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#2065669 - 02/23/16 11:00 PM Horses
Ryan Yager Offline
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Joined: Apr 2014
Posts: 21
IL
This is a loan data reporting question. We’ve had several loans in the past for various uses of horses. According to the USDA, horses are livestock. Depending on the use of the horses, most loans will be agricultural, but is it possible some could be commercial?

Call report says:

(1) Loans and advances made for the purpose of financing agricultural production, including
the growing and storing of crops, the marketing or carrying of agricultural products by the
growers thereof, and the breeding, raising, fattening, or marketing of livestock.

We are seeing loans where the customer runs riding stables where riding lessons are provided, racing horses, training race horses, etc. These customers aren’t always breeding the horses. Would giving riding lessons or participating in horse racing be considered agricultural loans? Or could the argument be made that it is a business and not a farm??

I can see both, but I can also see the ease I just saying any activity involving horses is ag because horses are livestock.

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#2066889 - 03/01/16 07:14 PM Re: Horses Ryan Yager
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
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Posts: 21,281
Sorry for the delayed response! Flu and annual submissions got in the way.

Here is some information from the Department of Labor that could prove to be helpful.

"§ 780.122 Activities relating to race horses.

Employees engaged in the breeding, raising, and training of horses on farms for racing purposes are considered agricultural employees. Included are such employees as grooms, attendants, exercise boys, and watchmen employed at the breeding or training farm. On the other hand, employees engaged in the racing, training, and care of horses and other activities performed off the farm in connection with commercial racing are not employed in agriculture. For this purpose, a training track at a racetrack is not a farm. Where a farmer is engaged in both the raising and commercial racing of race horses, the activities performed off the farm by his employees as an incident to racing, such as the training and care of the horses, are not practices performed by the farmer in his capacity as a farmer or breeder as an incident to his raising operations. Employees engaged in the feeding, care, and training of horses which have been used in commercial racing and returned to a breeding or training farm for such care pending entry in subsequent races are employed in agriculture."
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#2066973 - 03/02/16 12:38 PM Re: Horses Ryan Yager
TryingtoComply Offline
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Joined: Apr 2013
Posts: 1,979
The West
After reading this thread I am reminded that I grew up with horses. I should have pursued a career that had something to do with these beautiful creatures. Oh............back to reality........need to get ready to work and prepare again to convince my CRO that my department is understaffed.

Sorry for the inappropriate post......LOL!
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#2067105 - 03/02/16 05:37 PM Re: Horses Ryan Yager
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,281
smile
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Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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#2067479 - 03/03/16 11:04 PM Re: Horses Ryan Yager
Ryan Yager Offline
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Joined: Apr 2014
Posts: 21
IL
Just to update, we had 2 loans last week. One to a customer who trains riding horses, and one to a different customer who shoes and boards horses. We coded both as small business loans. Both our internal auditors and our contact at the OCC said they see nothing wrong with considering these small businesses.

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#2067486 - 03/04/16 12:38 AM Re: Horses Ryan Yager
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,281
I agree with those decisions and the Labor Department information above would go along with that. They are not raising horses.
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Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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#2067731 - 03/05/16 06:55 PM Re: Horses Ryan Yager
TryingtoComply Offline
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Posts: 1,979
The West
Having been a person that paid for these services, I totally agree. These individuals are running a business. Although many of them also breed horses on the side.
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#2111263 - 12/16/16 09:54 PM Re: Horses Ryan Yager
banker-12 Offline
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Joined: May 2007
Posts: 1,207
We have a loan that is secured by ranchland. The borrowers purchased the land to house their horses. They are doctors; not ranchers/farmers. Can we report this loan as a Small Farm loan since it is secured by ranchland (fed code 1b)?

Thanks,

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#2111265 - 12/16/16 09:58 PM Re: Horses Ryan Yager
banker-12 Offline
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Joined: May 2007
Posts: 1,207
Also, the land will not be used for agricultural purposes (livestock production), only to house the horses.
Thanks,

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