[Federal Register Volume 85, Number 68 (Wednesday, April 8, 2020)]
[Rules and Regulations]
[Pages 19655-19656]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-07487]
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DEPARTMENT OF AGRICULTURE
Rural Utilities Service
7 CFR Part 1779
Rural Housing Service
7 CFR Part 3575
Rural Business-Cooperative Service
7 CFR Part 4287
Rural Development Guarantee Loan Servicing Flexibilities To
Address Coronavirus 2019 Impacts
AGENCY: Rural Business-Cooperative Service, Rural Housing Service, and
Rural Utilities Service, USDA.
ACTION: Notification.
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SUMMARY: The Rural-Business Cooperative Service (RBCS), Rural Housing
Service (RHS), and Rural Utilities Service (RUS) agencies of the Rural
Development mission area, hereinafter referred to as Agency, issued a
notification in the Federal Register on March 31, 2020, that allows
lenders with guaranteed loans with the Agency to unilaterally offer
payment deferrals for the period specified in the notice to their
customers who may be experiencing temporary cash flow issues due to the
Coronavirus (COVID-19) pandemic. This notification supplements the
prior notification and includes additional servicing flexibilities
regarding Agency guaranteed loan requirements as they relate to the new
loans that are covered by Section 1102 of the Coronavirus Aid, Relief,
and Economic Security (CARES) Act.
DATES: The policies included in this notification are effective as of
March 31, 2020, and the temporary authorization expires on September
30, 2020.
FOR FURTHER INFORMATION CONTACT:
Guarantee Lenders may contact the following Rural
Development points of contact: RBCS, Aaron Morris, Director, Program
Processing Division, 202-720-1501, [email protected]; for RHS,
Deborah Jackson, Director, Guaranteed Loan Processing and Servicing
Division, 202-720-8454, [email protected]; for RUS, Darrel
Lipscomb, Water and Environmental Programs, 202-617-0857,
[email protected].
Borrowers with a loan guaranteed by Rural Development must
contact their servicing Guarantee Lender for further information.
SUPPLEMENTARY INFORMATION: Through this notification Rural Development
expands servicing flexibilities on four guaranteed loan programs to
enable lenders to better assist rural business, water, and community
facility borrowers in responding to the economic impacts of the COVID-
19 pandemic.
Lender Deferrals on Loan With USDA Guarantees
On March 31, 2020, the Agency announced in the Federal Register at
85 FR 17721 that beginning March 31, 2020, and through September 30,
2020, the USDA Business and Industry (B&I) Guaranteed Loan Program,
Rural Energy for America Program (REAP), Community Facilities
Guaranteed Loan Program, and Water and Waste Guaranteed Program lenders
may assist borrowers experiencing temporary cash flow issues resulting
from the COVID-19 pandemic, by deferring payments for a period no
longer than 180 days from the date the original payment is due. In
accordance with 7 CFR 4287.107 (RBCS),7 CFR 3575.69 (RHS), and 7 CFR
1779.69 (RUS), the lender is responsible for servicing the entire loan
and for taking all servicing actions that a reasonably prudent lender
would perform in servicing its own portfolio of loans that are not
guaranteed.
The lender must notify the Agency in writing of any payment
deferments. Written notification to the Agency will meet the standard
for concurrence until September 30, 2020. After September 30, 2020,
lenders must resume obtaining Agency approval in accordance with all
applicable program regulations, forms, and existing authorities. This
guidance applies to all borrowers that had a current repayment status
as of January 31, 2020.
If the loan has been sold on the secondary market, the secondary
market
[[Page 19656]]
holder and lender must agree to the deferment actions being taken. The
Agency will expect a written deferral agreement signed by both parties
in these instances prior to executing any payment deferral action. A
copy of the deferral agreement must be provided to the Agency.
The Agency does not consider a loan that is under a deferral or
forbearance agreement to be a delinquent loan. Unpaid interest accruing
during a deferral or forbearance agreement is not subject to the
limitation of the guarantee of accrued interest under 7 CFR 4287.145(d)
(RBCS),7 CFR 3575.3 (RHS), nor 7 CFR 1779.3 (RUS).
Lender Notification of Loans Under the CARES Act (Pub. L. 116-136)
This notification expands upon the deferral flexibilities announced
in the March 31, 2020, Federal Register notification by providing that
lenders may also approve and make covered loans under the provisions of
Section 1102 of the CARES Act.
The lender must notify the Agency in writing of any covered loans
made under Section 1102 of the CARES Act. Written notification to the
Agency will meet the standard for concurrence until September 30, 2020.
After September 30, 2020, lenders must resume obtaining Agency approval
in accordance with all applicable program regulations, forms, and
existing authorities.
Bette B. Brand,
Deputy Under Secretary, Rural Development.
[FR Doc. 2020-07487 Filed 4-6-20; 4:15 pm]
BILLING CODE 3410-XY-P