81_FR_54635 81 FR 54477 - Guaranteed Loanmaking and Servicing Regulations; Correction

81 FR 54477 - Guaranteed Loanmaking and Servicing Regulations; Correction

DEPARTMENT OF AGRICULTURE
Rural Business-Cooperative Service
Rural Utilities Service

Federal Register Volume 81, Issue 158 (August 16, 2016)

Page Range54477-54477
FR Document2016-19430

This document contains corrections to the final rule published in the Federal Register of June 3, 2016, entitled ``Guaranteed Loanmaking and Servicing Regulations.''

Federal Register, Volume 81 Issue 158 (Tuesday, August 16, 2016) 
[Federal Register Volume 81, Number 158 (Tuesday, August 16, 2016)]
[Rules and Regulations]
[Page 54477]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-19430]



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Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 
Prices of new books are listed in the first FEDERAL REGISTER issue of each 
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Federal Register / Vol. 81, No. 158 / Tuesday, August 16, 2016 / 
Rules and Regulations

[[Page 54477]]



DEPARTMENT OF AGRICULTURE

Rural Business-Cooperative Service

Rural Utilities Service

7 CFR Parts 4279 and 4287

RIN 0570-AA85


Guaranteed Loanmaking and Servicing Regulations; Correction

AGENCY: Rural Business-Cooperative Service and Rural Utilities Service; 
USDA.

ACTION: Correcting amendments.

-----------------------------------------------------------------------

SUMMARY: This document contains corrections to the final rule published 
in the Federal Register of June 3, 2016, entitled ``Guaranteed 
Loanmaking and Servicing Regulations.''

DATES: Effective August 16, 2016.

FOR FURTHER INFORMATION CONTACT: Brenda Griffin, Rural Development, 
Business Programs, U.S. Department of Agriculture, 1400 Independence 
Ave. SW., Stop 3224, Washington, DC, 20250-3224; email: 
[email protected]; telephone number: (202) 720-6802.

SUPPLEMENTARY INFORMATION

Need for Correction

    On June 3, 2016, the Agency published a final rule for the Business 
and Industry (B&I) Guaranteed Loan Program (81 FR 35984). Since then, 
the Agency has discovered three necessary technical corrections.
    First. The Agency is clarifying that the list of eligible regulated 
lenders, which are identified in Sec.  4279.29(a), can include ``other 
financial institutions'' that are, like the other entities already 
listed in said paragraph, ``subject to credit examination and 
supervision by an agency of the United States or a State.'' This 
clarification implements the intent of the Agency to offer eligibility 
to all regulated lenders. As currently written, an unintended 
consequence is that some of the program's historically highest 
performing lenders may be excluded from eligibility.
    Second. The Agency is correcting an inconsistency between a 
provision in Sec.  4279.131(b)(1)(ii), associated with how the value of 
collateral is calculated for newly acquired equipment and a provision 
in Sec.  4279.144, identifying when an appraisal of collateral is 
required. Briefly, the first provision allows the value of the 
collateral to be based on the purchase price of the newly acquired 
equipment without the need for an appraisal regardless of the purchase 
price, while the second provision as currently written, requires an 
appraisal for such newly acquired equipment when the purchase price 
exceeds $250,000. This poses a contradiction for newly acquired 
equipment whose collateral value, based on purchase price, is greater 
than $250,000--is an appraisal required or not? The intent of the 
Agency is found in the first provision and the correction being made is 
to modify the second provision to indicate that an appraisal is not 
required for newly acquired equipment whose collateral value is based 
on the purchase price. This correction provides clarity to the 
regulation as well as saves borrowers the added processing time and 
expense of obtaining an appraisal when purchasing new equipment in 
excess of $250,000.
    Third. One of the changes that the final rule put into effect was 
to limit interest accrual associated with guaranteed loans ``closed on 
or after'' the effective date of the rule (i.e., August 2, 2016). This 
provision was supposed to have been addressed consistently throughout 
the provisions. The Agency identified two places in bankruptcy 
provisions (Sec.  4287.170(b)(3)(i) and (ii)) where this change was 
unintentionally not made. This notice corrects those oversights.

List of Subjects for 7 CFR Parts 4279 and 4287

    Loan programs--Business and industry, Direct loan programs, 
Economic development, Energy, Energy efficiency improvements, Grant 
programs, Guaranteed loan programs, Renewable energy systems, Rural 
areas, and Rural development assistance.

    Accordingly, 7 CFR chapter XLII is amended by making the following 
correcting amendments:

PART 4279--GUARANTEED LOAN MAKING

0
1. The authority citation for part 4279 continues to read as follows:

    Authority: 5 U.S.C. 301; and 7 U.S.C. 1989.

Subpart A--General


Sec.  4279.29  [Amended]

0
2. Amend the first sentence of Sec.  4279.29(a) by adding ``or other 
financial institution'' after ``State chartered bank''.

Subpart B--Business and Industry Loans

0
3. Revise the first sentence of Sec.  4279.144 introductory text to to 
read as follows:


Sec.  4279.144  Appraisals

* * * * *
    Lenders must obtain appraisals for real estate and chattel 
collateral when the value of the collateral exceeds $250,000, unless 
the chattel is newly-acquired equipment and the value is supported by a 
bill of sale. * * *
* * * * *

PART--SERVICING

0
4. The authority citation for part 4287 continues to read as follows:

    Authority: 5 U.S.C. 301; 7 U.S.C. 1932(a); 7 U.S.C. 1989.

Subpart B--Servicing Business and Industry Guaranteed Loans


Sec.  4287.170  [Amended]

0
5. Amend Sec.  4287.170(b)(3)(i) introductory text and (b)(3)(ii) by 
removing ``approved'' and adding ``closed'' in its place.

    Dated: August 9, 2016.
Samuel H. Rikkers,
Administrator, Rural Business-Cooperative Service.
    Dated: August 10, 2016.
Brandon McBride,
Administrator, Rural Utilities Service.
[FR Doc. 2016-19430 Filed 8-15-16; 8:45 am]
BILLING CODE 3410-XY-P

54477 Rules and Regulations Federal Register Vol. 81, No. 158 Tuesday, August 16, 2016 This section of the FEDERAL REGISTER eligibility to all regulated lenders. As Renewable energy systems, Rural areas, contains regulatory documents having general currently written, an unintended and Rural development assistance. applicability and legal effect, most of which consequence is that some of the Accordingly, 7 CFR chapter XLII is are keyed to and codified in the Code of program’s historically highest Federal Regulations, which is published under amended by making the following performing lenders may be excluded correcting amendments: 50 titles pursuant to 44 U.S.C. 1510. from eligibility. The Code of Federal Regulations is sold by Second. The Agency is correcting an PART 4279—GUARANTEED LOAN the Superintendent of Documents. Prices of inconsistency between a provision in MAKING new books are listed in the first FEDERAL § 4279.131(b)(1)(ii), associated with how REGISTER issue of each week. ■ 1. The authority citation for part 4279 the value of collateral is calculated for continues to read as follows: newly acquired equipment and a provision in § 4279.144, identifying Authority: 5 U.S.C. 301; and 7 U.S.C. 1989. DEPARTMENT OF AGRICULTURE when an appraisal of collateral is required. Briefly, the first provision Subpart A—General Rural Business-Cooperative Service allows the value of the collateral to be § 4279.29 [Amended] Rural Utilities Service based on the purchase price of the newly acquired equipment without the ■ 2. Amend the first sentence of need for an appraisal regardless of the § 4279.29(a) by adding ‘‘or other 7 CFR Parts 4279 and 4287 financial institution’’ after ‘‘State purchase price, while the second RIN 0570–AA85 provision as currently written, requires chartered bank’’. an appraisal for such newly acquired Subpart B—Business and Industry Guaranteed Loanmaking and Servicing equipment when the purchase price Regulations; Correction Loans exceeds $250,000. This poses a AGENCY: Rural Business-Cooperative contradiction for newly acquired ■ 3. Revise the first sentence of Service and Rural Utilities Service; equipment whose collateral value, based § 4279.144 introductory text to to read USDA. on purchase price, is greater than as follows: ACTION: Correcting amendments. $250,000—is an appraisal required or not? The intent of the Agency is found § 4279.144 Appraisals SUMMARY: This document contains in the first provision and the correction * * * * * corrections to the final rule published in being made is to modify the second Lenders must obtain appraisals for the Federal Register of June 3, 2016, provision to indicate that an appraisal is real estate and chattel collateral when entitled ‘‘Guaranteed Loanmaking and not required for newly acquired the value of the collateral exceeds Servicing Regulations.’’ equipment whose collateral value is $250,000, unless the chattel is newly- based on the purchase price. This acquired equipment and the value is DATES: Effective August 16, 2016. correction provides clarity to the supported by a bill of sale. * * * FOR FURTHER INFORMATION CONTACT: regulation as well as saves borrowers * * * * * Brenda Griffin, Rural Development, the added processing time and expense Business Programs, U.S. Department of PART—SERVICING of obtaining an appraisal when Agriculture, 1400 Independence Ave. purchasing new equipment in excess of SW., Stop 3224, Washington, DC, ■ 4. The authority citation for part 4287 $250,000. 20250–3224; email: Brenda.griffin@ continues to read as follows: wdc.usda.gov; telephone number: (202) Third. One of the changes that the final rule put into effect was to limit Authority: 5 U.S.C. 301; 7 U.S.C. 1932(a); 720–6802. 7 U.S.C. 1989. SUPPLEMENTARY INFORMATION interest accrual associated with guaranteed loans ‘‘closed on or after’’ Subpart B—Servicing Business and Need for Correction the effective date of the rule (i.e., August Industry Guaranteed Loans On June 3, 2016, the Agency 2, 2016). This provision was supposed published a final rule for the Business to have been addressed consistently § 4287.170 [Amended] and Industry (B&I) Guaranteed Loan throughout the provisions. The Agency ■ 5. Amend § 4287.170(b)(3)(i) Program (81 FR 35984). Since then, the identified two places in bankruptcy introductory text and (b)(3)(ii) by Agency has discovered three necessary provisions (§ 4287.170(b)(3)(i) and (ii)) removing ‘‘approved’’ and adding technical corrections. where this change was unintentionally ‘‘closed’’ in its place. First. The Agency is clarifying that the not made. This notice corrects those oversights. Dated: August 9, 2016. list of eligible regulated lenders, which Samuel H. Rikkers, asabaliauskas on DSK3SPTVN1PROD with RULES are identified in § 4279.29(a), can List of Subjects for 7 CFR Parts 4279 include ‘‘other financial institutions’’ Administrator, Rural Business-Cooperative and 4287 Service. that are, like the other entities already listed in said paragraph, ‘‘subject to Loan programs—Business and Dated: August 10, 2016. credit examination and supervision by industry, Direct loan programs, Brandon McBride, an agency of the United States or a Economic development, Energy, Energy Administrator, Rural Utilities Service. State.’’ This clarification implements efficiency improvements, Grant [FR Doc. 2016–19430 Filed 8–15–16; 8:45 am] the intent of the Agency to offer programs, Guaranteed loan programs, BILLING CODE 3410–XY–P VerDate Sep<11>2014 18:12 Aug 15, 2016 Jkt 238001 PO 00000 Frm 00001 Fmt 4700 Sfmt 4700 E:\FR\FM\16AUR1.SGM 16AUR1


Document Created: 2016-08-16 03:20:25
Document Modified: 2016-08-16 03:20:25
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionCorrecting amendments.
DatesEffective August 16, 2016.
ContactBrenda Griffin, Rural Development, Business Programs, U.S. Department of Agriculture, 1400 Independence Ave. SW., Stop 3224, Washington, DC, 20250-3224; email: [email protected]; telephone number: (202) 720-6802.
FR Citation81 FR 54477 
RIN Number0570-AA85
CFR Citation7 CFR 4279
7 CFR 4287
CFR AssociatedLoan Programs-Business and Industry; Direct Loan Programs; Economic Development; Energy; Energy Efficiency Improvements; Grant Programs; Guaranteed Loan Programs; Renewable Energy Systems; Rural Areas and Rural Development Assistance
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