[Code of Federal Regulations]
[Title 5, Volume 3]
[Revised as of January 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 5CFR1655.12]

[Page 291-292]
 
                    TITLE 5--ADMINISTRATIVE PERSONNEL
 
         CHAPTER VI--FEDERAL RETIREMENT THRIFT INVESTMENT BOARD
 
PART 1655--LOAN PROGRAM--Table of Contents
 
Sec. 1655.12  Loan approval.

    (a) The application will be reviewed by the recordkeeper and will be 
accepted only if it conforms with the requirements of this part. Upon 
receipt of the application, the recordkeeper will determine whether:
    (1) The participant is qualified to apply for a loan under 
Sec. 1655.2 and has provided all required information;
    (2) The participant already has the maximum number of loans 
outstanding, or if the application is for a residential loan, the 
participant already has a residential loan outstanding;
    (3) The participant already has a pending loan application;
    (4) The requested loan exceeds the maximum amounts set forth in 
Sec. 1655.6(b), or is less than the minimum amount set forth in 
Sec. 1655.6(a). If the loan application process date occurs during a 
month before the monthly processing cycle, the maximum and minimum 
amounts will be determined using the interim account balance at the end 
of the prior month. If the loan application process date occurs after 
the monthly processing cycle but before the end of the month, the 
maximum and minimum amounts will be determined using the most recent 
valued account balance;
    (5) The applicant is covered by a retirement system that is eligible 
to participate in the Thrift Savings Plan;
    (6) A CSRS participant who is married but does not know the 
whereabouts of his or her spouse has been granted an exception to the 
spousal requirement as described in Sec. 1655.18; and
    (7) The participant has received a taxable loan distribution (as 
described in Sec. 1655.13) from the Thrift Savings Plan within the 12 
consecutive month period preceding the date of application, except as a 
result of a failure to repay the loan upon the participant's separation 
from service or confirmed non-pay status for a period exceeding one 
year.
    (b) Failure by the applicant to comply with any of the requirements 
of this part will result in rejection of the loan application.
    (c) If the recordkeeper accepts the loan application, a Loan 
Agreement/Promissory Note will be sent to the applicant, as provided in 
Sec. 1655.11. When the completed Loan Agreement/Promissory Note is 
returned by the applicant, along with documentation, if required to be 
submitted under Secs. 1655.11(d) and 1655.20, the loan will be initially 
approved or denied by the recordkeeper based upon the requirements of 
this part, including the following conditions:
    (1) The participant has signed a promise to pay the loan and a 
statement that the information provided to the recordkeeper is true and 
complete to the best of the participant's knowledge;
    (2) Processing of the loan would not be prohibited by Sec. 1655.19 
relating to court orders;
    (3) A FERS participant's spouse has consented to the loan or, if the 
spouse's whereabouts are unknown or exceptional circumstances make it 
inappropriate to secure the spouse's consent, an exception to the 
spousal requirement described in Sec. 1655.18 has been granted;
    (4) The completed Loan Agreement/Promissory Note was received by the 
recordkeeper within 45 days of the date it was prepared;
    (5) The participant has completed and signed a loan payment 
allotment form; and
    (6) Any other conditions that the Executive Director may from time 
to time prescribe.
    (d) The loan issue date will occur within 60 days of the date the 
loan is initially approved unless the recordkeeper determines that:
    (1) A court order would prohibit the loan for the reasons described 
in Sec. 1655.19;
    (2) The participant's employing agency has reported the death, 
retirement, or separation of the participant;
    (3) The participant's account balance on the loan issue date does 
not contain sufficient employee contributions and related earnings to 
make the loan;
    (4) The loan exceeds the maximum loan amount set forth in 
Sec. 1655.6(b) as of the most recent valuation date; or
    (5) The loan does not comply with any other criteria that the 
Executive Director may from time to time prescribe.

[[Page 292]]

    (e) Loans will be issued once a month. After the loan issue date, 
the recordkeeper will provide information to the United States Treasury 
which will permit the Treasury to mail a check for the principal amount 
of the approved loan to the participant.
    (f) A loan is considered to have been made to a participant on the 
loan issue date.

[61 FR 58755, Nov. 18, 1996]