Source: https://www.federalregister.gov/articles/2003/10/28/03-27046/loan-payments-and-collections
Timestamp: 2015-05-24 11:19:04
Document Index: 175566714

Matched Legal Cases: ['art 1930', 'ART 2045', 'art 1940', 'ART 1902', 'art 1902', '§ 1902', 'art 1902', '§ 1902', 'ART 1930', 'art 1930', 'art 1930', 'art 1942', '§ 1942', '§ 1942', '§ 1942', 'ART 1944', 'art 1944', '§ 1944', '§ 1944', '§ 1944', 'art 1948', '§ 1948', 'art 1951', '§ 1951', '§ 1951', '§ 1951', '§ 1951', '§ 1951', 'ART 1955', 'art 1955', '§ 1955', '§ 1955', '§ 1955', '§ 1955', '§ 1955', '§ 1955', '§ 1955', '§ 1955', '§ 1955', '§ 1955', '§ 1955', '§ 1955', '§ 1955', 'ART 1956', 'art 1956', '§ 1956', '§ 1956', '§ 1956', 'ART 1962', 'art 1962', '§ 1962', 'ART 1965', 'art 1965', '§ 1965', 'art 1951', 'art 1944', 'art 1980', '§ 1980', 'ART 2045', 'art 2045', '§ 2045']

Federal Register | Loan Payments and Collections
Loan Payments and Collections
A Rule by the Rural Housing Service, the Rural Business-Cooperative Service, the Rural Utilities Service, and the Farm Service Agency on
Publication Date: Tuesday, October 28, 2003
68 FR 61329
-61333 (5 pages)
7 CFR 2045
Document Number: 03-27046
Shorter URL: https://federalregister.gov/a/03-27046 Related Topics
The Agencies are revising their internal loan payment and collections regulations to replace the current regulations. This action is necessary since existing regulations are obsolete and do not accurately reflect the current payment and collections methodologies employed by the Agencies. The intended effect is to simplify and update the regulations; update internal control procedures for safeguarding collections; remove references to the Concentration Banking System (CBS) procedures which were eliminated in November 1997; and to add procedures for new electronic payment methods that are currently in use by the Agencies (Preauthorized Debits, FedWire, Customer Initiated Payments, etc.). These amended regulations are to ensure the Agencies' field offices have current guidance on the payment and collection methods available and how to use them.
Subpart A—Disbursement of Loan, Grant, and Other Funds
Exhibit H to Subpart C of Part 1930—Interest Credits on Insured Rural Rental Housing and Rural Cooperative Housing Loans
Subpart I—Self Help Technical Assistance Grants
Subpart J—Management and Collection of Nonprogram (NP) Loans
Subpart K—Predetermined Amortization Schedule System (PASS) Account Servicing
Subpart B—Debt Settlement-Farm Loan Programs and Multi-Family Housing
Subpart B—Security Servicing for Multiple Housing Loans
PART 2045—GENERAL
Subpart JJ—Rural Development—Utilization of Gratuitous Services
Mark Huntley, Accountant, Office of the Deputy Chief Financial Officer, Policy and Internal Review Division, U.S. Department of Agriculture, STOP 33, PO Box 200011, St. Louis, MO 63120, telephone: (314) 539-6063.
This action is not subject to the provisions of Executive Order 12866 since it involves only internal Agency management. This action is not published for prior notice and comment under the Administrative Procedure Act since it involves only internal Agency management and publication for comment is unnecessary and contrary to the public interest.
10.411—Rural Housing Site Loans and Self-Help Housing LandDevelopment Loans
10.421—Indian Tribes and Tribal Corporation Loans
10.760—Water and Waste Disposal Systems for Rural Communities
10.770—Water and Waste Disposal Loans and Grants (Section 306C)
Programs with Catalog of Federal Domestic Assistance numbers 10.405, 10.407, 10.411, 10.415, 10.420, 10.421, 10.427, 10.760, 10.766, 10.767, 10.768, 10.770, and 10.854 are subject to the provisions of Executive Order 12372 which requires intergovernmental consultation with State and local officials.
Programs with Catalog of Federal Domestic Assistance numbers 10.404, 10.406, 10.410, and 10.417 are excluded from the scope of Executive Order 12372.
The information collection requirements contained in this rule have been approved by the Office of Management and Budget (OMB) under the provisions of 44 U.S.C. chapter 35 and were assigned OMB control number 0575-0184 in accordance with the Paperwork Reduction Act of 1995. No person is required to respond to a collection of information unless it displays a valid OMB control number. This rule does not impose any new information collection requirements from those approved by OMB.
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub. L. 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, the Agencies generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures to State, local, or tribal governments, in the aggregate, or to the private sector, of $100 million or more in any one year. When such a statement is needed for a rule, section 205 of the UMRA generally requires the agencies to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, more cost-effective, or least burdensome alternative that achieves the objectives of the rule.
This document has been reviewed in accordance with 7 CFR part 1940, subpart G, “Environmental Program.” The Agencies have determined that this final action does not constitute a major Federal action significantly affecting the quality of human environment, and in accordance with the National Environmental Policy Act of 1969, 42 U.S.C. 4321 et seq., an Environmental Impact Statement is not required.
In November 1997 Rural Development discontinued using the Concentration Banking System (CBS). CBS was a collection system in which Rural Development field offices would deposit loan payments and collections they received in Treasury Limited Accounts (TLA's) at local banks. Daily, the concentrator bank (Mercantile Bank in St. Louis, MO) would sweep all local bank TLA's and deposit the funds with Treasury. Rural Development field offices would send the detailed loan payment information to the Rural Development Finance Office (FO) in St. Louis, MO. The FO would reconcile the detailed loan payment data with the deposit information and credit the borrower accounts for the payment.
In September 1997, Rural Development implemented the Rural Housing Service wholesale lockbox system. The wholesale lockbox significantly reduced collections received in field offices and it was determined that CBS was no longer cost effective to continue operating. In addition, since 1997, Rural Development has expanded its use of electronic collection methods (e.g., Preauthorized Debits, Customer Initiated Payments, FedWire, etc.).
The Farm Service Agency (FSA) payment collection policies are established in internal agency handbooks. While collections under some FSA programs were processed according to 7 CFR 1951, subpart B, prior to the USDA Reorganization Act, FSA no longer utilizes this subpart.
For the reasons set forth in the preamble, chapter XVIII, title 7, Code of Federal Regulations is amended as follows:
PART 1902—SUPERVISED BANK ACCOUNTS Back to Top
1.The authority citation for part 1902 revised to read as follows: Authority:
5 U.S.C. 301; 7 U.S.C. 1989; 7 U.S.C. 6991, et seq.; 42 U.S.C. 1480; Reorganization Plan No. 2 of 1953 (5 U.S.C. App.).
Subpart A—Disbursement of Loan, Grant, and Other Funds Back to Top
§ 1902.8 [Removed and Reserved]
2.Section 1902.8 is removed and reserved. Subpart C—[Removed and Reserved] Back to Top
3.Subpart C of part 1902 consisting of §§ 1902.101 through 1902.150 is removed and reserved. PART 1930—GENERAL Back to Top
4.The authority citation for part 1930 continues to read as follows: Authority:
5 U.S.C. 301; 7 U.S.C. 1989; 16 U.S.C. 1005
Subpart C—Management and Supervision of Multiple Family Housing Borrowers and Grant Recipients Back to Top
5.In exhibit H the introductory text of paragraph IX is revised to read as follows: Exhibit H to Subpart C of Part 1930—Interest Credits on Insured Rural Rental Housing and Rural Cooperative Housing Loans Back to Top
IX Project Payments: With each payment made, the borrower will complete Form RD 1944-29. The agency representative will transmit the payments to the Finance Office.
6.The authority citation for part 1942 continues to read as follows: Authority:
5 U.S.C. 301; 7 U.S.C. 1932; 7 U.S.C. 1989; and 16 U.S.C. 1005.
7.Section 1942.7(d) is revised to read as follows: § 1942.7 Loan closing.
(d) Unused funds. Obligated funds planned for project development which remain after all authorized costs have been provided for will be disposed of in accordance with § 1942.17(p)(6) of this subpart.
§ 1942.19 [Amended]
8.Paragraph (h)(6) of section 1942.19 is removed and reserved. PART 1944—HOUSING Back to Top
9.The authority citation for part 1944 continues to read as follows: Authority:
Subpart D—Farm Labor Housing Loan and Grant Policies, Procedures, and Authorizations Back to Top
§ 1944.175 [Amended]
10.Paragraph (e) of section 1944.175 is removed and reserved. § 1944.181 [Amended]
11.Paragraph (b)(3)(ii) of section 1944.181 is removed and reserved. Subpart I—Self Help Technical Assistance Grants Back to Top
12.Section 1944.426(a)(1) is revised to read as follows: § 1944.426 Grant closeout.
(1) The grantee will immediately refund to Rural Development any balance of grant funds that are not committed for the payment of authorized expenses.
13.The authority citation for part 1948 continues to read as follows: Authority:
14.Section 1948.90(b)(4) is revised to read as follows: § 1948.90 Land transfers.
15.The authority citation for part 1951 continues to read as follows: Authority:
Subpart A—Account Servicing Policies Back to Top
§ 1951.6 [Removed and Reserved]
16.Section 1951.6 is removed and reserved. Subpart B—[Removed and Reserved] Back to Top
17.Subpart B consisting of §§ 1951.51 through 1951.55 is removed and reserved. Subpart E—Servicing of Community and Direct Business Programs Loans and Grants Back to Top
18.The introductory text of section 1951.221 is revised to read as follows: § 1951.221 Collections, payments and refunds.
Subpart J—Management and Collection of Nonprogram (NP) Loans Back to Top
19.The first sentence of section 1951.455(e) is revised to read as follows: § 1951.455 NP loan making for Single Family Housing (SFH) and farm property (real and chattel).
(e) Downpayment. A downpayment must be collected at closing. * * *
Subpart K—Predetermined Amortization Schedule System (PASS) Account Servicing Back to Top
§ 1951.506 [Amended]
20.Paragraphs (b) and (c) of section 1951.506 are removed and reserved. PART 1955—PROPERTY MANAGEMENT Back to Top
21.The authority citation for part 1955 continues to read as follows: Authority:
Subpart B—Management of Property Back to Top
22.Section 1955.55(e) is revised to read as follows: § 1955.55 Taking abandoned real or chattel property into custody and related actions.
(e) Income and costs. Income received from the property will be applied to the borrower's account as an extra payment. Expenditures will be charged to the borrower's account as a recoverable cost.
23.In section 1955.62 the introductory text of paragraph (b)(1) is revised to read as follows: § 1955.62 Removal and disposition of nonsecurity personal property from inventory real property.
(1) If a reasonable amount can likely be realized by the agency from sale of the personal property, it may be sold at public sale. Items under lien will be sold first and the proceeds up to the amount of the lien paid to the lienholders less a pro rata share of the sale expenses. Proceeds from sale of items not under lien and proceeds in excess of the amount due a lienholder will be remitted and applied in the following order:
24.In section 1955.66 the introductory text of paragraph (l) is revised to read as follows: § 1955.66 Lease of real property.
(l) Lease income. Lease proceeds will be applied as follows:
Subpart C—Disposal of Inventory Property Back to Top
25.Section 1955.109(c) is revised to read as follows: § 1955.109 Processing and closing (CONACT).
(c) Form of payment. Payments at closing will be in the form of cash, cashier's check, certified check, postal or bank money order, or bank draft made payable to the Agency.
26.Section 1955.117(d) is revised to read as follows: § 1955.117 Processing credit sales on program terms (housing).
(d) Downpayment. When a downpayment is made, it will be collected at closing.
27.In section 1955.118 paragraphs (a) and (b)(4) are revised to read as follows: § 1955.118 Processing cash sales or MFH credit sales on NP terms.
(a) Cash sales. Cash sales will be closed by the servicing official collecting the purchase price (less any earnest money deposit or bid deposit) and delivering the deed to the purchaser.
(4) Downpayment. A downpayment of not less than 10 percent of the purchase price is required at closing.
§ 1955.120 [Amended]
28.The last sentence in section 1955.120 is removed. 29.Section 1955.122(e) is revised to read as follows: § 1955.122 Method of sale (chattel).
(e) Negotiated sale. Perishable acquired items and crops (except timber) and chattels for which no acceptable bid was received from auction or sealed bid methods may be sold by direct negotiation for the best price obtainable. No public notice is required to negotiate with interested parties including prior bidders. Justification for the use of this method of sale will be documented.
30.Section 1955.123(b) is revised to read as follows: § 1955.123 Sale procedures (chattel).
(b) Receipt of payment. Payment will be by cashier's check, certified check, postal or bank money order or personal check (not in excess of $500) made payable to the agency. Cash may be accepted if it is not possible for one of these forms of payment to be used. Third party checks are not acceptable. If full payment is not received at the time of sale, the offer will be documented by Form RD 1955-45 or Form RD 1955-46 where the chattel is sold jointly with real estate by regular sale.
31.Section 1955.130(e)(2) is revised to read as follows: § 1955.130 Real estate brokers.
(2) Offeror default. When a contract is cancelled due to offeror default, the earnest money will be delivered to and retained by the agency as full liquidated damages.
§ 1955.139 [Amended]
32.In section 1955.139 the last sentence in paragraph (a)(2) and the second sentence in paragraph (a)(3)(iv) are removed. 33.The first sentence of Section 1955.147(e) is revised to read as follows: § 1955.147 Sealed bid sales.
(e) Failure to close. If a successful bidder fails to perform under the terms of the offer, the bid deposit will be retained as full liquidated damages. * * *
§ 1955.148 [Amended]
34.In Section 1955.148 the last three sentences are removed. PART 1956—DEBT SETTLEMENT Back to Top
35.The authority citation for part 1956 continues to read as follows: Authority:
5 U.S.C. 301; 7 U.S.C. 1989; 31 U.S.C. 3711; 42 U.S.C. 1480.
Subpart B—Debt Settlement-Farm Loan Programs and Multi-Family Housing Back to Top
§ 1956.85 [Amended]
36.Paragraph (a)(2) of section 1956.85 is removed and reserved. Subpart C—Debt Settlement—Community and Business Programs Back to Top
§ 1956.139 [Amended]
37.Paragraph (b) of section 1956.139 is removed and reserved: § 1956.143 [Amended]
38.Paragraph (g)(2) of section 1956.143 is removed and reserved. PART 1962—PERSONAL PROPERTY Back to Top
39.The authority citation for part 1962 continues to read as follows: Authority:
Subpart A—Servicing and Liquidation of Chattel Security Back to Top
§ 1962.49 [Amended]
40.Paragraph (e)(3)(ii) of section 1962.49 is removed and reserved. PART 1965—REAL PROPERTY Back to Top
41.The authority citation for part 1965 continues to read as follows: Authority:
Subpart B—Security Servicing for Multiple Housing Loans Back to Top
42.Section 1965.61(a) is revised to read as follows: § 1965.61 General loan servicing requirements.
(a) Payments. Payments will be handled in accordance with subpart A of part 1951 of this chapter, and subparts D and E of part 1944 of this chapter.
43.The authority citation for part 1980 is revised to read as follows: Authority:
7 U.S.C. 1989.
§ 1980.461 [Removed and Reserved]
44.Section 1980.461 is removed and reserved. PART 2045—GENERAL Back to Top
45.The authority citation for part 2045 is revised to read as follows: Authority:
7 U.S.C. 1989; 42 U.S.C. 1480.
Subpart JJ—Rural Development—Utilization of Gratuitous Services Back to Top
46.The last sentence of section 2045.1754(c) is revised to read as follows: § 2045.1754 Scope of gratuitous services performed.
(c) * * * Such persons, except Construction Inspectors may, when under direct supervision of County Supervisors, act as Collection Officers and be allowed to use receipt books.
[FR Doc. 03-27046 Filed 10-27-03; 8:45 am]