[Federal Register Volume 59, Number 86 (Thursday, May 5, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-10756]
[[Page Unknown]]
[Federal Register: May 5, 1994]
VOL. 59, NO. 86
Thursday, May 5, 1994
DEPARTMENT OF AGRICULTURE
Farmers Home Administration
7 CFR Part 1980
RIN 0575-AB29
Guaranteed Loan Programs
AGENCY: Farmers Home Administration, USDA.
ACTION: Proposed rule.
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SUMMARY: Farmers Home Administration (FmHA) proposes to amend its
regulations on the monitoring of lender's collection activity after a
final loss is paid, when a guaranteed borrower's account remains
unsatisfied. This action is taken to further define criteria, by which
FmHA will monitor the lender's future recovery from unsatisfied
guaranteed borrower accounts. There is no formal procedure at present
for monitoring these accounts. The intended effect is to maximize
collections from unsatisfied guaranteed borrower accounts and to
minimize the financial loss to the Government.
DATES: Written comments must be submitted by July 5, 1994.
ADDRESSES: Submit written comments in duplicate, to the Office of the
Chief, Regulations, Analysis and Control Branch (RACB), Farmers Home
Administration, U.S. Department of Agriculture, Room 6348, South
Agriculture Building, 14th and Independence Avenue, SW., Washington, DC
20250. All written comments made pursuant to this publication will be
available for public inspection during regular work hours at the above
address.
FOR FURTHER INFORMATION CONTACT: James C. Root, Senior Loan Officer,
Guaranteed Servicing Branch, Farmer Programs Loan Servicing and
Property Management Division, Farmers Home Administration, U.S.
Department of Agriculture, Room 5444, South Agricultural Building, 14th
and Independence Avenue, SW., Washington, DC 20250, at (202) 720-4572.
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The Collection of information requirements contained in this
regulation have been submitted to the Office of Management and Budget
for review under Section 504(h) of the Paperwork Reduction Act of 1980.
Public reporting burden for this collection of information is estimated
to vary from 15 minutes to 28 hours per response, with an average of 2
hours per response including time for reviewing instructions, searching
existing data sources, gathering and maintaining the data needed, and
completing and reviewing the collection of information. Send comments
regarding this burden estimate or any other aspect of this collection
of information, including suggestions for reducing this burden, to
Department of Agriculture, Clearance Officer, OIRM, Room 404-W,
Washington, D.C. 20250; and to the Office of Management and Budget,
Attention: Desk Officer for the Farmers Home Administration,
Washington, DC 20503.
Classification
We are issuing this proposed rule in conformance with Executive
Order 12866, and we have determined that it is not a ``significant
regulatory action.'' Based on information compiled by the Department,
we have determined that this proposed rule: (1) Would have an effect on
the economy of less than $100 million; (2) would not adversely affect
in a material way the economy, a sector of the economy, productivity,
competition, jobs, the environment, public health or safety, or State,
local, or tribal governments or communities; (3) would not create a
serious inconsistency or otherwise interfere with an action taken or
planned by another agency; (4) would not alter the budgetary impact of
entitlements, grants, user fees, or loan programs or rights and
obligations of recipients thereof; and (5) would not raise novel legal
or policy issues arising out of legal mandates, the President's
priorities, or principles set forth in Executive Order 12866.
Environmental Impact Statement
This document has been reviewed in accordance with 7 CFR Part 1940,
Subpart G, ``Environmental Program.'' It is the determination of FmHA
that this action does not constitute a major Federal action
significantly affecting the quality of the human environment, and in
accordance with the National Environmental Policy Act of 1969, Public
Law 91-190, an Environmental Impact Statement is not required.
Programs Affected
This Action affects the following FmHA programs as listed in the
catalog of Federal Domestic Assistance:
10.404 Guaranteed Emergency Loans
10.406 Guaranteed Farm Operating Loans
10.407 Guaranteed Farm Ownership Loans
10.415 Rural Rental Housing Loans
10.416 Soil and Water Loans
10.768 Business and Industrial Loans
10.766 Community Facilities Loans
10.428 Economic Emergency Loans
10.434 Non-Profit National Corporations Loan and Grant Program
Intergovernmental Consultation
For the reasons set forth in the final rule related Notice(s) to 7
CFR 3015, subpart V (48 FR 29115, June 24, 1983; and 48 FR 54317,
December 1, 1983), numbers 10.415, 10.416, 10.766, and 10.768 are
subject to the provisions of Executive Order 12372 which requires
intergovernmental consultation with State and local officials. The
remaining numbered programs are excluded from the scope of Executive
Order 12372.
Discussion of Proposed Rule
The FmHA, in a response to an audit conducted by the Office of
Inspector General, agreed to strengthen FmHA Instructions regarding the
monitoring of loan accounts for 3 years following the year in which
final losses were paid in order to maximize potential future
recoveries.
List of Subjects in 7 CFR Part 1980
Agriculture, Loan programs--Agriculture, Loan programs--Business
and Industry--Rural development assistance, Loan programs--Housing and
community development, Loan programs--Community programs--Rural
development assistance.
Therefore, as proposed, Chapter XVIII, Title 7, Code of Federal
Regulations, is amended as follows:
PART 1980--GENERAL
1. The authority citation for Part 1980 continues to read as
follows:
Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 5 U.S.C. 301; 7 CFR
2.23 and 2.70.
Subpart A--General
2. Section 1980.69 is added to read as follows:
Sec. 1980.69 Future collections.
After a loan or an account has been liquidated, and the final loss
claim has been paid, FmHA will continue to maintain the borrower
account in an active status for 3 fiscal years, following the fiscal
year in which liquidation was completed or until the account is paid in
full, the borrower and all guarantors have been released from
liability, and/or the account is otherwise satisfied. A lender may,
with FmHA's concurrence, release a borrower and/or cosigner from
liability only when adequate compensation/consideration is received.
The servicing official will continue to monitor the collection efforts
of the lender during the 3 fiscal years following the fiscal year in
which the final loss claim was paid. The servicing official will send
FmHA Form Letter 1980-A-1 along with Form FmHA 1980-26, ``Report on
Collection Activities on Liquidated Accounts,'' by October 31st of each
year, to each lender that has an FmHA guaranteed loan account which
remains unsatisfied after the payment of the final loss claim. The loan
servicing official will establish a follow-up system to assure each
lender returns the appropriately completed Form FmHA 1980-26, by
November 30th. Appropriate follow-up will be initiated for those
lenders not providing adequate information as a result of the servicing
official's request. The servicing official will forward these reports
by program to the State Director by December 15th. The State Director
will consolidate the reports by program and report the results to the
Administrator by December 31st of each year. The FmHA servicing
official will ensure that any funds received by the lender after the
payment of the final loss claim will be prorated between FmHA and the
lender in accordance with the Lender's Agreement. The lender will
promptly transmit to FmHA such amounts recovered in proportion to the
percentage of the guaranteed portion of the loan by using Form FmHA
1980-43, ``Lender's Guaranteed Loan Payment to FmHA,'' and the lender
will retain such amount in proportion to the percentage of the
unguaranteed portion of the loan.
Subpart B--Farmer Programs Loans
3. Section 1980.146, paragraph (e)(3) is revised to read as
follows:
Sec. 1980.146 Liquidation.
* * * * *
(e) * * *
(3) Future Recovery. The County Supervisor will monitor collection
activities of lenders on unsatisfied liquidated accounts, which have
had final loss claims paid, for 3 fiscal years following the fiscal
year in which the loss claims were paid, beginning with loans which had
final loss claims paid during fiscal year 1990. On October 31st of each
year, the County Supervisor will provide FmHA Form Letter 1980-A-1 and
Form FmHA 1980-26, ``Report on Collection Activities on Liquidated
Accounts,'' to each guaranteed lender for each guaranteed loan on which
a final loss has been paid, but the account remains unsatisfied (the
account is not paid in full, the borrower or any guarantors have not
been released of liability, or the account has not been otherwise
satisfied). A lender may, with FmHA's concurrence, release a borrower
and/or cosigner from liability only when adequate compensation/
consideration is received. The County Supervisor will establish a
follow-up on each respective borrower management system card to send
FmHA Form Letter 1980-A-1 and Form FmHA 1980-26 on October 31st and
follow-up on November 30th for lenders who have not completed and
returned to FmHA, Form FmHA 1980-26. The County Supervisor will forward
these reports to the State Director by December 15th in accordance with
Sec. 1980.69 of subpart A of this part.
* * * * *
Dated: February 23, 1994.
Bob Nash,
Under Secretary for Small Community and Rural Development.
[FR Doc. 94-10756 Filed 5-4-94; 8:45 am]
BILLING CODE 3410-07-U