[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: 7CFR1785.70]

[Page 1088]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER XVII--RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 1785--LOAN ACCOUNT COMPUTATIONS, PROCEDURES AND POLICIES FOR ELECTRIC AND TELEPHONE BORROWERS--Table of Contents
 
  Subpart B--RUS Cushion of Credit Account Computations and Procedures
 
Sec. 1785.70  Application of RETRF cushion of credit payments.

    (a) If a maturing installment on an RUS note or a note which has 
been guaranteed by RUS is not received by its due date, funds will be 
withdrawn from the borrower's cushion of credit account and applied as 
of the installment due date beginning with the oldest of such notes as 
follows: first, to current interest then due on all notes; second, to 
the accumulated interest due, if any, on all notes; and third, to the 
principal then due on all notes. In those instances where a borrower has 
prior to October 2, 1987, maintained an advance payment account with 
RUS, its cushion of credit account will be applied in accordance with 
the provisions of this section prior to using any balance remaining in 
its advance payment account to pay interest and principal installments 
on notes. Computations required under this section have been made by RUS 
as of October 2, 1987; however, on or before May 25, 1989 any borrower 
may make a one time irrevocable election to have all such computations 
made as of April 5, 1989, by filing written notice to that effect with 
Robert D. Ruddy, Director, Fiscal Accounting Division, Rural Utilities 
Service, Washington, DC 20250-1500.
    (b) A borrower may reduce the balance of its cushion of credit 
account only if the amount obtained from the reduction is used to make 
scheduled payments on loans made or guaranteed under the Act.

[54 FR 13669, Apr. 5, 1989; 54 FR 17703, Apr. 25, 1989]