The 2026 CRA NPR proposes a concept called “Major Product Line” (“MPL”) that potentially would eliminate the CRA examination of small farm lending by major small farm lenders. The concept, proposed by regulators as a form of regulatory "relief", would limit CRA examinations to the two most active loan products offered by a bank. The products include HMDA-reported mortgages, small business loans, small farm loans, and consumer loans.
A review of the 2024 HMDA and CRA-reported lending activity indicates that for most banks, residential mortgages and small business loans far exceed the number of small farm loans. Lenders reported almost 6.2 Million mortgages originated during 2024. FDIC- and OCC-regulated CRA-reporters extended almost 8.5 million small business loans but only a little more than 162 thousand small farm mortgages. Clearly, small farm lending is dwarfed by residential mortgages and small business loans - and that justifies concern about how often small farm loans would qualify as an MPL and be subject to CRA examination.
A dramatic comparison can be seen in the graphs below that compare small business and small farm lending.
The average number of small business loans by lender was 16,033 compared to only 503 small farm loans per lender.
Even when compared based on the median number of loans the contrast is dramatic as can be seen in the graphs below:
These numbers would leave one to wonder what the impact of the MPL concept will be on CRA performance evaluations. It certainly would suggest that small farm lending often would not qualify as a major product line and therefore would not be examined during a CRA exam.
A review of the top 2024 small farm lenders appears to confirm that small farm lending may not be examined under the major product line concept for the most active small farm lenders because the volume of their small business loans far exceeds the volume of small farm loans in 6 of the top 7 small farm lenders. This shows that under Option 1, at the institutional level, the MPL concept would disqualify small farm loans from CRA examinations of many of the most active small farm lenders.
GeoDataVision followed up on this analysis by reviewing the CRA Public Performance Evaluations for 6 of the 7 lenders with high volumes of small business loans relative to small farm loans. That review identified only 3 assessment areas in which the lender’s small farm lending would qualify under the MPL concept when compared to the lender’s small business and HMDA-reported lending.
The foregoing data appears to confirm the suspicion that many of the biggest and most active small farm lenders will not have their small farm lending scrutinized by examiners during a CRA exam. Effectively, the major product line concept would relegate small farm lending to second class status, a highly undesirable result for markets where agriculture may be the dominant economic sector.
If the major product line concept is adopted it should be applied at the assessment area level under Option 2 for implementing the MPL concept, not the institution level as proposed under Option 1. But even that may not resolve the problem because, as we discovered after reviewing the CRA performance evaluations of the #2 to #7 leading small farm lenders, even for the most active small farm lenders their small farm lending often may not qualify as a MPL. Again, the data captured in those CRA public evaluations indicated that small farm loans would have qualified as a major product line in only 3 assessment areas!
The major reason given by regulators for the major product line concept was to provide a form of regulatory relief. But any lender engaged in a significant volume of small farm lending (such as lenders #2 through 7 above) would still be required to capture and report all their small farm lending. So, the relief provided by adoption of the major product line concept may be illusory, perhaps non-existent.
Regulators may want to reconsider their proposal to adopt the major product line concept. The relegation of small farm lending to second-class status and the minimal if non-existent regulatory relief undermine any rationale for adoption of the flawed concept.
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