On May 30, 2017, Governor Mark Dayton signed a bill amending the Farmer-Lender Mediation Act, Minn. Stat. 583.01 et al.
The Farmer-Lender Mediation Act is a statutorily required mediation process that must be followed prior to executing on or enforcing a lien on agricultural property. See Minn. Stat. §§ 583.20-583.32. The Farmer-Lender Mediation Act was enacted in 1986 in response to the farm financial crisis of the mid-1980s.
Per the act’s requirements, a creditor initiating a procedure against a debtor to enforce a remedy against agricultural property must serve a mediation notice prior to beginning the proceeding. Minn. Stat. § 583.26. This applies to a creditor’s attempt to enforce a security interest on agricultural property including a real property foreclosure (Minn. Stat. §§ 580 and 581), personal property foreclosure (Minn. Stat. § 336 et al.), judgment execution (Minn. Stat. § 550.365), or terminating a contract for deed (Minn. Stat. § 559.209).
Effective August 1, 2017, the Farmer-Lender Mediation Act is amended as follows:
While the amendment does provide some benefit for financial institutions, the Farmer-Lender Mediation Act remains substantially unchanged. If you are uncertain about the impact of the amendments on your financial institution, please feel free to reach out to any member of Gray Plant Mooty’s Banking & Financial Services Practice Group.
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