[Federal Register: December 8, 2004 (Volume 69, Number 235)]
[Rules and Regulations]
[Page 70883-70885]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08de04-5]
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Rural Housing Service
Rural Business--Cooperative Service
Rural Utilities Service
Farm Service Agency
7 CFR Part 1951
RIN 0575-AC57
Servicing of Delinquent Community and Business Programs Loans--
Workout Agreements
AGENCY: Rural Housing Service, USDA.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Rural Housing Service (RHS) hereby amends the regulation
utilized to service the Community Facilities and Business Programs loan
program by adding requirements for servicing delinquent Community
Facilities in conformance with the Debt Collection Improvement Act of
1996. The intended effect of this action is to establish a workout
agreement with delinquent borrowers to collect delinquent loans prior
to referral for treasury offset.
DATES: This rule is effective January 7, 2005.
FOR FURTHER INFORMATION CONTACT: Dan Spieldenner, Community Programs
Senior Loan Specialist, Rural Housing Service, U.S. Department of
Agriculture, STOP 0787, 1400 Independence Ave. SW., Washington, DC
20250-0787, telephone: (202) 720-9700.
SUPPLEMENTARY INFORMATION:
Classification
This rule has been determined to be not significant for the
purposes of Executive Order 12866 and, therefore, has not been reviewed
by the Office of Management and Budget (OMB).
Programs Affected
The Catalog of Federal Domestic Assistance Program impacted by this
action is 10.766, Community Facilities Loans and Grants.
Intergovernmental Review
This program is subject to the provisions of Executive Order 12372,
which requires intergovernmental consultation with State and local
officials. RHS conducts intergovernmental consultations for each loan
in the manner delineated in 7 CFR part 3015, subpart V.
[[Page 70884]]
Civil Justice Reform
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. In accordance with this rule: (1) All State and local
laws and regulations that are in conflict with this rule will be
preempted; (2) no retroactive effect will be given to this rule; and
(3) administrative proceedings of the National Appeals Division (7 CFR
part 11) must be exhausted before bringing suit in court challenging
action taken under this rule.
Environmental Impact Statement
The action has been reviewed in accordance with 7 CFR part 1940,
subpart G, ``Environmental Program.'' The Agency has determined that
this action does not constitute a major Federal action significantly
affecting the quality of the 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.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2
U.S.C. chapters 17A and 25, established 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, RHS 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 1 year. When such a statement is needed for a
rule, section 205 of the UMRA generally requires RHS to identify and
consider a reasonable number of regulatory alternatives and adopt the
least costly, most cost-effective, or least burdensome alternative that
achieves the objectives of the rule. This rule contains no Federal
mandates (under the regulatory provisions of title II of the UMRA) for
State, local, and tribal governments or the private sector. Therefore,
this rule is not subject to the requirements of sections 202 and 205 of
the UMRA.
Regulatory Flexibility Act
This rule has been reviewed with regard to the requirements of the
Regulatory Flexibility Act (5 U.S.C. 601-612). The undersigned has
determined and certified by signature of this document that this rule
will not have a significant economic impact on a substantial number of
small entities since this rulemaking action does not involve a new or
expanded program.
Federalism
The policies contained in this rule do not have any substantial
direct effect on States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government. Nor does this
rule impose substantial direct compliance costs on State and local
governments. Therefore, consultation with the States is not required.
Implementation
It is the policy of this Department that rules relating to public
property, loans, grants, benefits, or contracts shall comply with 5
U.S.C. 553, notwithstanding the exemption of that section with respect
to such rules.
Paperwork Reduction Act
The information collection and record keeping requirements
contained in this regulation 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 0575-0066 in accordance with
the Paperwork Reduction Act of 1995. Under 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. The
revisions in this rulemaking for part 1951 required an amendment to the
burden package and this modification has been approved by OMB.
Discussion
The proposed rule was published in the Federal Register on April
30, 2004 (69 FR 23697), for public comment. We received no comments on
the proposed rule. The Debt Collection Improvement Act of 1996 requires
transfer of accounts that are more than 180 days delinquent to the
Department of Treasury for collection by offset of Federal payments
unless a suitable agreement for collection of the delinquent amount is
negotiated between the borrower and the federal agency. This change to
regulation establishes requirements for negotiation of a ``Workout
Agreement'' and the reporting requirements that are necessary to
monitor the borrower's progress in resolving the delinquency. It also
incorporates some administrative corrections. There are no substantive
changes from the notice of proposed rulemaking.
List of Subjects in 7 CFR Part 1951
Accounting servicing, Grant programs--Housing and community
development, Reporting requirements, Rural areas.
0
Therefore, Chapter XVIII, Title 7, Code of Federal Regulations, is
amended as follows:
PART 1951--SERVICING AND COLLECTIONS
0
1. The authority citation for part 1951 continues to read as follows:
Authority: 5 U.S.C. 301; 7 U.S.C. 1932; 7 U.S.C. 1989; 31 U.S.C.
3716; 42 U.S.C. 1480.
Subpart E--Servicing of Community and Direct Business Programs
Loans and Grants
0
2. Section 1951.203 is amended by revising paragraph (a) to read as
follows:
Sec. 1951.203 Definitions.
(a) Approval official. An official who has been delegated loan and/
or grant approval authorities within applicable programs.
* * * * *
0
3. Section 1951.222 is amended by revising paragraph (a)(1) to read as
follows:
Sec. 1951.222 Subordination of security.
* * * * *
(a) * * *
(1) The request must be for subordination of a specific amount of
the Rural Development indebtedness.
* * * * *
Sec. 1951.226 [Amended]
4. Section 1951.226 is amended in paragraph (b)(4)(ii) by revising
the word ``below'' to read ``of this subpart.''
Sec. 1951.230 [Amended]
0
5. Section 1951.230 is amended in paragraph (f)(2) by revising the
words ``Form FmHA or its successor agency under Public Law 103-354 442-
46'' to read ``an Agency approved form''.
0
6. Section 1951.242 is added to read as follows:
Sec. 1951.242 Servicing delinquent Community Facility loans.
(a) For the purpose of this section, a loan is delinquent when a
borrower fails to make all or part of a payment by the due date.
(b) The delinquent loan borrower and the Agency, at its discretion,
may enter into a written workout agreement.
(c) For loans that are delinquent, the borrower must provide,
monthly comparative financial statements in a format that is acceptable
to the Agency
[[Page 70885]]
by the 15th day of the following month. The Agency may waive this
requirement if it would cause a hardship for the borrower or the
borrower is actively marketing the security property.
Sec. 1951.250 [Amended]
0
7. Section 1951.250 is amended by removing the last sentence.
Dated: December 1, 2004.
Russell T. Davis,
Administrator, Rural Housing Service.
[FR Doc. 04-26872 Filed 12-7-04; 8:45 am]