Direct Farm Loan Application National Processing Times Were Longer for Hispanic Farmers than for Non-Hispanic Farmers but Were Shorter in Most States with Large Numbers of Hispanic Borrowers

During fiscal year 2000 and 2001, the national average processing time for direct loans for Hispanic farmers was 20 days—4 days longer than for non- Hispanic farmers—but well within FSA’s 60-day requirement. However, the loan approval rate for Hispanic farmers was lower than for non-Hispanic farmers during this 2-year period: 83 and 90 percent, respectively. When an individual files an administrative discrimination complaint with OCR, FSA’s policy is to automatically issue a stay of adverse action—including foreclosure–until the complaint has been resolved. Office of Civil Rights’ Problems with Processing Discrimination Complaints Persist

OCR has adopted many recommendations made in the past by USDA’s Inspector General and agency task forces. Specifically, USDA directs OCR to complete its investigative reports within 180 days after accepting a discrimination complaint. However, during fiscal years 2000 and 2001, OCR took on average 365 days and 315 days, respectively, to complete its investigative reports. In fact, when all phases of the complaint resolution are accounted for, OCR took an average of 772 and 676 days in fiscal years 2000 and 2001, respectively, to completely process complaints through the entire complaint cycle and issue the final agency decision. In the case of class action lawsuits, USDA has been charged with treating different minority groups inequitably because it grants stays of foreclosures to some groups but not to others.
What GAO Found

For years, some minority and women farmers have alleged that the Department of Agriculture's (USDA) Farm Service Agency (FSA) discriminates against them, treating them differently from other farmers during the loan approval or foreclosure process. During fiscal years 2000 and 2001, FSA took, on average, four days longer to process loan applications from Hispanic farmers than it did for non-Hispanic farmers: 20 days versus 16 days. The FSA's direct loan approval rate was somewhat lower for Hispanic farmers than for non-Hispanic farmers nationwide: 83 and 90 percent, respectively. USDA's policies for staying foreclosures when discrimination has been alleged depend on the method used to lodge complaints. When an individual's discrimination complaint is accepted by the Office of Civil Rights (OCR), FSA's policy is to automatically issue a stay of adverse action, such as foreclosure, until the complaint has been resolved. OCR has made modest progress in the length of time it takes to process discrimination complaints. USDA requires OCR to complete the investigative phase of processing a complaint within 180 days of accepting it. In fiscal year 2000, OCR took an average of 365 days to complete just the investigative phase. Although OCR slightly improved this average to 315 days in fiscal year 2001, this continues to exceed the department's internal 180-day requirement.