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7 U.S.C. § 940c — Cushion of credit payments program
Federal law — U.S. Code and appendices · legal_authorities
**(a) Establishment**
(1) **In general**
(A) *Development and promotion of program* — The Secretary shall develop and promote a program to encourage borrowers to voluntarily make deposits into cushion of credit accounts established within the Rural Electrification and Telephone Revolving Fund.
(B) *Termination* — Effective on December 20, 2018, no deposits may be made under subparagraph (A).
(2) **Interest**
(A) *In general* — Amounts in each cushion of credit account shall accrue interest to the borrower at a rate of 5 percent per annum.
(B) *Reduction* — Notwithstanding subparagraph (A), amounts in each cushion of credit account shall accrue interest to the borrower at a rate equal to—
(i) 4 percent per annum in fiscal year 2021; and
(ii) the then applicable 1-year Treasury rate thereafter.
(3) **Balance**
(A) *In general* — A borrower may reduce the balance of its cushion of credit account only if the amount obtained from the reduction is used to make scheduled payments on loans made or guaranteed under this chapter.
(B) *Prepayment* — Notwithstanding subparagraph (A) and subject to subparagraph (C), beginning on December 20, 2018, and ending with September 30, 2020, a borrower may, at the sole discretion of the borrower, reduce the balance of its cushion of credit account if the amount obtained from the reduction is used to prepay loans made or guaranteed under this chapter.
(C) *No prepayment premium* — Notwithstanding any other provision of this chapter, no prepayment premium shall be imposed or collected with respect to that portion of a loan that is prepaid by a borrower in accordance with subparagraph (B).
(D) *Mandatory funding* — Notwithstanding [section 661c of title 2](https://uscode.house.gov/view.xhtml?req=granuleid:US
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Stable record: federal_law:legal_authorities:record_usc_a3c7324e22458f6f606621d8
Source file: Laws/federal/codes/united-states-code/title-7/section-940c-cushion-of-credit-payments-program--a954a0d67f.md
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Source location: Title 7, Chapter 31, § 940c; chapter-031-rural-electrification-and-telephone-service.md
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**(a) Establishment**
(1) **In general**
(A) *Development and promotion of program* — The Secretary shall develop and promote a program to encourage borrowers to voluntarily make deposits into cushion of credit accounts established within the Rural Electrification and Telephone Revolving Fund.
(B) *Termination* — Effective on December 20, 2018, no deposits may be made under subparagraph (A).
(2) **Interest**
(A) *In general* — Amounts in each cushion of credit account shall accrue interest to the borrower at a rate of 5 percent per annum.
(B) *Reduction* — Notwithstanding subparagraph (A), amounts in each cushion of credit account shall accrue interest to the borrower at a rate equal to—
(i) 4 percent per annum in fiscal year 2021; and
(ii) the then applicable 1-year Treasury rate thereafter.
(3) **Balance**
(A) *In general* — A borrower may reduce the balance of its cushion of credit account only if the amount obtained from the reduction is used to make scheduled payments on loans made or guaranteed under this chapter.
(B) *Prepayment* — Notwithstanding subparagraph (A) and subject to subparagraph (C), beginning on December 20, 2018, and ending with September 30, 2020, a borrower may, at the sole discretion of the borrower, reduce the balance of its cushion of credit account if the amount obtained from the reduction is used to prepay loans made or guaranteed under this chapter.
(C) *No prepayment premium* — Notwithstanding any other provision of this chapter, no prepayment premium shall be imposed or collected with respect to that portion of a loan that is prepaid by a borrower in accordance with subparagraph (B).
(D) *Mandatory funding* — Notwithstanding [section 661c of title 2](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title2-section661c&num=0&edition=prelim), out of any funds in the Treasury not otherwise appropriated, the Secretary of the Treasury shall make available such sums as necessary to cover any loan modification costs as defined in [section 661a of title 2](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title2-section661a&num=0&edition=prelim).
**(b) Uses of cushion of credit payments**
(1) **In general**
(A) *Cash balance* — Cushion of credit payments shall be held in the Rural Electrification and Telephone Revolving Fund as a cash balance in the cushion of credit accounts of borrowers.
(B) *Interest* — All cash balance amounts (obtained from cushion of credit payments, loan payments, and other sources) held by the Fund shall bear interest to the Fund at a rate equal to the weighted average rate on outstanding certificates of beneficial ownership issued by the Fund.
(C) *Credits* — The amount of interest accrued on the cash balances shall be credited to the Fund as an offsetting reduction to the amount of interest paid by the Fund on its certificates of beneficial ownership.
(2) **Rural economic development subaccount** — The Secretary shall maintain a subaccount within the Rural Electrification and Telephone Revolving Fund to which shall be credited, on a monthly basis, a sum determined by multiplying the outstanding cushion of credit payments made after October 1, 1987, by the difference (converted to a monthly basis) between the average weighted interest rate paid on outstanding certificates of beneficial ownership issued by the Fund and 5 percent.
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Federal law — U.S. Code and appendices · legal_authorities
At the written request of a Senator, the Director shall, to the extent practicable, prepare an estimate of the direct costs of a Federal intergovernmental mandate contained in an amendment of such Senator.
Source: Supplied U.S. Code snapshot — release unconfirmed · 2 U.S.C. § 661a
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Federal law — U.S. Code and appendices · legal_authorities
The purposes of this subchapter are to—
(1) measure more accurately the costs of Federal credit programs;
(2) place the cost of credit programs on a budgetary basis equivalent to other Federal spending;
(3) encourage the delivery of benefits in the form most appropriate to the needs of beneficiaries; and
(4) improve the allocation of resources among credit programs and between credit and other spending programs.
Source: Supplied U.S. Code snapshot — release unconfirmed · 2 U.S.C. § 661c
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Establishment authorized** Notwithstanding any other provision of law, the Secretary is authorized to establish and maintain within the Department the Rural Business and Cooperative Development Service and to assign to the Service such functions as the Secretary considers appropriate.
**(b) Functions** If the Secretary establishes the Rural Business and Cooperative Development Service under subsection (a), the Secretary is authorized to assign to the Service jurisdiction over the following:
(1) Section 313 and title V of the Rural Electrification Act of 1936 ([7 U.S.C. 940c](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title7-section940c&num=0&edition=prelim) and 950aa et seq.).
(2) Subtitle G 11 See References in Text note below. of title XVI of the Food, Agriculture, Conservation, and Trade Act of 1990.
(3) Sections 306(a)(1) and 310B of the Consolidated Farm and Rural Development Act ([7 U.S.C. 1926(a)(1)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title7-section1926/a/1&num=0&edition=prelim) and 1932).
(4) Section 1323 of the Food Security Act of 1985 (Public Law 99–198; [7 U.S.C. 1932](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title7-section1932&num=0&edition=prelim) note).
(5) The Act of July 2, 1926 (44 Stat. 802, chapter 725; [7 U.S.C. 451](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title7-section451&num=0&edition=prelim) et seq.).
Source: Supplied U.S. Code snapshot — release unconfirmed · 7 U.S.C. § 6946
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Federal law — U.S. Code and appendices · legal_authorities
**(a) In general** The Secretary is authorized and empowered to extend the time of payment of interest or principal of any loans made by the Secretary pursuant to this chapter, except that, with respect to any loan made under section 904 or 922 of this title, the payment of interest or principal shall not be extended more than five years after such payment shall have become due.
**(b) Terms of deferment**
(1) Subject to limitations established in appropriations Acts, the Secretary shall permit any borrower to defer the payment of principal and interest on any insured or direct loan made under this chapter under circumstances described in this subsection, notwithstanding any limitation contained in subsection (a), except that such deferment shall not be permitted based on the determination of the Secretary of the financial hardship of the borrower.
(2)
(A) In the case of deferments made to enable the borrower to provide financing to local businesses, the deferment shall be repaid in equal installments, without the accrual of interest, over the 60-month period beginning on the date of the deferment, and the total amount of such payments shall be equal to the amount of the payment deferred.
(B) In the case of deferments made to enable the borrower to provide community development assistance, technical assistance to businesses, and for other community, business, or economic development projects not included under subparagraph (A), the deferment shall be repaid in equal installments, without the accrual of interest, over the 120-month period beginning on the date of the deferment, and the total amount of such payments shall be equal to the amount of the payment deferred.
(3)
(A) A borrower may defer its debt service payments only in an amount equal to an investm
Source: Supplied U.S. Code snapshot — release unconfirmed · 7 U.S.C. § 912
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Federal law — U.S. Code and appendices · legal_authorities
Page 546
TITLE 7—AGRICULTURE
§ 940a
amended Pub. L. 103–354, title II, § 235(a)(13), Oct.
13, 1994, 108 Stat. 3221.)
Editorial Notes
REFERENCES IN TEXT
The Consolidated Farm and Rural Development Act,
referred to in text, is title III of Pub. L. 87–128, Aug. 8,
1961, 75 Stat. 307, which is classified principally to chap-
ter 50 (§ 1921 et seq.) of this title. For complete classi-
fication of the Act to the Code, see Short Title note set
out under section 1921 of this title and Tables.
AMENDMENTS
1994—Pub. L. 103–354 substituted ‘‘Secretary’’ for ‘‘Ad-
ministrator’’.
Statutory Notes and Related Subsidiaries
EFFECTIVE DATE
Section effective May 11, 1973, see section 12 of Pub.
L. 93–32, set out as a note under section 930 of this title.
§ 940a. Repealed. Pub. L. 104–127, title VII, § 780,
Apr. 4, 1996, 110 Stat. 1151
Section, act May 20, 1936, ch. 432, title III, § 311, as
added Oct. 18, 1986, Pub. L. 99–500, § 101(m) [title VI,
§ 623], 100 Stat. 1783–308, 1783–333, and Oct. 30, 1986, Pub.
L. 99–591, § 101(m) [title VI, § 623], 100 Stat. 3341–308,
3341–333; amended Oct. 13, 1994, Pub. L. 103–354, title II,
§ 235(a)(7), (13), 108 Stat. 3221, related to privatization
demonstration program.
§ 940b. Use of funds
A borrower of an insured or guaranteed elec-
tric loan under this chapter may, without re-
striction or prior approval of the Secretary, in-
vest its own funds or make loans or guarantees,
not in excess of 15 percent of its total utility
plant.
(May 20, 1936, ch. 432, title III, § 312, as added
Pub. L. 100–203, title I, § 1402, Dec. 22, 1987, 101
Stat. 1330–21; amended Pub. L. 103–354, title II,
§ 235(a)(13), Oct. 13, 1994, 108 Stat. 3221.)
Editorial Notes
AMENDMENTS
1994—Pub. L. 103–354 substituted ‘‘Secretary’’ for ‘‘Ad-
ministrator’’.
Source: Supplied 2024 U.S. Code historical extraction · 7 U.S.C. § 940c
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