[Code of Federal Regulations]
[Title 7, Volume 10]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR1403.9]

[Page 353-355]
 
                          TITLE 7--AGRICULTURE
 
  CHAPTER XIV--COMMODITY CREDIT CORPORATION, DEPARTMENT OF AGRICULTURE
 
PART 1403_DEBT SETTLEMENT POLICIES AND PROCEDURES--Table of Contents
 
Sec.  1403.9  Late payment interest and administrative charges.

    (a)(1) The provisions of this section are applicable to all persons 
whose debt to CCC becomes delinquent after January 1, 1990, unless the 
debtor and CCC agree otherwise.
    (2) Late payment interest provisions of this section shall not 
apply:
    (i) To debts owed by Federal agencies and State and local 
governments. Interest on debts owed by such entities

[[Page 354]]

shall be charged in accordance with applicable statutes or, if none are 
applicable, at the rate of interest charged by the U.S. Treasury for 
funds borrowed by CCC on the day the debt became delinquent;
    (ii) If an applicable statute, regulation, agreement or contract 
either prohibits the charging of such interest or specifies the interest 
or charges applicable to the debt involved;
    (iii) If the late payment interest is waived by CCC.
    (b) CCC will assess late payment interest on the full amount of 
delinquent debts. For purposes of this section, the term ``full amount 
of the delinquent debt'' means the sum of the principal, accrued regular 
loan interest or accrued program interest, and any other charges which 
are otherwise due and owing to CCC on the delinquent debt at the time 
the late payment interest is assessed, except as provided in paragraphs 
(a)(2) and (d)(3) of this section.
    (c) The late payment interest shall be expressed as an annual rate 
of interest which CCC charges on delinquent debts. The late payment 
interest rate shall be equal to the higher of the Treasury Department's 
current value of funds rate or the rate of interest assessed under the 
Prompt Payment Act, determined as of the date specified in paragraphs 
(d)(1) and (d)(2) of this section.
    (d)(1) When a debt results from a statute, regulation, contract or 
other agreement with specific provisions for late payment interest and 
payment due date, late payment interest shall accrue on the amount of 
the debt from the first day the debt became delinquent, unless otherwise 
provided by statute.
    (2) With respect to debts not resulting from a statute, regulation, 
contract or agreement containing specific provisions for late payment 
interest and payment due date, late payment interest shall begin to 
accrue from the date on which notice of the debt is first mailed or 
hand-delivered to the debtor, except that, with respect to debts 
resulting from price support loans, late payment interest shall begin to 
accrue from the date on which a claim is established.
    (3) The rate of late payment interest initially assessed will be 
fixed for the duration of the indebtedness, except when a debtor has 
defaulted on a repayment agreement and seeks to enter into a new 
agreement. CCC may then set a new rate of interest which reflects the 
late payment interest rate in effect at the time the new agreement is 
executed. All charges which accrued, but which were not collected under 
the defaulted agreement, shall be added to the principal to be paid 
under a new repayment agreement.
    (4) The late payment interest on delinquent debts will accrue on a 
daily basis.
    (e)(1) Except as specified in paragraphs (a)(2) and (e)(2) of this 
section, an additional interest rate of three (3) percent per annum will 
be assessed on any portion of a debt which remains unpaid 90 days after 
the date described in paragraph (d)(1) or (d)(2) of this section, if no 
repayment schedule satisfactory to CCC has been agreed upon. Such rate 
will be assessed retroactively from the date late payment interest began 
to accrue and apply on a daily basis. Such rate shall continue to accrue 
until the delinquent debt has been paid.
    (2) With respect to debts resulting from price support loans, an 
additional interest rate of three (3) percent per annum will be assessed 
on a portion of a debt which remains unpaid 60 days after the date on 
which a claim was established. Such rate will be assessed retroactively 
from the date of claim establishment and apply on a daily basis. Such 
rate shall continue to accrue until the delinquent debt has been paid.
    (f) CCC shall assess as administrative charges the additional costs 
of processing delinquent debts against the debtor, to the extent such 
costs are attributable to the delinquency. Such costs include, but are 
not limited to, costs incurred in obtaining a credit report, costs of 
employing commercial firms to locate debtor, costs of employing 
contractors for collection services, costs of selling collateral or 
property to satisfy the debt.
    (g) When a debt is paid in partial or installment payments, payments 
will be applied first to administrative

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charges, second to additional interest assessed in accordance with 
paragraph (e) of this section and late payment interest, and third to 
outstanding principal.

[54 FR 52878, Dec. 22, 1989, as amended at 56 FR 66955, Dec. 27, 1991; 
60 FR 43706, Aug. 23, 1995]