Definitions and Abbreviations, 7517-7518 [2012-3244]

Agencies

• DEPARTMENT OF AGRICULTURE
• Rural Business-Cooperative Service
• Rural Utilities Service

[Federal Register Volume 77, Number 29 (Monday, February 13, 2012)]
[Rules and Regulations]
[Pages 7517-7518]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-3244]



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Federal Register / Vol. 77, No. 29 / Monday, February 13, 2012 / 
Rules and Regulations

[[Page 7517]]



DEPARTMENT OF AGRICULTURE

Rural Business-Cooperative Service

Rural Utilities Service

7 CFR Part 4279

RIN 0570-AA87


Definitions and Abbreviations

AGENCY: Rural Business-Cooperative Service, Rural Utilities Service, 
USDA.

ACTION: Direct final rule.

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SUMMARY: The Rural Business-Cooperative Service is amending its 
regulations for the Business and Industry Guaranteed Loan Program to 
clarify that the Agency guarantee does not cover default and penalty 
interest or late charges. The Agency's regulations are currently silent 
on this issue. However, it has always been the Agency's policy not to 
pay out additional cost for default interest, penalty interest, and 
late charges calculated and submitted on a final report of loss claim 
under the Loan Note Guarantee. The Agency does permit the lender to 
charge default interest with prior Agency approval. By defining 
``interest'' in the definition section of the regulation and clarifying 
the Agency's policy as it relates to default interest, penalty 
interest, and late charge, this will avert any misunderstandings.

DATES: This rule will become effective April 13, 2012 without further 
action unless the Agency receives written adverse comments or written 
notices of intent to submit adverse comments on or before March 14, 
2012. If the Agency receives adverse comments or notices, the Agency 
will publish a timely document in the Federal Register withdrawing the 
amendment.
    Any adverse comments received will be considered under the proposed 
rule published in this edition of the Federal Register in the proposed 
rule section. A second public comment period will not be held. Written 
comments must be received by the Agency or carry a postmark or 
equivalent no later than March 14, 2012.

ADDRESSES: You may submit adverse comments or notice of intent to 
submit adverse comments to this rule by any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Submit written comments via the U.S. Postal Service 
to the Branch Chief, Regulations and Paperwork Management Branch, U.S. 
Department of Agriculture, STOP 0742, 1400 Independence Avenue SW., 
Washington, DC 20250-0742.
     Hand Delivery/Courier: Submit written comments via Federal 
Express Mail or other courier service requiring a street address to the 
Branch Chief, Regulations and Paperwork Management Branch, U.S. 
Department of Agriculture, 300 7th Street SW., 7th Floor, Washington, 
DC 20024.
    All written comments will be available for public inspection during 
regular work hours at the 300 7th Street SW., 7th Floor address listed 
above.

FOR FURTHER INFORMATION CONTACT: Mr. David Lewis, Rural Development, 
Business Programs, U.S. Department of Agriculture, 1400 Independence 
Avenue SW., Stop 3221, Washington, DC 20250-3221; email: 
david.lewis@wdc.usda.gov; telephone (202) 690-0797.

SUPPLEMENTARY INFORMATION:

Classification

    This rule has been determined to be not significant for purposes of 
Executive Order 12866 and has not been reviewed by the Office of 
Management and Budget (OMB).

Programs Affected

    The Catalog of Federal Domestic Assistance Program number assigned 
to the Business and Industry Guaranteed Loan Program is 10.768. The 
Catalog of Federal Domestic Assistance Program number assigned to the 
Biorefinery Assistance is 10.865. The Catalog of Federal Domestic 
Assistance Program number assigned to the Rural Energy for America 
Program is 10.868.

Environmental Impact Statement

    This document has been reviewed in accordance with 7 CFR part 1940, 
subpart G, ``Environmental Program.'' Rural Development has determined 
that this action does not constitute a major Federal action 
significantly affecting the quality of the human environment and, in 
accordance with the National Environmental Policy Act (NEPA) of 1969, 
42 U.S.C. 4321 et seq., an Environmental Impact Statement is not 
required.

Executive Order 12372, Intergovernmental Consultation

    The program is subject to the provisions of Executive Order 12372, 
which requires intergovernmental consultation with State and local 
officials. Consultation will be completed at the time of the action 
performed.

Executive Order 12988, Civil Justice

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. The Agency has determined that this rule meets the 
applicable standards provided in section 3 of the Executive Order. 
Additionally, (1) all State and local laws and regulations that are in 
conflict with this rule will be preempted; (2) no retroactive effect 
will be given to the rule; and (3) administrative appeal procedures, if 
any, must be exhausted before litigation against the Department or its 
Agencies may be initiated, in accordance with the regulations of the 
National Appeals Division of USDA at 7 CFR part 11.

Executive Order 13132, Federalism

    The policies contained in this rule do not have any substantial 
direct effect on States, on the relationship between the National 
Government and the States, or on the distribution of power and 
responsibilities among the various levels of government. Nor does this 
final rule impose substantial direct compliance costs on State and 
local Governments. Therefore, consultation with States is not required.

Regulatory Flexibility Act Certification

    Under section 605(b) of the Regulatory Flexibility Act, 5 U.S.C. 
605(b), the Agency certifies that this rule will not have a significant 
economic impact on a substantial number of small entities. The Agency 
made this determination based on the fact that this regulation only 
impacts those who choose to participate in the program. Small entity 
applicants will

[[Page 7518]]

not be impacted to a greater extent than large entity applicants.

Unfunded Mandates

    This rule contains no Federal mandates (under the regulatory 
provisions of Title II of the Unfunded Mandates Reform Act of 1995) for 
State, local, and tribal Governments or the private sector. Thus, this 
rule is not subject to the requirements of sections 202 and 205 of the 
Unfunded Mandates Reform Act of 1995.

Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments

    This executive order imposes requirements on Rural Development in 
the development of regulatory policies that have tribal implications or 
preempt tribal laws. Rural Development has determined that the final 
rule does not have a substantial direct effect on one or more Indian 
tribe(s) or on either the relationship or the distribution of powers 
and responsibilities between the Federal Government and Indian tribes. 
Thus, this final rule is not subject to the requirements of Executive 
Order 13175. If a tribe determines that this rule has implications of 
which Rural Development is not aware and would like to engage with 
Rural Development on this rule, please contact Rural Development's 
Native American Coordinator at AIAN@wdc.usda.gov.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995, the 
information collection activities associated with this rule are covered 
under the Business and Industry Guaranteed Loan Program, OMB Number: 
0570-0017.
    This rule contains no new reporting or recordkeeping burdens under 
OMB control number 0570-0017 that would require approval under the 
Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35).

E-Government Act Compliance

    Rural Development is committed to complying with the E-Government 
Act, to promote the use of the Internet and other information 
technologies, to provide increased opportunities for citizens to access 
Government information and services electronically.

I. Background

    The Agency reviewed 7 CFR 4279.2 which is composed of two 
paragraphs, the first of which is pertinent.
    Section 4279.2(a) discusses the definitions, which has thirty-seven 
terms used in the Guaranteed Loanmaking. The definitions and 
abbreviations contained in Sec.  4279.2 also apply to the Business and 
Industry Guaranteed Loan Servicing regulations and, unless otherwise 
noted, the Biorefinery Assistance Loan Program and the Rural Energy for 
America Program. Currently, the Agency regulations do not define or 
otherwise address ``interest'', ``default interest'', ``penalty 
interest'', or ``late charges''. However, it is the Agency's policy not 
to pay out additional cost for default interest, penalty interest, and 
late charges calculated and submitted on a final report of loss claim 
under the Loan Note Guarantee. However, lender's Promissory Note may 
contain provisions for default or penalty interest, or late charges 
with prior Agency approval.

II. Discussion of Change

    The Agency is revising Sec.  4279.2(a), to address the situation 
discussed in the ``Background'' section. Specifically, the Agency is 
adding a paragraph in Sec.  4279.2(a), after the term ``Holder'' and 
before the term ``Interim Financing'', which will define ``Interest.'' 
The change being made by this rule is to clarify that ``interest'' does 
not include default or penalty interest, or late fees. The lender may 
charge the borrower these fees with prior Agency approval. Accordingly, 
the Agency is making the changes in this direct final rule.

List of Subjects in 7 CFR Part 4279

    Business and industry, Loan programs, Rural development assistance.

    For the reasons set forth in the preamble, chapter XLII, title 7, 
of the Code of Federal Regulations is amended as follows:

CHAPTER XLII--RURAL BUSINESS-COOPERATIVE SERVICE AND RURAL UTILITIES 
SERVICE, DEPARTMENT OF AGRICULTURE

PART 4279--GUARANTEED LOANMAKING

0
1. The authority citation for part 4279 continues to read as follows:

    Authority:  5 U.S.C. 301; 7 U.S.C. 1932(a); and 7 U.S.C. 1989.

Subpart A--General

0
2. Paragraph (a) of Sec.  4279.2 is amended by adding a new definition 
of Interest, to read as follows:


Sec.  4279.2  Definitions and abbreviations.

* * * * *
    Interest. A fee paid by a borrower to the lender as a form of 
compensation for the use of money. When money is borrowed, interest is 
paid as a fee over a certain period of time (typically months or years) 
to the lender as a percentage of the principal amount owed. 
``Interest'' does not include default or penalty, or late fees or 
charges. The lender may charge these fees and interest with prior 
Agency approval, but they are not covered by the Loan Note Guarantee.
* * * * *

    Dated: February 2, 2012.
Dallas Tonsager,
Under Secretary, Rural Development.
[FR Doc. 2012-3244 Filed 2-10-12; 8:45 am]
BILLING CODE 3410-XY-P