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7 U.S.C. § 1989 — Appropriations
Federal law — U.S. Code and appendices · legal_authorities
**(a) Authorization** There is authorized to be appropriated to the Secretary such sums as the Congress may from time to time determine to be necessary to enable the Secretary to carry out the purposes of this chapter and for the administration of assets transferred to the Farmers Home Administration or the Rural Development Administration.
**(b) Sale by lender and any holder of guaranteed portion of loan pursuant to regulations governing such sales; limitations; issuance of pool certificates representing ownership of guaranteed portion of guaranteed loan; terms and conditions, etc.; reporting requirements**
(1)
(A) The guaranteed portion of any loan made under this chapter may be sold by the lender, and by any subsequent holder, in accordance with regulations governing such sales as the Secretary shall establish, subject to the following limitations:
(i) All fees due the Secretary with respect to a guaranteed loan are to be paid in full before any sale.
(ii) The loan is to have been fully disbursed to the borrower before the sale.
(B) After a loan is sold in the secondary market, the lender shall remain obligated under its guarantee agreement with the Secretary, and shall continue to service the loan in accordance with the terms and conditions of such agreement.
(C) The Secretary shall develop such procedures as are necessary for the facilitation, administration, and promotion of secondary market operations, and for determining the increase of farmers’ access to capital at reasonable rates and terms as a result of secondary market operations.
(D) This subsection shall not be interpreted to impede or extinguish the right of the borrower or the successor in interest to such borrower to prepay (in whole or in part) any loan made under this chapter,
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Source location: Title 7, Chapter 50, § 1989; chapter-050-agricultural-credit.md
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**(a) Authorization** There is authorized to be appropriated to the Secretary such sums as the Congress may from time to time determine to be necessary to enable the Secretary to carry out the purposes of this chapter and for the administration of assets transferred to the Farmers Home Administration or the Rural Development Administration.
**(b) Sale by lender and any holder of guaranteed portion of loan pursuant to regulations governing such sales; limitations; issuance of pool certificates representing ownership of guaranteed portion of guaranteed loan; terms and conditions, etc.; reporting requirements**
(1)
(A) The guaranteed portion of any loan made under this chapter may be sold by the lender, and by any subsequent holder, in accordance with regulations governing such sales as the Secretary shall establish, subject to the following limitations:
(i) All fees due the Secretary with respect to a guaranteed loan are to be paid in full before any sale.
(ii) The loan is to have been fully disbursed to the borrower before the sale.
(B) After a loan is sold in the secondary market, the lender shall remain obligated under its guarantee agreement with the Secretary, and shall continue to service the loan in accordance with the terms and conditions of such agreement.
(C) The Secretary shall develop such procedures as are necessary for the facilitation, administration, and promotion of secondary market operations, and for determining the increase of farmers’ access to capital at reasonable rates and terms as a result of secondary market operations.
(D) This subsection shall not be interpreted to impede or extinguish the right of the borrower or the successor in interest to such borrower to prepay (in whole or in part) any loan made under this chapter, or to impede or extinguish the rights of any party under any provision of this chapter.
(2)
(A) The Secretary may, directly or through a market maker approved by the Secretary, issue pool certificates representing ownership of part or all of the guaranteed portion of any loan guaranteed by the Secretary under this chapter. Such certificates shall be based on and backed by a pool established or approved by the Secretary and composed solely of the entire guaranteed portion of such loans.
(B) The Secretary may, on such terms and conditions as the Secretary deems appropriate, guarantee the timely payment of the principal and interest on pool certificates issued on behalf of the Secretary by approved market makers for purposes of this subsection. Such guarantee shall be limited to the extent of principal and interest on the guaranteed portions of loans that compose the pool. If a loan in such pool is prepaid, either voluntarily or by reason of default, the guarantee of timely payment of principal and interest on the pool certificates shall be reduced in proportion to the amount of principal and interest such prepaid loan represents in the pool. Interest on prepaid or defaulted loans shall accrue and be guaranteed by the Secretary only through the date of payment on the guarantee. During the term of the pool certificate, the certificate may be called for redemption due to prepayment or default of all loans constituting the pool.
(C) The full faith and credit of the United States is pledged to the payment of all amounts that may be required to be paid under any guarantee of such pool certificates issued by approved market makers under this subsection. The Secretary may expend amounts in the Agricultural Credit Insurance Fund to make payments on such guarantees.
(D) The Secretary shall not collect any fee for any guarantee under this subsection. The preceding sentence shall not preclude the Secretary from collecting a fee for the functions described in paragraph (3).
(E) Within 30 days after a borrower of a guaranteed loan is in default of any principal or interest payment due for 60 days or more, the Secretary shall—
(i) purchase the pool certificates representing ownership of the guaranteed portion of the loan; and
(ii) pay the registered holder of the certificates an amount equal to the guaranteed portion of the loan represented by the certificate.
(F)
(i) If the Secretary pays a claim under a guarantee issued under this subsection, the claim shall be subrogated fully to the rights satisfied by such payment, as may be provided by the Secretary.
(ii) No State or local law, and no Federal law, shall preclude or limit the exercise by the Secretary of the Secretary’s ownership rights in the portions of loans constituting the pool against which the certificates are issued.
(3) On the adoption of final rules and regulations, the Secretary shall do the following:
(A) Provide for the central collection of registration information from all participating market makers for all loans and pool certificates sold under paragraphs (1) and (2). Such information shall include, with respect to each original sale and any subsequent sale, identification of the interest rate paid by the borrower to the lender, the lender’s servicing fee, whether interest on the loan is at a fixed or variable rate, identification of each purchaser of a pool certificate, the interest rate paid on the certificate, and such other information as the Secretary deems appropriate.
(B) Before any sale, require the seller to disclose to each prospective purchaser of the portion of a loan guaranteed under this chapter and to each prospective purchaser of a pool certificate issued under paragraph (2), information on the terms, conditions, and yield of such instrument. As used in this subparagraph, if the instrument being sold is a loan, the term “seller” does not include (i) the person who made the loan or (ii) any person who sells three or fewer guaranteed loans per year.
(C) Provide for adequate custody of any pooled guaranteed loans.
(D) Take such actions as are necessary, in restructuring pools of the guaranteed portion of loans, to minimize the estimated costs of paying claims under guarantees issued under this subsection.
(E) Require each market maker—
(i) to service all pools formed, and participations sold, by the market maker; and
(ii) to provide the Secretary with information relating to the collection and disbursement of all periodic payments, prepayments, and default funds from lenders, to or from the reserve fund that the Secretary shall establish to enable the timely payment guarantee to be self-funding, and from all beneficial holders.
(F) Regulate market makers in pool certificates sold under this subsection.
(4) The Secretary may contract for goods and services to be used for the purposes of this subsection without regard to the provisions of titles 5, 40, and 41, and any regulations issued thereunder.
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Voluntary liquidation** The Corporation may voluntarily liquidate only with the consent of, and in accordance with a plan of liquidation approved by, the Farm Credit Administration Board.
**(b) Involuntary liquidation**
(1) **In general** — The Farm Credit Administration Board may appoint a conservator or receiver for the Corporation under the circumstances specified in [section 2183(b) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2183/b&num=0&edition=prelim).
(2) **Application** — In applying [section 2183(b) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2183/b&num=0&edition=prelim) to the Corporation under paragraph (1)—
(A) the Corporation shall also be considered insolvent if the Corporation is unable to pay its debts as they fall due in the ordinary course of business;
(B) a conservator may also be appointed for the Corporation if the authority of the Corporation to purchase qualified loans or issue or guarantee loan-backed securities is suspended; and
(C) a receiver may also be appointed for the Corporation if—
(i)
(I) the authority of the Corporation to purchase qualified loans or issue or guarantee loan-backed securities is suspended; or
(II) the Corporation is classified under [section 2279bb–4 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section2279bb-4&num=0&edition=prelim) as within level III or IV and the alternative actions available under part B are not satisfactory; and
(ii) the Farm Credit Administration determines that the appointment of a conservator would not be appropriate.
(3) **No effect on supervisory actions** — The grounds for appointment of a conservator for the Corporation
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 2002
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Federal law — U.S. Code and appendices · legal_authorities
### Statutory Notes
Section 2009ee, Pub. L. 107–171, title VI, § 6301, May 13, 2002, 116 Stat. 421, defined terms.
Section 2009ee–1, Pub. L. 107–171, title VI, § 6302, May 13, 2002, 116 Stat. 422, related to SEARCH grant program. See [section 1926 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title7-section1926&num=0&edition=prelim).
Section 2009ee–2, Pub. L. 107–171, title VI, § 6303, May 13, 2002, 116 Stat. 424, related to annual report on projects.
Section 2009ee–3, Pub. L. 107–171, title VI, § 6304, May 13, 2002, 116 Stat. 424, related to funding.
#### Codification
Pub. L. 110–234 and Pub. L. 110–246 repealed this subchapter. Pub. L. 110–234 was repealed by section 4(a) of Pub. L. 110–246.
#### Effective Date of Repeal
Repeal of this subchapter and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, see section 4 of Pub. L. 110–246, set out as an Effective Date note under [section 8701 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title7-section8701&num=0&edition=prelim).
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Federal law — U.S. Code and appendices · legal_authorities
In the administration of this chapter, the Secretary shall, to the extent practicable, use underwriting forms, standards, practices, and terminology similar to the forms, standards, practices, and terminology used by lenders in the private sector.
Source: Supplied U.S. Code snapshot — release unconfirmed · 7 U.S.C. § 1982
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Applications; time for action by Secretary; notice; statement of reasons**
(1) The Secretary shall approve or disapprove an application for a loan or loan guarantee made under this chapter, and notify the applicant of such action, not later than 60 days after the Secretary has received a complete application for such loan or loan guarantee.
(2)
(A) If an application for a loan or loan guarantee under this chapter (other than under subchapter II) is incomplete, the Secretary shall inform the applicant of the reasons such application is incomplete not later than 20 days after the Secretary has received such application.
(B)
(i) Not later than 10 calendar days after the Secretary receives an application for an operating loan or loan guarantee under subchapter II, the Secretary shall notify the applicant of any information required before a decision may be made on the application. On receipt of an application, the Secretary shall request from other parties such information as may be needed in connection with the application.
(ii) Not later than 15 calendar days after the date an agency of the Department of Agriculture receives a request for information made pursuant to clause (i), the agency shall provide the Secretary with the requested information.
(iii) If, not later than 20 calendar days after the date a request is made pursuant to clause (i) with respect to an application, the Secretary has not received the information requested, the Secretary shall notify the applicant and the district office of the Farmers Home Administration, in writing, of the outstanding information.
(iv) A county office shall notify the district office of the Farmers Home Administration of each application for an operating loan or loan guarantee under subchapter
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Federal law — U.S. Code and appendices · legal_authorities
Page 1149
TITLE 7—AGRICULTURE
§ 1989
(ii) to provide the Secretary with informa-
tion relating to the collection and disburse-
ment of all periodic payments, prepayments,
and default funds from lenders, to or from
the reserve fund that the Secretary shall es-
tablish to enable the timely payment guar-
antee to be self-funding, and from all bene-
ficial holders.
(F) Regulate market makers in pool certifi-
cates sold under this subsection.
(4) The Secretary may contract for goods and
services to be used for the purposes of this sub-
section without regard to the provisions of titles
5, 40, and 41, and any regulations issued there-
under.
(Pub. L. 87–128, title III, § 338, Aug. 8, 1961, 75
Stat. 316; Pub. L. 89–429, § 5, May 24, 1966, 80 Stat.
167; Pub. L. 100–233, title VII, § 711(a), Jan. 6, 1988,
101 Stat. 1707; Pub. L. 100–399, title VI, § 605, Aug.
17, 1988, 102 Stat. 1006; Pub. L. 101–624, title
XXIII, § 2303(d), Nov. 28, 1990, 104 Stat. 3981; Pub.
L. 104–127, title VII, § 749(a), Apr. 4, 1996, 110 Stat.
1129; Pub. L. 105–362, title I, § 101(a), Nov. 10, 1998,
112 Stat. 3281.)
Editorial Notes
REFERENCES IN TEXT
This chapter, referred to in text, was in the original
‘‘this title’’, meaning title III of Pub. L. 87–128, Aug. 8,
1961, 75 Stat. 307, known as the Consolidated Farm and
Rural Development Act, which is classified principally
to this chapter. For complete classification of title III
to the Code, see Short Title note set out under section
1921 of this title and Tables.
AMENDMENTS
1998—Subsec. (b)(4), (5). Pub. L. 105–362 redesignated
par. (5) as (4) and struck out former par. (4) which pro-
vided that not later than March 31 of each year, Sec-
retary was to transmit to Congress a report on sec-
ondary market operations under subsec. (b)
Source: Supplied 2024 U.S. Code historical extraction · 7 U.S.C. § 1989
Stored review status: historical_2024_not_currentness_verified. Same stored citation; legal effect and authority still require review.