If Grant Rigby works on the farm and his wife doesn’t, why does she have to co-sign so he can get a loan from his local credit union?
Rigby, who holds a master’s degree in food science from the University of Manitoba, said requiring both husband and wife to sign off on a loan is restricting expansion of his farm and is unfair to spouses who have off-farm jobs.
“It is policy at the local credit unions, since at least the early ’90s, that every farm customer is both spouses,” said Rigby, who produces organic forage crops, organic feed and raspberry wine on his farm near Killarney, Man.
Read Also
Canada’s rural crime problem far from fixed
Farmers on the Prairies are worried about crime rates and safety, but an effective approach to meaningfully reduce rural crime remains out of reach so far.
He is refusing to accept the policy and take out a loan to expand his operations.
“This entire agricultural finance industry is not available to service the growth of this winery,” said Rigby, noting the co-signing policy extends to chartered banks and provincial institutions like the Manitoba Agricultural Services Corp.
“If your spouse has their own profession, they should be aware that they’ll be required to put the wages from that profession at risk,” said Rigby.
His wife Judith is a canola breeding technician at the university and does not work on the farm.
Rigby said the lending policy is especially harmful for farm families, because many spouses work off farm to provide a stable source of income, not to service farm debt.
“To serve the family is the precise reason why a spouse might have to secure another job, to make sure the kids get fed.”
Although Rigby said his farm is stable and profitable and can survive without a loan, the issue for him is much larger.
He thinks the policy is pushing the Prairies in the wrong direction.
“They (credit unions) tend to serve just a few large business enterprises and residential mortgages. One never sees a lot of aspiring entrepreneurs in credit unions asking for small loans,” he said.
That will lead to fewer risk takers, fewer small farmers and fewer landowners on the Prairies, he said.
Aside from writing and talking about the lending policy, Rigby said he has raised the issue with credit union officials in Manitoba.
“The response is that’s the policy. And my response is no thanks.”
A spokesperson for Credit Union Central of Manitoba said the policy depends on the farm.
“More often than not, if the farm is in the joint names of a married couple, both will sign security documents, but not in all cases,” Jim Harris said in an e-mail.
“Every situation is different and it’s incumbent upon the credit union to do its due diligence before making a lending decision.”
Even if it is a condition of lending, the vice-president of planning and lending programs for MASC said the spouse co-signing policy is a standard protocol for lending institutions.
“It is a common practice for there to be the consideration that a husband and wife are partners,” she said. “It’s a very, very common practice.”
It may be a standard practice, but that doesn’t mean it is reasonable or mutually beneficial, Rigby said.
Financial institutions could easily adjust their practices to better serve farmers and rural Canada.
“It means taking credit unions back to their roots, why they were created,” he said. “They’ve become savings unions, not credit unions.”
