UNITED STATES DEPARTMENT OF AGRICULTURE 

Rural Electrification Administration 

August 15, l969*

Supersedes 9/2/65

REA BULLETIN 2-1 (Electric) 

REA BULLETIN 301-1 (Telephone)

RD-GD-1969-02

SUBJECT: Guiding Statement of REA Policy Concerning Its Relationship 

With Borrowers

I. Purpose: To set forth policy concerning the relationship between

the Rural Electrification Administration and its borrowers.

II. Objectives: The objectives or the Rural Electrification Administration

programs are to provide, through self-liquidating loans under the Rural

Electrification Act of 1936, as amended, and through technical

assistance, adequate, dependable electric and telephone service

sufficient to meet the needs of beneficiaries of the Act, both farm

and nonfarm, in rural areas on an area coverage basis, under rates

and conditions that permit full and productive use of these utility

services.

III. Policy: To achieve program objectives, and to protect loan security,

REA will in its relationships with borrowers, base its activities on

the following considerations:

A. That each borrower is: (1) an independent corporate body subject

to all applicable laws and regulations; (2) responsible for the

efficient and effective management of its own affairs, including

proper and successful construction and operation of its system;

and (3) expected to repay all indebtedness on or ahead of schedule

according to the terms of its loan(s) and established policy.

B. That REA activities will be carried on in a manner to help

develop the resources and ability of borrowers to meet their

needs, handle their own affairs effectively, and achieve as

soon as possible the internal strength and soundness to assure

its success as an independent enterprise. As borrowers develop

adequate internal strength and financial soundness, direct REA

assistance will diminish accordingly

C. That as required REA will furnish technical and management

assistance to borrowers to help further the objectives of the

Rural Electrification Act and protect the security of the

Government’s loan.

*General restatement of REA policy.

Disclaimer: The contents of this guidance document does not have 

the force and effect of law and is not meant to bind the public in 

any way. This document is intended only to provide clarity to the 

public regarding existing requirements under the law or agency 

policies.
Bulletin 2-1:301-1 

Page 2

D. That REA will establish terms and conditions in loan security

documents and policies and procedures to assure the proper

implementation of its objectives.

E. That in its reporting requirements, REA will require only those

reports and audits that are essential to the protection of loan

security, achievement of the objectives of the Act, and that may

otherwise be requisite to the administration of a Federal Government program.

F. That REA policies and practices will be designed to protect the

interests of consumers and the public, and to develop and protect

the image of the program in terms of the objectives of the Rural

Electrification Act.

G. That for cooperative borrowers, REA will encourage active

participation of members in the affairs of their organization

to assure maximum benefits to themselves and to the development of

their rural communities.

Administrator

Index

BORROWERS

REA Relationship With

POLICY

REA Relationship With Borrowers