Relief for Rural Development Borrowers Act
This bill requires the Department of Agriculture (USDA) to pay the principal, interest, and any associated fees owed on certain USDA rural development loans for a six-month period.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7452 Introduced in House (IH)]
<DOC>
116th CONGRESS
2d Session
H. R. 7452
To require the Secretary of Agriculture to provide relief from hardship
due to the COVID-19 pandemic to certain borrowers of rural development
loans, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 1, 2020
Ms. Finkenauer introduced the following bill; which was referred to the
Committee on Agriculture
_______________________________________________________________________
A BILL
To require the Secretary of Agriculture to provide relief from hardship
due to the COVID-19 pandemic to certain borrowers of rural development
loans, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Relief for Rural Development
Borrowers Act''.
SEC. 2. SUBSIDY FOR PAYMENTS AND LOAN DEFERMENT FOR RURAL DEVELOPMENT
LOANS.
(a) Definition of Secretary.--In this section, the term
``Secretary'' means the Secretary of Agriculture.
(b) Subsidy for Certain Loan Payments.--
(1) Definition of covered loan.--In this subsection, the
term ``covered loan'' means--
(A) a business and industry guaranteed loan under
section 310B(g) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1932(g)), other than such a
loan guaranteed using amounts made available for the
``Rural Business Program Account'' by title I of
division B of the Coronavirus Aid, Relief, and Economic
Security Act (Public Law 116-136);
(B) a community facility guaranteed loan under
section 306(a) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1926(a)); and
(C) a community facility direct loan under section
306(a) of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1926(a)).
(2) Principal and interest payments.--
(A) In general.--The Secretary shall pay the
principal, interest, and any associated fees that are
owed on a covered loan in a regular servicing status--
(i) with respect to a covered loan made
before the date of enactment of this Act and
not on deferment, for the 6-month period
beginning with the next payment due on the
covered loan;
(ii) with respect to a covered loan made
before the date of enactment of this Act and on
deferment, for the 6-month period beginning
with the next payment due on the covered loan
after the deferment period; and
(iii) with respect to a covered loan made
during the period beginning on the date of
enactment of this Act and ending on the date
that is 6 months after that date of enactment,
for the 6-month period beginning with the first
payment due on the covered loan.
(B) Timing of payment.--The Secretary shall begin
making payments under subparagraph (A) on a covered
loan not later than 30 days after the date on which the
first payment described in that subparagraph is due.
(C) Application of payment.--Any payment made by
the Secretary under subparagraph (A) shall be applied
to the covered loan such that the borrower is relieved
of the obligation to pay that amount.
(3) Other requirements.--The Secretary shall--
(A) communicate and coordinate with the Federal
Deposit Insurance Corporation, the Office of the
Comptroller of the Currency, and State bank regulators
to encourage those entities to not require lenders to
increase their reserves on account of receiving
payments made by the Secretary under paragraph (2);
(B) waive statutory limits on maximum loan
maturities for any covered loan durations where the
lender provides a deferral and extends the maturity of
covered loans during the 1-year period following the
date of enactment of this Act; and
(C) when necessary to provide more time because of
the potential of higher volumes, travel restrictions,
and the inability to access some properties during the
COVID-19 pandemic, extend lender site visit
requirements to--
(i) not more than 60 days (which may be
extended at the discretion of the Secretary)
after the occurrence of an adverse event, other
than a payment default, causing a loan to be
classified as in liquidation; and
(ii) not more than 90 days after a payment
default.
(4) Effect.--Nothing in this section limits the authority
of the Secretary to make payments pursuant to paragraph (2)
with respect to a covered loan solely because the covered loan
has been sold in the secondary market.
(c) Subsidy for Other Loan Payments.--
(1) Definition of covered loan.--In this subsection, the
term ``covered loan'' means a rural development loan made or
guaranteed by the Secretary, other than a loan described in
subparagraph (A), (B), or (C) of subsection (b)(1).
(2) Principal and interest payments.--The Secretary shall
pay the principal, interest, and fees, for a borrower of a
covered loan the application of which is approved under
paragraph (4)(B)--
(A) with respect to a covered loan made before the
date of enactment of this Act and not otherwise on
deferment, for the 6-month period beginning with the
next payment due on the covered loan;
(B) with respect to a covered loan made before the
date of enactment of this Act and otherwise on
deferment, for the 6-month period beginning with the
next payment due on the covered loan after the
deferment period; and
(C) with respect to a covered loan made during the
period beginning on the date of enactment of this Act
and ending on the date that is 6 months after that date
of enactment, for the 6-month period beginning with the
first payment due on the covered loan.
(3) Loans held by other lenders.--In the case of a covered
loan held by a lender that is not the Secretary, the Secretary
shall require the lender to provide the complete payment
deferment relief described in paragraph (2).
(4) Applications.--
(A) In general.--A borrower seeking payment
subsidies under paragraph (2) or (3) shall submit to
the Secretary an application in such manner and
containing such information as the Secretary may
require.
(B) Determinations.--The Secretary shall approve an
application submitted under subparagraph (A) by a
borrower that, as determined by the Secretary and
demonstrated in the application--
(i) is unable to make payments on a covered
loan because of a temporary cash flow
disruption due to the COVID-19 pandemic; and
(ii) makes a good faith certification that
the current economic conditions have made
payment deferment relief necessary.
(5) Secondary market.--With respect to a covered loan that
is sold on the secondary market, if an investor declines to
approve a deferral requested by a lender under paragraph (3),
the Secretary shall exercise the authority to purchase the
covered loan so that the borrower may receive a deferral under
this subsection.
(6) Guidance.--Not later than 30 days after the date of
enactment of this Act, the Secretary shall provide guidance on
the deferment process described in this subsection.
(d) Waiver Authority.--
(1) In general.--The Secretary may waive any requirement
that a borrower of a covered loan reduce or eliminate a debt
reserve established by the borrower, as a condition of granting
a loan deferment under this section.
(2) Conditions.--The Secretary may provide such a waiver--
(A) when a borrower is seeking deferment as the
result of an inability to make payments on a covered
loan (as defined in subsection (b)(1) because of a
temporary cash flow disruption due to the COVID-19
pandemic, if paying down a reserve established by the
borrower for debt servicing poses a threat to the
continuing financial stability of the borrower; and
(B) under other conditions as the Secretary may
deem necessary.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Agriculture.
Referred to the Subcommittee on Commodity Exchanges, Energy, and Credit.
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