7 USC 2001 - Debt restructuring and loan servicing

1 See References in Text note below.

of this title, a decision shall be made at each level in the appeals process within 45 days after the receipt of the appeal or request for further review.

Editorial Notes

References in Text

This chapter, referred to in subsecs. (a), (c)(5), and (k), was in the original “this title”, meaning title III of Puspan. L. 87–128, Aug. 8, 1961, 75 Stat. 307, known as the Consolidated Farm and Rural Development Act, which is classified principally to this chapter. For complete classification of title III to the Code, see Short Title note set out under section 1921 of this title and Tables.

Section 1983span of this title, referred to in subsec. (h), was repealed by Puspan. L. 103–354, title II, § 281(c), Oct. 13, 1994, 108 Stat. 3233.

Amendments

2002—Subsec. (e)(7)(D). Puspan. L. 107–171 added subpar. (D).

2000—Subsec. (e)(7). Puspan. L. 106–387 added par. (7).

1999—Subsec. (c)(3)(C). Puspan. L. 106–31 substituted “110 percent” for “100 percent”.

1998—Subsec. (c)(3)(C). Puspan. L. 105–277, § 101(a) [title VIII, § 808], substituted “100 percent” for “110 percent”.

Subsec. (e)(6). Puspan. L. 105–277, § 101(a) [title VIII, § 807], added par. (6).

1996—Subsec. (c)(3)(C). Puspan. L. 104–127, § 645(1)(A), added subpar. (C) and struck out span and text of former subpar. (C). Text read as follows:

“(i) Assumption.—For the purpose of assessing under subparagraph (A) the ability of a borrower to meet debt obligations and continue farming operations, the Secretary shall assume that the borrower needs up to 105 percent of the amount indicated for payment of debt obligations.

“(ii) Available income.—If an amount up to 105 percent of the debt payments of the borrower has been earmarked for such payments, the Secretary shall consider the income of the borrower to be adequate to meet the debt obligations of the borrower.”

Subsec. (c)(6). Puspan. L. 104–127, § 645(1)(B), added par. (6) and struck out former par. (6), which specified required conditions for termination of loan obligations, limited applicability of good faith requirement, authorized recapture by requiring borrower to enter into agreement before terminating loan obligations, and provided for limitation on recapture amount and treatment of intrafamily transfers.

Subsec. (k). Puspan. L. 104–127, § 645(2), (3), redesignated subsec. (l) as (k) and struck out span and text of former subsec. (k). Text read as follows: “The creditworthiness of, or the adequacy of collateral offered by, any borrower whose loan obligations are restructured under this section shall be determined without regard to such restructuring.”

Subsec. (l). Puspan. L. 104–127, § 661(j), struck out “and subparagraphs (A)(i) and (C)(i) of section 1985(e)(1) of this title,” before “if a borrower” in introductory provisions.

Puspan. L. 104–127, § 645(3), redesignated subsec. (m) as (l).

Subsecs. (m) to (p). Puspan. L. 104–127, § 645(3), redesignated subsecs. (m) to (p) as (l) to (o), respectively.

1991—Subsec. (c)(6)(A)(ii). Puspan. L. 102–237, § 501(h)(1), substituted “November 28, 1990” for “the date of enactment of this paragraph”.

Subsec. (m). Puspan. L. 102–237, § 501(h)(2), substituted “section 1985(e)(1)” for “section 1985(e)(1)(A)”.

1990—Subsec. (span)(1). Puspan. L. 101–624, § 1816(a), inserted before semicolon at end “, except that the regulations shall require that, if the value of the assets calculated under subsection (c)(2)(A)(ii) that may be realized through liquidation or other methods would produce enough income to make the delinquent loan current, the borrower shall not be eligible for assistance under subsection (a)”.

Subsec. (c)(2)(A). Puspan. L. 101–624, § 1816(span)(1), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “the amount of the current appraised value of the property securing the loan; less”.

Subsec. (c)(2)(B)(iv). Puspan. L. 101–624, § 1816(span)(2)(A), substituted “costs; plus” for “costs.”

Subsec. (c)(2)(C). Puspan. L. 101–624, § 1816(span)(2)(B), added subpar. (C).

Subsec. (c)(3)(C). Puspan. L. 101–624, § 1816(c), added subpar. (C).

Subsec. (c)(4). Puspan. L. 101–624, § 1816(d), substituted “90” for “60” in introductory provisions.

Subsec. (c)(6). Puspan. L. 101–624, § 1816(f), amended par. (6) generally. Prior to amendment, par. (6) read as follows: “If the value of the restructured loan is less than the recovery value and if, within 45 days after receipt of the notification described in paragraph (4)(B), the borrower pays (or obtains third-party financing to pay) the Secretary an amount equal to the recovery value, the obligations of the borrower to the Secretary under the loan shall terminate, except that the Secretary may require, as a condition of such termination of loan obligations, that the borrower enter into an agreement with the Secretary if the borrower sells or otherwise conveys the real property used to secure such loan within 2 years after the date of such agreement. Any such agreement shall provide for the recapture of part or all of the difference between the recovery value of the loan and the fair market value (on the date of such agreement) of the property securing the loan if the borrower realizes a gain on the sale or conveyance over the amount of the recovery value of the loan. In no event shall any such agreement provide for recapture of an amount that exceeds the difference between such recovery value and the fair market value of the property securing the loan on the date of such agreement.”

Subsec. (c)(7). Puspan. L. 101–624, § 1816(g), added par. (7).

Subsecs. (l) to (p). Puspan. L. 101–624, § 1816(h), added subsecs. (l) to (p).

Statutory Notes and Related Subsidiaries

Effective Date of 1996 Amendment

Amendment by section 645(1) of Puspan. L. 104–127 effective 90 days after Apr. 4, 1996, and amendment by sections 645(2), (3) and 661(j) of Puspan. L. 104–127 effective Apr. 4, 1996, see section 663(a), (span) of Puspan. L. 104–127, set out as a note under section 1922 of this title.

Effective Date of 1991 Amendment

Amendment by Puspan. L. 102–237 effective as if included in the provision of the Food, Agriculture, Conservation, and Trade Act of 1990, Puspan. L. 101–624, to which the amendment relates, see section 1101(span)(3) of Puspan. L. 102–237, set out as a note under section 1421 of this title.

Effective Date of 1990 Amendment

Puspan. L. 101–624, title XVIII, § 1861, Nov. 28, 1990, 104 Stat. 3837, provided that:

“(a)In General.—Except as otherwise provided in this title, this title and the amendments made by this title [enacting sections 1981f and 2006a to 2006e of this title, section 2076a of Title 12, Banks and Banking, and section 5143 of Title 25, Indians, amending this section, sections 1924, 1927, 1933, 1934, 1942, 1946, 1981, 1981d, 1982, 1983, 1983a, 1983span, 1985, 1991, 1997, 2003, and 5106 of this title, section 3132 of Title 5, Government Organization and Employees, sections 2019, 2075, 2077, 2218, 2252, 2254, 2277a–5, 2277a–9, 2277a–10, 2277a–14, 2278a–6, 2279aa, and 2279aa–11 of Title 12, and section 5141 of Title 25, enacting provisions set out as notes under section 1981f of this title and section 2001 of Title 12, amending provisions set out as a note under section 1985 of this title, and repealing provisions set out as a note preceding section 1961 of this title] shall become effective on the date of enactment of this Act [Nov. 28, 1990].

“(span)Notice of Debt Settlement Programs.—The amendment made by section 1807(1) of this Act [amending section 1981d(span)(1) of this title] shall become effective 120 days after the date of enactment of this Act [Nov. 28, 1990].

“(c)Debt Restructuring and Loan Servicing.—

“(1)In general.—Except as provided in section 353(c)(6)(A)(ii) of the Consolidated Farm and Rural Development Act [7 U.S.C. 2001(c)(6)(A)(iii)] (as added by section 1816(f) of this Act) and in paragraph (3) of this subsection, section 1816 of this Act and the amendments made by such section 1816 [amending this section and section 1985 of this title] shall apply to new applications submitted under section 353 of the Consolidated Farm and Rural Development Act (7 U.S.C. 2001) on or after the date of enactment of this Act [Nov. 28, 1990].

“(2)Definition of new application.—As used in paragraph (1), the term ‘new application’ means an application submitted by a borrower to initiate a debt restructuring consideration and not an application reconsidered after an appeal or revision of the original application.

“(3)Liquidation of assets.—Section 353(o) of the Consolidated Farm and Rural Development Act [7 U.S.C. 2001(o)] (as added by section 1816(h) of this Act) shall not apply until the Secretary of Agriculture has issued final regulations to carry out such section 353(o).

“(d)Restoration of First Lien on Stock.—The amendment made by section 1833 of this Act [enacting section 2076a of Title 12 and amending section 2077 of Title 12] shall be effective as of January 7, 1988.

“(e)Regulations.—As soon as practicable after the date of enactment of this Act [Nov. 28, 1990]—

“(1) the Secretary of Agriculture shall issue such regulations as are necessary to carry out subtitles A and C of this Act [probably means subtitles A (§§ 1801–1824) and C (§§ 1851–1854) of title XVIII of Puspan. L. 101–624, enacting sections 1981f and 2006a to 2006e of this title and section 5143 of Title 25, amending this section, sections 1924, 1927, 1933, 1934, 1942, 1946, 1981, 1981d, 1982, 1983, 1983a, 1983span, 1985, 1991, 1997, 2003, and 5106 of this title and section 5141 of Title 25, enacting provisions set out as a note under section 1981f of this title, amending provisions set out as a note under section 1985 of this title, and repealing provisions set out as a note preceding section 1961 of this title] and the amendments made by such subtitles; and

“(2) the Farm Credit Administration shall issue such regulations as are necessary to carry out subtitle B of this Act [probably means subtitle B (§§ 1831–1843) of title XVIII of Puspan. L. 101–624, enacting section 2076a of Title 12, amending section 3132 of Title 5 and sections 2019, 2075, 2077, 2218, 2252, 2254, 2277a–5, 2277a–9, 2277a–10, 2277a–14, 2278a–6, 2279aa, and 2279aa–11 of Title 12, and enacting provisions set out as a note under section 2001 of Title 12] and the amendments made by such subtitle.”

Suspension of Collection Activities During Transition Period

Puspan. L. 100–233, title VI, § 615(d), Jan. 6, 1988, 101 Stat. 1682, provided that: “The Secretary of Agriculture shall not initiate any acceleration, foreclosure, or liquidation in connection with any delinquent farmer program loan before the date the Secretary has issued final regulations to carry out the amendments made by this section [enacting section 2001 of this title and amending sections 1927a and 1981 of this title]. The preceding sentence shall not prohibit the Secretary from taking any action with respect to waste, fraud, or abuse by the borrower.”