Agency Reconsidering Its Use of Bill Collectors for Farm Loans

The Farmers Home Administration is reconsidering its decision to hire private collection agencies to recoup some of $630 million owed on delinquent loans, the agency said Thursday.

Administrator Vance Clark said that he has asked agency officials to review the decision, which some farm leaders have criticized.

Last month, the agency contracted with two collection firms to handle the 6,500 accounts. Of those borrowers, 6,000 are former farmers whose loans are several years delinquent, whose collateral has been liquidated or who have made no repayment agreement with the agency.

Clark said that on Aug. 19 one of the firms, Capital Credit Corp. of Fairfield, N. J., sent out 6,000 letters to delinquent borrowers demanding payments by Aug. 29.

“As a result of the logistical procedure chosen by the credit firm, most of the letters were not received until Aug. 28 or thereabouts, which is most unfortunate,” Clark said.

“There is, sadly, the perception that we are moving in an unsympathetic, bureaucratic fashion against those who have suffered the most from economic problems in American agriculture and who are least able to make payments,” he said in a statement.

He urged that those who believe they should not have received collection letters contact the credit company to resolve the matter.

Several farm leaders have protested the use of bill collectors.

Larry Hall, president of the Farmers Union of Nebraska, was quoted as calling the plan “the last straw” and as predicting that it would “reap a harvest of rage” in the November elections.