[Code of Federal Regulations]
[Title 49, Volume 4]
[Revised as of October 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 49CFR260.53]

[Page 879-880]
 
                        TITLE 49--TRANSPORTATION
 
       CHAPTER II--FEDERAL RAILROAD ADMINISTRATION, DEPARTMENT OF 
                             TRANSPORTATION
 
PART 260_REGULATIONS GOVERNING LOANS AND LOAN GUARANTEES UNDER THE RAILROAD 
 
                    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:

[[Page 880]]

    (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;
    (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.