RD Instruction 1910-C

Table of Contents

PART 1910 - General

Subpart C - Commercial Credit Reports

## TABLE OF CONTENTS

[Sec]{.underline}. [Page]{.underline}

1910.101 Preface. 1

1910.102 Purpose. 1

1910.103 - 1910.104 \[Reserved\] 1

1910.105 Policy. 1

1910.106 General. 1

1910.107 Definitions. 3

\(a\) Commercial Credit Report. 3

\(b\) Business Information Report (BIR). 3

\(c\) Government Activity Report (GAR). 3

\(d\) Contractor. 3

\(e\) General Contractor. 3

\(f\) Detail Reports. 3

\(g\) Dealer-Contractor. 4

\(h\) Authorized Rural Development Employees. 4

\(i\) State Coordinator. 4

1910.108 Circumstances requiring commercial credit

reports. 4

1910 109 - 1910.110 \[Reserved\] 5

1910.111 D&B Contract Specifications. 5

1910.112 Unsatisfactory services. 6

1910 113 \[Reserved\] 6

1910.114 Procedure for ordering credit reports. 6

1910.115 Collecting fees. 7

1910.116 - 1910.150 \[Reserved\] 7

Exhibit A Request for Commercial Credit Report

(02-21-90) PN 128

RD Instruction 1910-C

PART 1910 - GENERAL

Subpart C - Commercial Credit Reports

§1910.101 [Preface]{.underline}.

This subpart (§§1910.102 - 1910.150 available in any Rural Development
office) describes the procedure to be used by Rural Development in
obtaining commercial credit reports. A nonrefundable fee, set forth in
§1910 106 (d) of this subpart, will be collected from the applicant,
general contractor or dealer-contractor, who is the subject of the
report. This subpart is inapplicable to Farm Service Agency, Farm Loan
Programs. (Revised 01-09-08, PN 417.)

§1910.102 [Purpose]{.underline}.

This subpart prescribes the policies and procedures for obtaining
commercial credit reports when needed to determine eligibility of, or
obtain information about, applicants requesting Rural Development
assistance for group loans or grants in Business and Industry (B&I),
Community Facilities (CF), Water and Waste Disposal (WWD), Rural Rental
Housing (RRH), Rural Cooperative Housing (RCH), Labor Housing (LH), or
any other loan program activity where a commercial credit report is
necessary.

§§1910.101 - 1910.104 \[Reserved\]

§1910.105 [Policy]{.underline}.

A commercial credit report will be obtained whenever it is required by
this subpart to determine an applicant\'s eligibility for a loan or
grant; when it is necessary to determine the financial and managerial
capacity of a general contractor or dealer-contractor, or to
successfully service an existing loan account.

§1910.106 [General]{.underline}.

\(a\) The National Office. Administrative Services Division (ASD), has
issued two purchase orders for commercial credit report services
thorough Dun & Bradstreet (D&B), Inc., under the Federal Supply
Schedule. One purchase order is primarily for RRH, RCH, LH, and Single
Family Housing (SFH) loan programs and is to be used as outlined in this
procedure. The second purchase order is primarily for B&I loans and is
to be used as outlined in [RD Instruction 1980-E. §1980.451,
Administrative]{.underline}. Generally, any commercial credit reports
needed in the CF and WWD programs will be requested under the B&I
Division purchase order. These requests will be placed through the
National Office, B&I Division.

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DISTRIBUTION: WSAL Applications

General

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## (Revision 1)

(02-21-90) PN 128

RD Instruction 1910-C

§1910.106 (Con.)

\(b\) Commercial credit reports may only be ordered in the field by the
State Director or designee. All requests for commercial credit reports
should be submitted to the State Office by a County or District Office
when the County Supervisor or District Director determines that such a
report is necessary. The State Director\'s designee will request the
National Office to obtain the credit report from D&B, Inc. In the
National Office, reports may be ordered by the Director, Multiple Family
Housing Processing Division (MHPD), or designee; Director, Multiple
Family Housing Servicing and Property Management (MFHSPM), or designee;
Director, Single Family Housing Processing Division (SFHPD), or
designee; Director, WWD, or designee; Director, CF or designee; or
Director, B&I or designee. The procedure for ordering credit reports is
outlined in §1910.114 (b).

\(c\) Exhibit A of this subpart is a sample format of a \"Request for
Commercial Credit Report\" which will be completed by the County and
District Offices and forwarded to the State Office. The State
Coordinator will transmit Items 1 through 4 of the request to the
National Office via telemail. The credit report will be ordered by
accessing D&B\'s data base.

\(d\) Regardless of the costs incurred by the Government for the credit
services provided by the contractor, the fee charged the applicant,
general contractor or dealer contractor will be \$40.00, payable in
advance and nonrefundable. Credit reports fees will be processed in
accordance with §1910.115 of this subpart. Fees will not be charged for
credit reports ordered under the B&I purchase order.

\(e\) The State Director will appoint a member of the State staff to act
as State Coordinator for the credit services provided by D&B. The State
Coordinator will act as a liaison with the National Office authorized
employees who will be ordering the credit reports. If it becomes
necessary to change the State Coordinator, the National Office will be
notified.

\(f\) When a dealer-contractor is a firm, a commercial credit report
will be ordered on the firm and an individual credit report will be
obtained on each of the principals. If the dealer-contractor is a sole
proprietorship, a commercial as well as an individual credit report will
be obtained. Subpart B of Part 1910 of this chapter will be followed for
individual credit reports.

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## (Revision 1) 

RD Instruction 1910-C

§1910.107 [Definitions]{.underline}.

\(a\) Commercial Credit Report - A commercial credit report will
normally consist of a Business Information Report (BIR) but a Government
Activity Report (GAR) may be ordered, if needed.

\(b\) Business Information Report (BIR) - The BIR includes a summary
section that highlights important data elements; historical background
on the firm\'s principals and the business itself; a review of the
company\'s financial condition and trend of sales and earnings; a
payment record reported by suppliers; a brief description of related
companies; public filings (such as Universal Commercial Code (U.C.C.)
filings); special events (recent developments); and a description of the
firm\'s operation including products and services, selling terms, number
of employees, seasonal variations, and location.

\(c\) Government Activity Report (GAR) - The GAR contains consolidated
information on government transactions which involve credit or debt
relationships, contracts and grants. Sections included in the GAR are
loan summary; debts, fees, fines and overpayments; contracts; debarred,
suspended or ineligible status; government awarded grants and other
related companies.

\(d\) Contractor - The credit reporting agency or source authorized to
furnish commercial credit reports pursuant to a contract issued by Rural
Development.

\(e\) General Contractor - The individual (sole proprietorship), firm,
partnership, corporation or organization with whom the borrower enters
into a contract for construction or land development or both.

\(f\) Detail Reports - D&B\'s computer generated listed of the credit
response activity provided on a monthly basis. The report will be mailed
to the National Office between the 15th and 20th of the month for
activity during the previous month and will contain such information as
date of credit report, name and address of the subject, the number of
units charged and the type of units provided.

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(02-21-90) PN 128

RD Instruction 1910-C

§1910.107 (Con.)

\(g\) Dealer-Contractor - A person, firm, partnership or corporation in
the business of selling and servicing manufactured homes and developing
sites for manufactured homes. A person, firm, partnership or corporation
not capable of providing the complete service is not eligible to be a
dealer-contractor.

\(h\) Authorized Rural Development employees - State Director or State
Director\'s designee; Director, MHPD or designee; Director, MHSPM or
designee; Director, SFHPD or designee; Director, WWD or designee;
Director, CF or designee; and Director, B&I or designee.

\(i\) State Coordinator - The individual appointed by the State Director
who will be responsible for requesting commercial credit reports through
the National Office, verifying receipt of the reports, and assisting
County and District Office employees with questions and problems that
need to be resolved with the contractor.

§1910.108 [Circumstances requiring commercial credit
reports]{.underline}.

\(a\) Commercial credit reports will be requested for:

\(1\) [Existing nonprofit organizations]{.underline}. Reports will be
obtained for subsequent loan or grant requests only if the borrower or
grantee has had financial or management problems or the report will
assist in determining eligibility for an additional loan or grant.

\(2\) [Profit corporations and partnerships]{.underline}. If the
organization is newly formed and has not established any records of its
activities as an organization, the credit report will provide useful
information on the principal members, stockholders or partners.
Individual credit reports may subsequently be requested on these persons
as determined by the appropriate program instructions. Reports for
subsequent loan grant requests will be obtained when the circumstances
outlined in 1910.108 (a)(l) exist.

\(3\) [Organizations with other interests]{.underline}. If an
organization has substantial interest in another organization, a credit
report for such other organization may be obtained in the same manner as
for the applicant.

\(4\) [General contractors and dealer-contractors]{.underline}. Credit
reports on these contractors will be obtained as required in appropriate
program instructions.

\(5\) [Transfers or other servicing actions]{.underline}. A report may
be ordered as Part of an MFH transfer or other servicing action
according to Subpart B of Part 1965 of this chapter.

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RD Instruction 1910-C

§1910.108 (a) (Con.)

\(6\) [B&I loan applicants]{.underline}. Credit reports will be ordered
for all B&I applicants unless the lender has furnished a commercial
credit report on the applicant or the applicant is a new business.

\(b\) Commercial credit reports will not be requested for:

\(1\) [Newly formed nonprofit/limited profit organizations]{.underline}.
Credit reports will not be obtained since such organizations will not
have established any record of activities.

\(2\) [Public bodies]{.underline}.

§§1910.109 - 1910.110 \[Reserved\]

§1910.111 [D&B Contract Specifications]{.underline}.

Reports must contain current information on domestic firms. Current
information is defined as information not more than 7 months old when
the report is received. Reports will include a coding system to uniquely
identify each commercial establishment; a summary of data contained in
the body of the report; identification of the establishment\'s primary
Standard Industrial Classification (SIC) code and total number of
employees; trade information; business history and confirmation of
ownership; identification of other corporate family members and
inter-company relationship details; public record items including U.C.C,
filings; biographical sketches of key management; current financial
statements, where available, and a summarized description of the
company\'s method of operation.

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(02-21-90) PN 128

RD Instruction 1910-C

§1910.112 [Unsatisfactory services]{.underline}.

Credit reports will be checked by the State Coordinator to be sure they
contain a summary section, payment section, finance, history and
operation. County and District Offices will refer questions regarding
commercial credit reports to the State Coordinator. Unresolved problems
or unsatisfactory service should be brought to the attention of the
appropriate program Division Director in the National Office. The only
exception will be if D&B is unable to find any credit history on the
subject. D&B will then provide a special response with the notation
that: \"We have been unable to ascertain that the individual on whom you
inquired is engaged in a business. (If you have information to the
effect that your inquiry is on a business, please let us know and a new
investigation will be made. Business and bank references will be
helpful).\" D&B does not provide reports on individuals not engaged in
business.

§1910.113 \[Reserved\]

§1910 114 [Procedure for ordering credit reports]{.underline}.

\(a\) When a County Supervisor or District Director decides a commercial
credit report is required or is needed, Exhibit A of this subpart will
be completed in accordance with the instructions for preparation and
forwarded to the State Office.

\(b\) The State Coordinator will forward the necessary information to
request a credit report under the RRH purchase order to the Assistant
Administrator, Housing, in the National Office via telemail. Requests
for a commercial credit report on a B&I, CF, or WWD application or
servicing action, under the B&I purchase order will be submitted to the
Director, B&I Division. This request may be by telephone or memoranda
and will include the applicant\'s name, address, city, state, and
telephone number.

\(c\) When the credit report is returned by the National Office, the
date of receipt and the State Coordinator\'s initials will be entered on
Exhibit A. The credit report should be promptly forwarded to the
requesting County or District Office.

\(d\) When a detail report of usage, on credit reports ordered under the
RRH purchase order, is furnished by D&B to the National Office, it will
be examined, verified and forwarded to the Finance Office. Detailed
reports furnished by D&B on credit reports ordered under the B&I
purchase order will not be sent to the Finance Office.

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RD Instruction 1910-C

§ 1910.115 [Collecting fees]{.underline}.

\(a\) When a credit report is needed under the RRH purchase order, the
fee indicated in § 1910.106(d) of this subpart will be collected from
the subject before the credit report is ordered. The amount of the fee,
the date it is collected and the signature of the collection official
will be entered on Exhibit A. The applicable information to request the
credit report will also be entered at this time. A copy of Exhibit A
will be retained in the applicant\'s file as evidence that the fee was
collected and the request was submitted to the State Office. A fee will
not be collected for credit reports requested under the B&I purchase
order.

\(b\) Collections for credit report fees will be promptly submitted to
the Finance Office on a separate Form RD 451-2, \"Schedule of
Remittances,\" or processed in AMAS as a Miscellaneous Collection for
MFH Credit report fees." in accordance with the Forms Manual Insert
(FMI) for the respective form. (Revised 02-24-05, SPECIAL PN.)

\(c\) Requests for and payment of credit reports for individuals will be
in accordance with Subpart B of Part 1910 of this chapter.

§ 1910.116 - 1910.150 \[Reserved\]

Attachment: Exhibit A

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## (Revision 1)

(02-21-90) PN 128

RD Instruction 1910-C

Exhibit A

Page 1

## Request for Commercial Credit Report

To: State Director

Attn: State Coordinator for

Commercial Credit Reports

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Name (1)

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Address (2)

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City State Zip Code

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\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Telephone (including area code) (3) Fund Code (4)

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Date (5)

\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_

Credit Report Date Collected (7) Collection

Fee (6) Official (8)

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\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

County Supervisor/District Director State/County/

District Code

TO BE COMPLETED BY STATE OFFICE ONLY:

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Date Ordered (9) State Coordinator (10)

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Date Received (11)

(02-24-05) SPECIAL PN

RD Instruction 1910-C

Exhibit A

Page 2

Instructions for Completion

> A. This exhibit shall be completed in an original and one copy. The
> original will be mailed to the State Office and the copy will be
> retained in the applicant/borrower files in the originating County or
> District Office. A copy of RD Form 451-2, \"Schedule of Remittances,\"
> be attached to this exhibit for the State Coordinator\'s reference.
> Items (1) through (10) will be completed in the following manner:

\(1\) Enter the exact legal name of the applicant, general contractor

or dealer-contractor for whom the credit report is requested.

\(2\) Enter the complete address, including zip code, of the subject

identified in (1) above.

\(3\) Enter the telephone number, including zip code, of the subject

identified in (1) above.

\(4\) Enter the loan fund code for the type of loan that will made.

For example: \"84-RRH, \"46-SFH\".

\(5\) Enter the date the credit report is requested by County or

District Office.

\(6\) Enter credit report fee.

\(7\) Enter date credit report fee is collected.

\(8\) Signed by collecting official.

\(9\) Enter the date the credit report is ordered by the State Office.

\(10\) State Office official responsible for commercial

credit reports will initial.

\(11\) Enter the date the credit report is received in the

State Office.

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