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Federal Farm Loan Act
The Federal Farm Loan Act of 1916 () was a United States federal law aimed at increasing credit to rural family farmers. It did so by creating a federal farm loan board, twelve regional farm loan banks and tens of farm loan associations. The act was signed into law by President of the United States Woodrow Wilson.
==Background==
In 1908, the Administration of Theodore Roosevelt commissioned a study on the problems facing rural families. At this point in U.S. history, these families made up the largest demographic. The commission concluded that access to credit was one of the most serious problems facing rural farmers and recommended the introduction of a cooperative credit system.
Four years later, Presidents William Howard Taft and Woodrow Wilson sent a commission of Americans to study cooperative credit systems for farmers in Europe. Components of such European programs at the time included cooperative land-mortgage banks and rural credit unions. This commission concluded that the best form of cooperative credit system would include both long-term credit to cover land mortgages and short-term credit to cover regular business needs.〔Farm Credit Administration: History of FCA and FCS http://www.fca.gov/about/history/historyFCA_FCS.html〕
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