The ACRE Act of 2025 Must Be Opposed
Few things are more destructive to liberty than when laws are written under the guise of compassion or economic aid, only to conceal their true purpose: the enrichment of the powerful and the institutionalization of inequality. Senate Bill 838, also known as the “Access to Credit for our Rural Economy Act of 2025” or the ACRE Act, is a textbook example. Though it pretends to support farmers and rural communities, it instead offers an unconstitutional tax shelter to select financial institutions at the expense of free markets, small lenders, and local control.
This legislation, introduced by Senator Jerry Moran, proposes to amend the Internal Revenue Code of 1986 to exclude from gross income the interest received on certain loans secured by rural or agricultural real property. That sounds innocuous, even helpful—until you read the fine print. The bill restricts who qualifies for this special tax exemption to a very narrow class of institutions: banks and savings associations insured under the Federal Deposit Insurance Corporation (FDIC), state- or federally regulated insurance companies, and entities owned by certain bank holding companies defined by the International Banking Act of 1978.
In other words, the bill provides a federal tax exclusion on interest income—but only for large, federally chartered financial institutions, including foreign-owned entities. Local credit unions, regional farm co-ops, community development financial institutions (CDFIs), or individual rural investors—many of whom have served rural America faithfully and responsibly—are entirely excluded from this tax benefit. These are often the same institutions that take the time to understand the unique needs of rural borrowers, while the large financial institutions cherry-pick the most profitable opportunities and withdraw from areas when profit margins drop.
Constitutional Concerns
First and foremost, this bill raises serious constitutional red flags. By granting a tax exemption only to a specific class of financial institutions, the federal government is effectively creating an economic aristocracy. This may violate the equal protection principles embedded in the Fifth Amendment’s Due Process Clause, which prohibits the federal government from enacting arbitrary and discriminatory laws.
While Congress has the authority to regulate taxation under Article I, Section 8 of the Constitution, that power must be executed in a manner that respects the rule of law and the principle of equal protection. By excluding entire categories of qualified rural lenders from the benefits of this legislation—including those most embedded in rural communities—the bill creates an unjust and likely unconstitutional preference.
Additionally, this preferential tax treatment violates the spirit of the Uniformity Clause of the Constitution (Article I, Section 8, Clause 1), which requires that “all Duties, Imposts and Excises shall be uniform throughout the United States.” By granting a selective tax privilege to a federally endorsed class of lenders, Congress is using the tax code to confer financial advantage unequally and unfairly, arguably violating both the letter and the intent of the Uniformity Clause.
Economic Distortion and Cronyism
Let us be clear: this is not a rural development bill. It is a strategic move by large banks and insurance companies to lobby for an artificial advantage in the lending marketplace. If passed, the ACRE Act would create a two-tiered financial system in rural America: one class of lenders granted tax-exempt interest income, and another class—the local institutions, the small farm co-ops, the community banks—who must operate at a competitive disadvantage.
This is crony capitalism at its worst. Instead of allowing rural Americans to choose among a variety of credit options from local institutions they trust, the ACRE Act channels market power into the hands of institutions large enough to curry favor in Washington, D.C.
And who ultimately pays for this distortion? The American taxpayer. By excluding this interest income from gross income, the federal government reduces tax revenue, meaning that other individuals or sectors must bear the burden. This is a form of indirect wealth transfer from the general public to private, federally protected institutions.
The Displacement of Local Control
It is no secret that large financial institutions have been consolidating their hold on the rural finance sector for decades. Once community banks dominated the landscape. Today, large national and international banks often own the portfolios that decide the fate of family farms. The ACRE Act would accelerate this centralization by giving these firms a tax incentive to push out smaller competitors.
This shift has long-term cultural and economic consequences. Local lenders are accountable to the communities they serve. They know the families. They understand seasonal rhythms, regional risks, and generational farming practices. When local credit is replaced by faceless conglomerates, the human relationship that once underpinned rural finance is severed.
Further, this consolidation of credit access into fewer and fewer hands creates a form of economic dependency on institutions that do not share the interests or values of the communities they claim to serve. This bill, if passed, will lead to more rural borrowers being beholden to the terms, politics, and risk assessments of Wall Street, not Main Street.
The False Promise of “Access to Credit”
Proponents of the ACRE Act claim it will increase access to credit for rural borrowers. That is a deceptive narrative. If Congress were truly concerned with increasing rural credit, it would extend the tax exemption to all qualified lenders—not just the largest and most politically connected ones.
Instead, this bill would allow large financial institutions to offer loans at artificially low rates, not because of efficiency or market innovation, but because of their newly granted tax-exempt status. Competing institutions—many of which are more rooted in rural life and more experienced in agricultural lending—would be left behind. Rather than opening up credit markets, this bill narrows them to a cartel of federally approved lenders.
Moreover, the bill leaves rural borrowers more vulnerable to future credit crises. When local lenders disappear, and national firms decide to pull back from rural markets during economic downturns, there are no longer alternative institutions to pick up the slack. The ACRE Act would thus increase systemic risk to rural credit markets in the long term.
The Global Banking Angle
One especially troubling provision in the bill permits participation by any entity wholly owned by a company treated as a bank holding company under the International Banking Act of 1978. This means that foreign-controlled entities could potentially benefit from this U.S. tax exemption if they own a qualifying domestic subsidiary.
Why would Congress grant a U.S. tax advantage to entities under foreign ownership while denying it to U.S.-based credit unions and cooperatives? This not only violates principles of national economic sovereignty, it also reveals the extent to which international finance influences domestic policy.
The inclusion of foreign-backed banks further undermines the claim that this bill serves American rural interests. In truth, it serves global finance under the pretext of rural compassion.
Conclusion: We Must Reject the ACRE Act
The ACRE Act is a case study in how modern federal legislation is used not to uplift citizens, but to entrench and empower narrow interests. It is a textbook example of how the tax code is weaponized to concentrate economic power. It will not help rural America. It will not restore family farms. It will not make credit more accessible in any meaningful or enduring way.
What it will do is expand the reach of megabanks and multinational insurers deeper into the lifeblood of American agriculture. It will grant constitutional privilege to a favored class and leave smaller, more responsive institutions on the sidelines. It will do all this under the banner of “access” while tightening the grip of centralized finance over independent rural life.
Congress must reject S.838. And if they do not, the American people must hold them accountable for betraying the very communities they claim to serve. We must demand legislation that supports genuine decentralization, honors constitutional principles, and protects the sovereignty of local economies from corporate manipulation.
Anything less is not reform — it is surrender.
Matthew Rhodes is a Field Coordinator for The John Birch Society
Authors’ opinions are their own and may not represent those of Grok Media, LLC, GraniteGrok.com, its sponsors, readers, authors, or advertisers.
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