View all text of Subpart B [§ 5001.101 - § 5001.200]
§ 5001.132 - Maintenance of approved lender status.
Continuation of approved lender status under this part is not automatic. Lenders may lose their approved lender status as described in paragraph (a) of this section. The Agency may also revoke a lender's status as an approved lender or debar the approved lender, as described in paragraph (b) of this section.
(a) Loss of approved lender status. A lender will lose its approved status if it—
(1) Fails to conform with the provisions of this part or the applicable guaranteed loan program identified in § 5001.1 of this part;
(2) Has no outstanding guaranteed loans with the Agency for five consecutive years;
(3) Is a regulated lending entity and fails to remain in good standing with its regulator;
(4) Is a non-regulated lending entity and fails to renew its approval status within 5 years of the expiration date of the lender's agreement.
(b) Revocation of approved status and debarment of lender. The Agency can revoke a lender's status as an approved lender at any time for cause as specified in the lender's agreement. A decision to revoke a lender's approved status will be made by the Agency and the lender will be notified in writing. The revocation may apply to all branches of the lender, specific branches, or personnel, as appropriate. The lender must revoke the level II eAuthentication privileges of all individuals included in the revocation notice. Cause for revoking lender status includes, but is not necessarily limited to, the circumstances identified in paragraphs (b)(1) through (14) of this section.
(1) Guaranteed loans originated by the lender cause substantial financial loss to the Agency.
(2) Failure to maintain status as an approved lender under the applicable regulations in effect when the lender obtained approved lender status. For lenders approved under this part, this means maintaining compliance with the requirements set forth in § 5001.130.
(3) Conviction of the lender or any of its officers for criminal acts in connection with any loan transaction, whether or not the loan was guaranteed by the Agency.
(4) Violation of usury laws in connection with any loan transaction whether or not the loan was guaranteed by the Agency.
(5) Negligent loan origination.
(6) Knowingly submitting false information when requesting a loan guarantee or basing a loan guarantee request on information known to be false or which the lender should have known to be false.
(7) Failure to correct any Agency-cited deficiency in loan documents in a timely manner.
(8) Failure to provide for adequate construction planning and monitoring in connection with any guaranteed loan to ensure that the project will be completed with the available funds.
(9) Negligent loan servicing.
(10) Failure to obtain and maintain the required collateral for any guaranteed loan.
(11) Using guaranteed loan funds for purposes other than those specifically approved by the Agency in the conditional commitment or amendment thereof.
(12) Violation of any term of the lender's agreement.
(13) Failure to submit reports required by the Agency in a timely manner.
(14) Violation of applicable nondiscrimination laws, including, but not limited to, statutes, regulations, USDA Departmental Regulations, the USDA Non-Discrimination Statement, and the Equal Credit Opportunity Act. USDA's Non-Discrimination Statement is located on the Agency's website, see usda.gov/non-discrimination-statement. In addition to revoking the lender's status, the Agency may debar the lender in compliance with 2 CFR part 180.
(c) Servicing of outstanding loans. Any lender who loses its status as an approved lender under any of the conditions identified in paragraph (a) or (b) of this section must reapply under the provisions of § 5001.130 to be reinstated as an approved lender. A lender who loses its approved lender status must continue to service any outstanding guaranteed loans in conformance with the lender's agreement last in effect and the applicable regulation under which the lender became an approved lender. In addition, such lenders cannot submit requests for new loan guarantees.