[Code of Federal Regulations]

[Title 49, Volume 4]

[Revised as of October 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 49CFR260.53]



[Page 836-837]

 

                        TITLE 49--TRANSPORTATION

 

       CHAPTER II--FEDERAL RAILROAD ADMINISTRATION, DEPARTMENT OF 

                             TRANSPORTATION

 

PART 260_REGULATIONS GOVERNING LOANS AND LOAN GUARANTEES UNDER THE 

 

                    Subpart F_Loan Guarantees_Lenders

 

Sec.  260.53  Lenders' functions and responsibilities.



    Lenders have the primary responsibility for the successful delivery 

of the program consistent with the policies and procedures outlined in 

this part. All Lenders obtaining or requesting a loan guarantee from the 

Administrator are responsible for:

    (a) Loan processing. Lender shall be responsible for all aspects of 

loan processing, including:

    (1) Processing applications for the loan to be guaranteed;

    (2) Developing and maintaining adequately documented loan files;

    (3) Recommending only loan proposals that are eligible and 

financially feasible;

    (4) Obtaining valid evidence of debt and collateral in accordance 

with sound lending practices;

    (5) Supervising construction, where appropriate;

    (6) Distributing loan funds;

    (7) Servicing guaranteed loans in a prudent manner, including 

liquidation if necessary; and

    (8) Obtaining the Administrator's approval or concurrence as 

required in the loan guarantee documentation;

    (b) Credit evaluation. Lender must analyze all credit factors 

associated with each proposed loan and apply its professional judgment 

to determine that the credit factors, considered in combination, ensure 

loan repayment. The Lender must have an adequate underwriting process to 

ensure that loans are reviewed by other than the originating officer. 

There must be good credit documentation procedures;

    (c) Environmental responsibilities. Lender has a responsibility to 

become familiar with Federal environmental requirements; to consider, in 

consultation with the prospective borrower, the potential environmental 

impacts of their proposals at the earliest planning stages; and to 

develop proposals that minimize the potential to adversely impact the 

environment. Lender must alert the Administrator to any controversial 

environmental issues related to a proposed project or items that may 

require extensive environmental review. Lender must assist borrowers as 

necessary to comply with the environmental requirements outlined in this 

part. Additionally, Lender will assist in the collection of additional 

data when the Agency needs such data to complete its environmental 

review of the proposal; and assist in the resolution of environmental 

problems;



[[Page 837]]



    (d) Loan closing. The Lender will conduct or arrange for loan 

closings; and

    (e) Fees and Charges. The Lender may establish charges and fees for 

the loan provided they are similar to those normally charged other 

Applicants for the same type of loan in the ordinary course of business.