[Code of Federal Regulations]
[Title 25, Volume 1]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 25CFR101.18]

[Page 300-301]
 
                            TITLE 25--INDIANS
 
     CHAPTER I--BUREAU OF INDIAN AFFAIRS, DEPARTMENT OF THE INTERIOR
 
PART 101--LOANS TO INDIANS FROM THE REVOLVING LOAN FUND--Table of Contents
 
Sec. 101.18  Uncollectible loans made by relending organizations.

    (a) Relending organizations conducting relending programs using 
revolving loan funds may, when approved by the Commissioner, chargeoff 
as uncollectible all or part of the balance of principal and interest 
owing on

[[Page 301]]

loans which are considered to be uncollectible. Usually a chargeoff 
includes both principal and interest and provides for cessation of 
interest accruals on the principal balance owing as of the date of the 
chargeoff.
    (b) Action to chargeoff a loan will be in the form of a resolution 
enacted by the committee or body authorized and responsible for actions 
on loan matters for the relending organization. Before action is taken 
to chargeoff a loan as uncollectible, the lender will make an effort, to 
the extent feasible, to liquidate the security given for a loan and 
apply the net proceeds as a repayment on the balance of principal and 
interest owed. The chargeoff of a loan by a relending organization as 
uncollectible will not reduce the principal balance owed to the United 
States. A chargeoff will not release the borrower of the obligation or 
the responsibility to make payments when his or her financial situation 
will permit. Chargeoff action will not release the lender of 
responsibility to continue its efforts to collect the loan.