please reach out if you have any feedback you would like to share. Thank you to the folks that have already reached out and continue to share information with us. 

Thank you especially for your time and dedication, we can't do this without you!
 
Katie P. Hall 
Director of Government Affairs
C: 712-269-9838
 
Kristi Habben 
CFE Credit Manager
khabben@coopfe.com
O: 712-451-6280

 


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