How a major U.S. farm lender left a trail of defaults, lawsuits
Source: Reuters
BUSINESS NEWS OCTOBER 22, 2019 / 6:09 AM / UPDATED 2 HOURS AGO
How a major U.S. farm lender left a trail of defaults, lawsuits
P.J. Huffstutter
9 MIN READ
HARROD, Ohio (Reuters) - After completing a credit review in a half-hour phone call, a BMO Harris Bank underwriter cleared $12 million in loans for Ohio corn and soybean producer Greg Kruger in 2013.
Kruger had initially asked for a $2 million loan to build a grain elevator. But the Chicago-based bank, one of the largest U.S. farm lenders, ended up selling him a $5 million loan for the elevator and another $7 million to finance crops, machinery and debt consolidation, according to documents in the Ohio foreclosure case the bank filed to seize Kruger’s farm.
When Kruger offered to supply receipts of sold grain and other standard documentation, his loan officer told him not to bother. “‘Don’t worry. We’ll make the numbers work’,” Kruger, 67, recalled the officer saying.
Five years later, after aggressively expanding its U.S. farm loan portfolio, the bank called in Kruger’s loans as corn and soy prices collapsed and the United States was starting a trade war with China. As the U.S. agricultural economy sours and farmers’ financial woes pile up, BMO Harris is leaving behind a trail of farmers such as Kruger who have lost nearly everything.
The bank, a subsidiary of Canada’s Bank of Montreal (BMO.TO), has struggled to recoup some of its investments through a slew of bitter legal fights, according to a Reuters review of court documents and bank regulator data, as well as interviews with dozens of U.S. farmers, bankers, and former and current BMO Harris employees.
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Read more: https://www.reuters.com/article/us-usa-farmers-bmo-insight/how-a-major-u-s-farm-lender-left-a-trail-of-defaults-lawsuits-idUSKBN1X112K
