Rural Equal Aid Act

To authorize the Secretary of Agriculture to subsidize payments on loans made under certain rural development loan programs, and for other purposes. 1. Short title This Act may be cited as the Rural Equal Aid Act 2. Subsidy for certain rural development loan payments (a) Definition of covered loan In this section, the term covered loan (1) made by an intermediary lender to an ultimate recipient using a loan received under section 1323 of the Food Security Act of 1985 ( 7 U.S.C. 1932 Public Law 99–198 7 U.S.C. 1936b Public Law 113–79 (2) made by a microenterprise development organization to a microentrepreneur under section 379E of the Consolidated Farm and Rural Development Act ( 7 U.S.C. 2008s (3) a community facility loan made or guaranteed under section 306(a)(1) of the Consolidated Farm and Rural Development Act; or (4) guaranteed under section 310B(g) of the Consolidated Farm and Rural Development Act. (b) Principal and interest payments (1) In general The Secretary of Agriculture (referred to in this section as the Secretary (A) with respect to a covered loan made before the date of enactment of this Act and not on deferment, for the 9-month period beginning with the next payment due on the covered loan; (B) with respect to a covered loan made before the date of enactment of this Act and on deferment, for the 9-month period beginning with the next payment due on the covered loan after the deferment period; and (C) with respect to a covered loan made during the period beginning on the date of enactment of this Act and ending on the date that is 6 months after that date of enactment, for the 9-month period beginning with the first payment due on the covered loan. (2) Limitation on payment A single monthly payment of principal, interest, and associated fees made under paragraph (1) with respect to a covered loan in the last 3 months of the 9-month period described in paragraph (1) shall not exceed $9,000. (3) Timing of payment The Secretary shall begin making payments under paragraph (1) on a covered loan not later than 30 days after the date on which the first payment described in that paragraph is due. (4) Application of payment Any payment made by the Secretary under paragraph (1) shall be applied to the covered loan such that the borrower is relieved of the obligation to pay that amount. (c) Other requirements The Secretary shall— (1) communicate and coordinate with the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and State bank regulators to encourage those entities to not require lenders to increase their reserves on account of receiving payments made by the Secretary under subsection (b); (2) waive statutory limits on maximum loan maturities for any covered loan durations where the lender provides a deferral and extends the maturity of covered loans during the 1-year period following the date of enactment of this Act; and (3) when necessary to provide more time because of the potential of higher volumes, travel restrictions, and the inability to access some properties during the COVID–19 pandemic, extend lender site visit requirements to— (A) not more than 60 days (which may be extended at the discretion of the Secretary) after the occurrence of an adverse event, other than a payment default, causing a loan to be classified as in liquidation; and (B) not more than 90 days after a payment default. (d) Effect Nothing in this section limits the authority of the Secretary to make payments pursuant to subsection (b) with respect to a covered loan solely because the covered loan has been sold in the secondary market.

Summary: Rural Equal Aid Act This bill requires the Department of Agriculture (USDA) to pay the principal, interest, and any associated fees owed on loans made under certain rural development loan programs for a nine-month period. A single monthly payment of principal, interest, and associated fees with respect to a loan in the last three months of the nine-month period must not exceed $9,000. USDA must also encourage the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and state bank regulators to not require lenders to increase their reserves on account of receiving such payments made by USDA. USDA must waive statutory limits on maximum loan maturities for certain loan durations where the lender provides a deferral and extends the maturity of such loans and, when necessary to provide more time because of difficulties during the COVID-19 (i.e., coronavirus disease 2019) pandemic, extend lender site visit requirements.