Rural people, whatever that means, can be smart and crafty. And there should be a risk management committee and there are services to help provide insights. I was on a rural BoD and don't recall ever seeing a crop loan.
I have a relative who was an FDIC auditor and spent the last 10 years assessing commercial loan portfolios as a consultant for hundreds of small banks across the south and Midwest. Most banks had at least a few loans that were poorly underwritten (insufficient income verification, collateral declaration, improper property comps, etc.) She had some crazy stories though.
A rural bank gave out one of its largest loans, a few million, to a guy to build a crypto farm 3-4 years ago. She called me up during the crypto crash asking for advice on how to price all of these GPUs he bought at the top of the market since he was facing liquidation. The bank took a bath on it. And that was just one of many. Tons of PPP fraud, small Town corruption, etc.
A rural bank gave out one of its largest loans, a few million, to a guy to build a crypto farm 3-4 years ago. She called me up during the crypto crash asking for advice on how to price all of these GPUs he bought at the top of the market since he was facing liquidation. The bank took a bath on it. And that was just one of many. Tons of PPP fraud, small Town corruption, etc.