7 U.S.C. § 1928 — Full faith and credit

Page 1082 TITLE 7—AGRICULTURE § 1927a § 1927a. Loan interest rates charged by Farmers Home Administration; grant funds associated with loans Effective October 1, 1981, and thereafter, in the case of water and waste disposal and community facility borrowers, and effective November 12, 1983, and thereafter, in the case of housing and farm borrowers, upon request of the borrower, the interest rate charged by the Farmers Home Administration to such borrowers shall be the lower of the rates in effect at either the time of loan approval or loan closing and any Farmers Home Administration grant funds associated with such loans shall be set in amount based on the interest rate in effect at the time of loan ap- proval. (Pub. L. 99–88, title I, § 100, Aug. 15, 1985, 99 Stat. 296; Pub. L. 100–233, title VI, § 615(b)(1)(A), Jan. 6, 1988, 101 Stat. 1681.) Editorial Notes CODIFICATION Section was enacted as part of the Supplemental Ap- propriations Act, 1985, and not as part of the Consoli- dated Farm and Rural Development Act which com- prises this chapter. AMENDMENTS 1988—Pub. L. 100–233 substituted ‘‘Effective October 1, 1981, and thereafter, in the case of water and waste dis- posal and community facility borrowers, and effective November 12, 1983, and thereafter, in the case of hous- ing and farm borrowers’’ for ‘‘Effective November 12, 1983, and thereafter’’ and ‘‘to such borrowers’’ for ‘‘to housing, farm, water and waste disposal, and commu- nity facility borrowers’’. Statutory Notes and Related Subsidiaries APPLICABILITY OF 1988 AMENDMENT Pub. L. 100–233, title VI, § 615(b)(1)(B), Jan. 6, 1988, 101 Stat. 1682, provided that: ‘‘The amendment made by subparagraph (A) [amending this section] shall not apply to any note or other obligation sold under sec- tion 1001 of the Omnibus [Budget] Reconciliation Act of 1986 [Pub. L. 99–509, 7 U.S.C. 1929a note] on or before the date of the enactment of this paragraph [Jan. 6, 1988].’’ § 1928. Full faith and credit (a) In general A contract of insurance or guarantee executed by the Secretary under this chapter shall be an obligation supported by the full faith and credit of the United States. (b) Contestability A contract of insurance or guarantee executed by the Secretary under this chapter shall be in- contestable except for fraud or misrepresenta- tion that the lender or any holder— (1) has actual knowledge of at the time the contract or guarantee is executed; or (2) participates in or condones. (Pub. L. 87–128, title III, § 308, Aug. 8, 1961, 75 Stat. 308; Pub. L. 87–798, Oct. 11, 1962, 76 Stat. 908; Pub. L. 89–240, § 2(a), Oct. 7, 1965, 79 Stat. 932; Pub. L. 90–488, § 6, Aug. 15, 1968, 82 Stat. 770; Pub. L. 92–133, Oct. 5, 1971, 85 Stat. 364; Pub. L. 101–624, title XXIII, § 2388(a), Nov. 28, 1990, 104 Stat. 4052; Pub. L. 104–127, title VI, § 605, Apr. 4, 1996, 110 Stat. 1086.) 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 1996—Pub. L. 104–127 amended section generally. Prior to amendment, section read as follows: ‘‘Loans under this subchapter may be insured by the Secretary when- ever funds are advanced or a loan is purchased by a lender other than the United States. In connection with insurance of loans, the Secretary— ‘‘(1) is authorized to make agreements with respect to the servicing of loans insured hereunder and to purchase such loans on such terms and conditions as he may prescribe; and ‘‘(2) may retain out of payments by the borrower a charge at a rate specified in the insurance agreement applicable to the loan. Any contract of insurance executed by the Secretary under this subchapter shall be an obligation supported by the full faith and credit of the United States and in- contestable except for fraud or misrepresentation of which the holder has actual knowledge.’’ 1990—Pub. L. 101–624 redesignated pars. (a) and (b) as pars. (1) and (2), respectively, and in par. (1), sub- stituted ‘‘prescribe;’’ for ‘‘prescribe,;’’. 1971—Pub. L. 92–133 eliminated October 1, 1971, as time limitation for insurance of loans. 1968—Pub. L. 90–488 authorized insurance of loans until Oct. 1, 1971, without the $450,000,000 limitation on aggregate amount in any one year. 1965—Pub. L. 89–240 substituted ‘‘$450,000,000’’ for ‘‘$200,000,000’’, ‘‘may retain’’ for ‘‘shall retain’’, and ‘‘specified in the insurance agreement applicable to the loan’’ for ‘‘determined by the Secretary from time to time equivalent to not less than one-half of 1 per cen- tum per annum on the principal unpaid balance of the loan’’, and struck out ‘‘except that no agreement shall provide for purchase by the Secretary at a date sooner than three years from the date of the note’’ after ‘‘he may prescribe’’. 1962—Pub. L. 87–798 increased aggregate amount of loans that may be insured in any one year from $150,000,000 to $200,000,000. § 1929. Agricultural Credit Insurance Fund (a) Revolving fund The fund established pursuant to section 11(a) of the Bankhead-Jones Farm Tenant Act, as amended, shall hereafter be called the Agricul- tural Credit Insurance Fund and is hereinafter in this subchapter referred to as the ‘‘fund’’. The fund shall remain available as a revolving fund for the discharge of the obligations of the Sec- retary under agreements insuring loans under this subchapter and loans and mortgages insured under prior authority. (b) Deposits of funds; investments; purchase of notes Moneys in the fund not needed for current op- erations shall be deposited in the Treasury of the United States to the credit of the fund or in- vested in direct obligations of the United States or obligations guaranteed by the United States. The Secretary may purchase with money in the fund any notes issued by the Secretary to the Secretary of the Treasury for the purpose of ob- taining money for the fund.