[Code of Federal Regulations]
[Title 7, Volume 11]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR1779.27]

[Page 1013-1014]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER XVII--RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 1779--WATER AND WASTE DISPOSAL PROGRAMS GUARANTEED LOANS--Table of Contents
 
Sec. 1779.27  Lenders.

    (a) Eligible lenders. Eligible lenders may participate in the loan 
guarantee program. These lenders must be subject to credit examination 
and supervision by an appropriate agency of the United States or a State 
that supervises and regulates credit institutions. A lender must have 
the capability to adequately service loans for which a guarantee is 
requested. Eligible lenders are:
    (1) Any Federal or State chartered bank or savings and loan 
association;
    (2) Any mortgage company that is a part of a bank holding company;
    (3) Co-Bank, National Rural Utilities Cooperative Finance 
Corporation, Farm Credit Bank of the Federal Land Bank, or other Farm 
Credit System institution with direct lending authority authorized to 
make loans of the type guaranteed by this part;
    (4) An insurance company regulated by a State or National insurance 
regulatory agency;
    (5) State Bond Banks or State Bond Pools; and
    (6) Other lenders that possess the legal powers necessary and 
incidental to making and servicing guaranteed loans involving community 
development-type projects. Lenders under this category must be approved 
by the National Office prior to the issuance of the loan guarantee.
    (b) Conflict of interest. When the lender's officers, stockholders, 
directors, or partners (including their immediate

[[Page 1014]]

families) or the borrower, its officers, stockholders, directors, or 
partners (including their immediate families) own, or have management 
responsibilities in each other, the lender must disclose such business 
or ownership relationships. The Agency will determine if such 
relationships are likely to result in a conflict of interest. This does 
not preclude lender officials from being on the borrower's board of 
directors.