Rural Equal Aid Act
Bill: H.R.498 | Sponsor: Rep. Axne, Cynthia (D-IA)
Policy area: Agriculture and Food

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.

To authorize the Secretary of Agriculture to subsidize payments on 
loans made under certain rural development loan programs, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Rural Equal Aid Act''.

SEC. 2. SUBSIDY FOR CERTAIN RURAL DEVELOPMENT LOAN PAYMENTS.

    (a) Definition of Covered Loan.--In this section, the term 
``covered loan'' means a loan that is--
            (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 note; Public Law 99-198) or section 
        310H of the Consolidated Farm and Rural Development Act (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'') shall, subject to 
        paragraph (2), pay the principal, interest, and any associated 
        fees that are owed on a covered loan in a regular servicing 
        status--
                    (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.
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