[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: 7CFR1786.35]

[Page 1098-1099]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER XVII--RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 1786--PREPAYMENT OF RUS GUARANTEED AND INSURED LOANS TO ELECTRIC AND TELEPHONE BORROWERS--Table of Contents
 
  Subpart B--Prepayment of RUS Guaranteed Federal Financing Bank Loans 
                Pursuant to Section 306(A) of the RE Act
 
Sec. 1786.35  Loss, theft, destruction, mutilation, or defacement of RUS guarantee.

    (a) Authorized representative. Except where the evidence of debt was 
or is a bearer instrument, the RUS Administrator is authorized on behalf 
of RUS to issue a replacement guarantee(s) for one(s) which may have 
been lost, stolen, destroyed, mutilated, or defaced. Such replacement(s) 
shall be issued only to the lender or holder and only upon receipt of an 
acceptable certificate of loss and an indemnity bond.
    (b) Requirements. When a guarantee(s) is lost, stolen, destroyed, 
mutilated, or defaced while in the custody of the lender, or holder, the 
lender will coordinate the activities of the party who seeks the 
replacement documents and will submit the required documents to RUS for 
processing. The requirements for replacement are as follows:
    (1) A certificate of loss properly notarized which includes:
    (i) Legal name and present address of the owner, requesting the 
replacement forms;
    (ii) Legal name and address of lender of record;
    (iii) Capacity of person certifying;
    (iv) Full identification of the guarantee, including the name of the 
borrower, date of the guarantee, face amount of the evidence of debt 
purchased, date of evidence of debt and present balance of the loan. Any 
existing parts of the documents to be replaced should be attached to the 
certificate;
    (v) A full statement of circumstances of the loss, theft, or 
destruction of the guarantee; and

[[Page 1099]]

    (vi) The lender or holder, shall present evidence demonstrating 
current ownership of the guarantee and note. If the present holder is 
not the same as the original lender, a copy of the endorsement of each 
successive holder in the chain of transfer from the initial private 
lender to present holder shall be included. If copies of the endorsement 
cannot be obtained, best available records of transfer shall be 
presented to RUS (e.g., order confirmation, cancelled checks, etc).
    (2) An indemnity bond acceptable to RUS shall accompany the request 
for replacement except when the holder is the United States, a Federal 
Reserve Bank, a Federal Government Corporation, a state or territory, or 
the District of Columbia. The bond may be with or without surety. The 
bond shall be with surety except when the outstanding principal balance 
and accrued interest due the present holder is less than $1,000,000 
verified by the lender in writing in a letter of certification of 
balance due. The surety shall be a qualified surety company holding a 
certificate of authority from the Secretary of the Treasury and listed 
in Treasury Department Circular 580.
    (3) All indemnity bonds shall be issued and/or payable to the United 
States of America acting through the Administrator of the Rural 
Utilities Service. The bond shall be in an amount not less than the 
unpaid principal and interest. The bond shall save RUS harmless against 
any claim or demand which might arise or against any damage, loss, 
costs, or expenses which might be sustained or incurred by reasons of 
the loss or replacement of the instruments.