Federal Register / Vol. 89, No. 186 / Wednesday, September 25, 2024 / Rules and Regulations 78239 

1Title II of H.R. 9028, 118th Cong., under the 

heading ‘‘Community Development Loan 

Guarantees Program Account.’’ 

(1) Your age; 

(2) Your education and training; 

(3) Your work experience; 

(4) Your daily activities both before 

and after the date you say that you 

became disabled; 

(5) Your efforts to work; and 

(6) Any other evidence showing how 

your impairment(s) affects your ability 

to work. (In §§ 220.125 through 220.134, 

we discuss in more detail the evidence 

the Board needs when it considers 

vocational factors.) 

Dated: September 19, 2024. 

By Authority of the Board. 

Stephanie Hillyard, 

Secretary to the Board. 

[FR Doc. 2024–21777 Filed 9–24–24; 8:45 am] 

BILLING CODE 7905–01–P 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

24 CFR Part 570 

[FR–6483–N–01] 

Section 108 Loan Guarantee Program: 

Announcement of Fee To Cover Credit 

Subsidy Costs for FY 2025 and 

Solicitation of Comment 

AGENCY: Office of the Assistant 

Secretary for Community Planning and 

Development, HUD. 

ACTION: Announcement of fee; request 

for comments. 

SUMMARY: This document announces 

and solicits comment on the fee that 

HUD will collect from borrowers of 

loans guaranteed under HUD’s Section 

108 Loan Guarantee Program (Section 

108 Program) to offset the credit subsidy 

costs of the guaranteed loans pursuant 

to commitments awarded in Fiscal Year 

2025 in the event HUD is required or 

authorized by statute to do so, 

notwithstanding subsection (m) of 

section 108 of the Housing and 

Community Development Act of 1974. 

The fee to offset credit subsidy costs is 

changing from 1.64 percent in Fiscal 

Year 2024 to 0.82 percent in Fiscal Year 

2025. 

DATES: September 25, 2024. 

Comment Due Date: October 25, 2024. 

Applicability Date: October 28, 2024, 

unless after consideration of comments 

received, HUD determines a second 

Federal Register notification is 

necessary. If HUD determines a second 

Federal Register notification is 

necessary, it will indicate that on 

October 25, 2024 at https://

www.hud.gov/program_offices/comm_

planning/section108. 

ADDRESSES: Interested persons are 

invited to submit comments responsive 

to this document. Copies of all 

comments submitted are available for 

inspection and downloading at 

www.regulations.gov. To receive 

consideration as public comments, 

comments must be submitted through 

one of the two methods specified below. 

All submissions must refer to the above 

docket number and title. 

1. Electronic Submission of 

Comments. Interested persons may 

submit comments electronically through 

the Federal eRulemaking Portal at 

www.regulations.gov. HUD strongly 

encourages commenters to submit 

comments electronically. Electronic 

submission of comments allows the 

commenter maximum time to prepare 

and submit a comment, ensures timely 

receipt by HUD, and enables HUD to 

make them immediately available to the 

public. Comments submitted 

electronically through the 

www.regulations.gov website can be 

viewed by other commenters and 

interested members of the public. 

Commenters should follow the 

instructions provided on that site to 

submit comments electronically. 

2. Submission of Comments by Mail. 

Comments may be submitted by mail to 

the Regulations Division, Office of 

General Counsel, Department of 

Housing and Urban Development, 451 

7th Street SW, Room 10276, 

Washington, DC 20410–0500. 

No Facsimile Comments. Facsimile 

(FAX) comments will not be accepted. 

Public Inspection of Comments. All 

comments and communications 

properly submitted to HUD will be 

available for public inspection and 

copying between 8 a.m. and 5 p.m. 

weekdays at the above address. Due to 

security measures at the HUD 

Headquarters building, an advance 

appointment to review the public 

comments must be scheduled by calling 

the Regulations Division at (202) 708– 

3055 (this is not a toll-free number). 

HUD welcomes and is prepared to 

receive calls from individuals who are 

deaf or hard of hearing, as well as 

individuals with speech or 

communication disabilities. To learn 

more about how to make an accessible 

telephone call, please visit: https://

www.fcc.gov/consumers/guides/ 

telecommunications-relay-service-trs. 

Copies of all comments submitted are 

available for inspection and 

downloading at http://

www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: Paul 

Webster, Director, Financial 

Management Division, Office of Block 

Grant Assistance, Office of Community 

Planning and Development, U.S. 

Department of Housing and Urban 

Development, 451 7th Street, SW, Room 

7282, Washington, DC 20410; telephone 

number 202–402–4563 (this is not a tollfree number). HUD welcomes and is 

prepared to receive calls from 

individuals who are deaf or hard of 

hearing, as well as individuals with 

speech or communication disabilities. 

To learn more about how to make an 

accessible telephone call, please visit 

https://www.fcc.gov/consumers/guides/ 

telecommunications-relay-service-trs. 

FAX inquiries (but not comments) may 

be sent to Mr. Webster at 202–708–1798 

(this is not a toll-free number). 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Transportation, Housing and 

Urban Development, and Related 

Agencies Appropriations Act, 2015 

(division K of Public Law 113–235, 

approved December 16, 2014) (2015 

Appropriations Act) provided that ‘‘the 

Secretary shall collect fees from 

borrowers, notwithstanding subsection 

(m) of such section 108, to result in a 

credit subsidy cost of zero for 

guaranteeing . . .’’ Section 108 loans. 

Section 108(m) of the Housing and 

Community Development Act of 1974 

states that ‘‘No fee or charge may be 

imposed by the Secretary or any other 

Federal agency on or with respect to a 

guarantee made by the Secretary under 

this section after February 5, 1988.’’ 

Identical language was continued or 

included in the Department’s 

continuing resolutions and 

appropriations acts authorizing HUD to 

issue Section 108 loan guarantees 

during Fiscal Years (FYs) 2016 to 2024. 

HUD anticipates that the Fiscal Year 

(FY) 2025 HUD appropriations bill 

under consideration 1 also has identical 

language suspending the prohibition 

against charging fees for loans issued 

with Section 108 guarantees after 

February 5, 1988, and requiring that the 

Secretary collect fees from borrowers to 

result in a credit subsidy cost of zero for 

the Section 108 Program. 

On November 3, 2015, HUD 

published a final rule (80 FR 67626) that 

amended the Section 108 Program 

regulations at 24 CFR part 570 to 

establish additional procedures, 

including procedures for announcing 

the amount of the fee each fiscal year 

when HUD is required to offset the 

credit subsidy costs to the Federal 

Government to guarantee Section 108 


ddrumheller on DSK120RN23PROD with RULES1
78240 Federal Register / Vol. 89, No. 186 / Wednesday, September 25, 2024 / Rules and Regulations 

2 80 FR 67634 (November 3, 2015), 81 FR 68297 

(October 4, 2016), 82 FR 44518 (September 25, 

2017), 83 FR 50257 (October 5, 2018), 84 FR 35299 

(July 23, 2019), 85 FR 52479 (August 26, 2020), 86 

FR 59302 (October 27, 2021), 87 FR 53662 

(September 1, 2022), and 88 FR 73532 (October 26, 

2023) respectively. 

3U.S. Department of Housing and Urban 

Development, Study of HUD’s Section 108 Loan 

Guarantee Program, (prepared by Econometrica, 

Inc. and The Urban Institute), September 2012, at 

pp. 73–74. This fact has not changed since the 

issuance of this report. 

loans. For FYs 2016 to 2024, HUD 

published notifications to set the fees.2

II. FY 2025 Fee: 0.82 Percent of the 

Principal Amount of the Loan 

If authorized by statute, this 

document sets the fee for Section 108 

loan disbursements under loan 

guarantee commitments awarded for FY 

2025 at 0.82 percent of the principal 

amount of the loan. HUD will collect 

this fee from borrowers of loans 

guaranteed under the Section 108 

Program to offset the credit subsidy 

costs of the guaranteed loans pursuant 

to commitments awarded in FY 2025 if 

the FY 2025 HUD appropriations bill 

under consideration is enacted, or if 

HUD is otherwise required or 

authorized by statute to collect fees from 

borrowers to offset the credit subsidy 

costs of the guaranteed loans, 

notwithstanding subsection (m) of 

section 108 of the Housing and 

Community Development Act of 1974 

(42 U.S.C. 5308(m)). The calculation of 

the FY 2025 fee uses a similar 

calculation model as the FY 2016 to FY 

2024 fee notifications, but incorporates 

updated information regarding the 

composition of the Section 108 portfolio 

and the timing of the estimated future 

cash flows for defaults and recoveries. 

The calculation of the fee is also 

affected by the discount rates required 

to be used by HUD when calculating the 

present value of the future cash flows as 

part of the Federal budget process. HUD 

is also changing some of the underlying 

assumptions of the fee calculation for 

this fee announcement. 

As described in 24 CFR 570.712(b), 

HUD’s credit subsidy calculation is 

based on the amount required to reduce 

the credit subsidy cost to the Federal 

Government associated with making a 

Section 108 loan guarantee to the 

amount established by applicable 

appropriation acts. As a result, HUD’s 

credit subsidy cost calculations 

incorporated assumptions based on: (1) 

data on default frequency for municipal 

debt where such debt is comparable to 

loans in the Section 108 loan portfolio; 

(2) data on recovery rates on collateral 

security for comparable municipal debt; 

(3) the expected composition of the 

Section 108 portfolio by end users of the 

guaranteed loan funds (e.g., third-party 

borrowers and public entities); and (4) 

other factors that HUD determined were 

relevant to this calculation (e.g., 

assumptions as to loan disbursement 

and repayment patterns). HUD changed 

the assumptions underlying the fee 

calculations that had applied in 

previous fiscal years by (1) increasing 

the expected housing component of the 

Section 108 portfolio in anticipation of 

a Departmental initiative and (2) 

adjusting the projected repayment 

period for loans to accommodate more 

flexible repayment options to be made 

available under a Departmental 

initiative, resulting in more principal 

payments occurring in later years of the 

loan term. 

Taking these factors into 

consideration, HUD determined that the 

fee for disbursements made under loan 

guarantee commitments awarded in FY 

2025 will be 0.82 percent, which will be 

applied only at the time of loan 

disbursements. Note that future 

notifications may provide for a 

combination of upfront and periodic 

fees for loan guarantee commitments 

awarded in future fiscal years but, if so, 

HUD will provide the public an 

opportunity to comment if appropriate 

under 24 CFR 570.712(b)(2). 

The expected cost of a Section 108 

loan guarantee is difficult to estimate 

using historical program data because 

there have been no defaults in the 

history of the program that required 

HUD to invoke its full faith and credit 

guarantee or use the credit subsidy 

reserved each year for future losses.3

This is due to a variety of factors, 

including the availability of Community 

Development Block Grant (CDBG) funds 

as security for HUD’s guarantee as 

provided in 24 CFR 570.705(b). As 

authorized by Section 108 of the 

Housing and Community Development 

Act of 1974, as amended (42 U.S.C. 

5308), borrowers may make payments 

on Section 108 loans using CDBG grant 

funds. Borrowers may also make Section 

108 loan payments from other 

anticipated sources but continue to have 

CDBG funds available should they 

encounter shortfalls in the anticipated 

repayment source. Despite the 

program’s history of no defaults, Federal 

credit budgeting principles require that 

the availability of CDBG funds to repay 

the guaranteed loans cannot be assumed 

in the development of the credit subsidy 

cost estimate (see 80 FR 67629, 

November 3, 2015). Thus, the estimate 

must incorporate the risk that 

alternative sources are used to repay the 

guaranteed loan in lieu of CDBG funds, 

and that those sources may be 

insufficient. Based on the rate that 

CDBG funds are used annually for 

repayment of loan guarantees, HUD’s 

calculation of the credit subsidy cost 

must acknowledge the possibility of 

future defaults if those CDBG funds 

were not available. The fee of 0.82 

percent of the principal amount of the 

loan will offset the expected cost to the 

Federal Government due to default, 

financing costs, and other relevant 

factors. To arrive at this measure, HUD 

analyzed data on comparable municipal 

debt over an extended period. The 

estimated rate is based on the default 

and recovery rates for general purpose 

municipal debt and industrial 

development bonds. The cumulative 

default rates on industrial development 

bonds were higher than the default rates 

on general purpose municipal debt 

during the period from which the data 

were taken. These two subsectors of 

municipal debt were chosen because 

their purposes and loan terms most 

closely resemble those of Section 108 

guaranteed loans. 

In this regard, Section 108 guaranteed 

loans can be broken down into two 

categories: (1) loans that finance public 

infrastructure and activities to support 

subsidized housing (other than 

financing new construction) and (2) 

other development projects (e.g., retail, 

commercial, industrial). The 0.82 

percent fee was derived by weighting 

the default and recovery data for general 

purpose municipal debt and the data for 

industrial development bonds according 

to the expected composition of the 

Section 108 portfolio by corresponding 

project type. Based on the dollar amount 

of Section 108 loan guarantee 

commitments awarded from FY 2019 

through FY 2023 and expected Section 

108 guaranteed loans as part of a 

Departmental initiative, HUD expects 

that 71.7 percent of the Section 108 

portfolio will be similar to general 

purpose municipal debt and 28.3 

percent of the portfolio will be similar 

to industrial development bonds. In 

setting the fee at 0.82 percent of the 

principal amount of the guaranteed 

loan, HUD expects that the amount 

generated will fully offset the cost to the 

Federal Government associated with 

making guarantee commitments 

awarded in FY 2025. Note that the fee 

decreased from 1.64 percent in FY 2024 

to 0.82 percent in FY 2025, a decrease 

of 0.82 percentage points in the level of 

fee charged. 

This document establishes a 

statutorily required fiscal requirement 

in the form of a fee based on rate and 

cost determinations that does not 

constitute a development decision that 


ddrumheller on DSK120RN23PROD with RULES1
Federal Register / Vol. 89, No. 186 / Wednesday, September 25, 2024 / Rules and Regulations 78241 

affects the physical condition of specific 

project areas or building sites. 

Accordingly, under 24 CFR 50.19(c)(6), 

this document is categorically excluded 

from environmental review under the 

National Environmental Policy Act of 

1969 (42 U.S.C. 4321). 

III. Solicitation of Comment 

HUD solicits comment on the fee rate 

to be imposed on the Section 108 

Program. HUD will publish a second 

Federal Register notice, if necessary, 

after consideration of public comments. 

This announced fee goes will become 

applicable on October 28, 2024 unless 

HUD indicates its intent to publish a 

second Federal Register notice through 

a notice on https://www.hud.gov/ 

program_offices/comm_planning/ 

section108 on October 25, 2024. 

Marion M. McFadden, 

Principal Deputy Assistant Secretary for 

Community Planning and Development. 

[FR Doc. 2024–21706 Filed 9–24–24; 8:45 am] 

BILLING CODE 4210–67–P 

DEPARTMENT OF THE TREASURY 

United States Mint 

31 CFR Part 100 

Exchange of Coin 

AGENCY: United States Mint, Department 

of the Treasury. 

ACTION: Final rule. 

SUMMARY: This final rule removes 

Treasury regulations relating to the 

exchange of bent, partial, fused, and 

mixed coins. The removal will end the 

exchange program for bent and partial 

coin. 

DATES: Effective Date: October 25, 2024. 

FOR FURTHER INFORMATION CONTACT: 

Apryl Whitaker, Senior Legal Counsel, 

Office of the Chief Counsel, United 

States Mint, at (202) 354–7938 or 

rulemaking@usmint.treas.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Treasury regulations appearing at 

31 CFR 100.11 are promulgated under 

31 U.S.C. 321 and relate to the exchange 

of bent and partial coin. The last 

amendment to 31 CFR part 100, subpart 

C, was on December 20, 2017. In August 

2018, the United States Mint suspended 

the redemption program due to the 

possibility of unlawful material being 

submitted for redemption. On May 5, 

2021, the United States Mint issued a 

notice of proposed rulemaking 

proposing certain revisions to these 

regulations (86 FR 23877), which was 

withdrawn on May 3, 2024 (89 FR 

36721). The United States Mint 

subsequently decided to close the bent 

and partial coin exchange program. 

For many years, the United States 

Mint has redeemed bent and partial 

coins for full face value. However, 

circumstances surrounding the 

redemption program have materially 

changed. Today submissions must be 

carefully evaluated to ensure that 

counterfeit coins are not accepted to the 

program, and the condition of many 

coins, particularly large volumes of 

coins damaged by recycling or 

industrial processes, makes 

authentication increasingly difficult and 

time-consuming. In addition, the 

volume of coins submitted for possible 

redemption has greatly increased, and 

counterfeits have been increasingly 

identified in imported coins intercepted 

by law enforcement, as well as in 

several large submissions to the 

redemption program. The result of these 

changes is that there is no financially 

responsible way to ensure the integrity 

of the redemption program and to the 

meet the full level of demand. The 

United States Mint’s capacity to process 

mutilated coins is limited by physical 

storage capacity, caseload complexity, 

and workload. Authentication 

procedures require extensive time and 

resources. The United States Mint has 

dedicated substantial time and 

resources to the bent and partial coin 

exchange program, in addition to 

operating the program at a loss by 

paying out face value for redemptions. 

In 89 FR 36721, May 3, 2024, the 

United States Mint issued a notice of 

proposed rulemaking (NPRM) to remove 

regulations relating to the exchange of 

bent and partial coins, and it requested 

comments on the proposed revisions. In 

the NPRM, the Mint proposed to end the 

exchange program for bent and partial 

coin. As discussed below, the United 

States Mint has considered the 

comments received and has concluded 

that the proposed regulations will be 

adopted as a final rule. 

II. Public Participation 

The United States Mint received 35 

comments in response to the NPRM 

proposing to end the Mutilated Coin 

Redemption Program. Eight of these 

comments were provided by 

organizations that identified as 

businesses, two identified as a trade 

association, and the remainder of the 

comments were provided by unknown, 

anonymous, or individual persons. The 

comments are available at 

www.regulations.gov. 

Disposing of Coins 

Some commenters were concerned 

about the disposal of dimes, quarters, 

half-dollar, and dollar coins. The 

proposed rule indicated correctly that 

the melting of dimes, quarters, halfdollar, and dollar coins is not regulated 

by the United States Mint. There is no 

prohibition on melting dimes, quarters, 

half-dollar, and dollar coins for nonfraudulent purposes. Some commenters 

expressed concern that 18 U.S.C. 331 

criminalizes the melting of all U.S. 

coins. This statute, however, 

specifically addresses certain behavior 

that is conducted with the intent to 

defraud and does not address coins 

melted without fraudulent intent and 

consistent with 31 CFR part 82. 

While there is a prohibition against 

melting pennies and nickels, there is a 

specific exception at 31 CFR 82.2 for 

coins melted or treated incidental to 

recycling other materials if (1) the coins 

were not added to the other materials 

for their metallurgical value, (2) the 

volumes of the coins, relative to the 

volumes of the other materials recycled, 

makes it clear that the presence of such 

coins is merely incidental, and (3) the 

separation of the coins from the other 

materials would be impracticable or cost 

prohibitive. See 31 CFR 82.2(c). This 

exception extends to the melting of 

coins that become mutilated due to 

treatment that is itself within the scope 

of the exception. If an exception does 

not apply, then applications for licenses 

to melt pennies and nickels should be 

transmitted to the Director, United 

States Mint; 801 9th Street NW, 

Washington, DC 20220. See 31 CFR 

82.2(f). 

Some individuals were concerned 

about how they can dispose of their bent 

or partial coins. Individuals can inquire 

of their local scrap metal dealers. 

Lack of Capacity 

Some commenters indicated that the 

United States Mint’s assertion that it 

lacks the capacity to process large 

volumes of bent or partial coin is 

disingenuous, because, in the past, large 

submissions of bent or partial coin were 

delivered directly to a third-party 

contractor, not to the United States 

Mint. However, after the program was 

suspended in 2018, the United States 

Mint developed new authentication 

techniques and procedures as 

recommended by the Treasury 

Department’s Office of Inspector 

General to test and authenticate the 

genuineness of coins. To effectively 

authenticate the material with the new 

counterfeit detection methods that the 

United States Mint developed, the 


ddrumheller on DSK120RN23PROD with RULES1