§9622 Terms and conditions

Summary

The Corporation must set the terms for loans, guarantees, and other support it gives. It may only use these powers when needed to fix a credit market problem or to meet a specific U.S. development or foreign policy goal on a case-by-case basis. Loan terms must follow rules: maturities can’t be longer than 25 years or the project’s ability to pay, whichever is shorter. Project partners must face at least 20 percent of the guarantee’s loss risk. The Corporation may seek waivers to guarantee up to 100 percent only if project parties still bear at least 20 percent risk. The borrower and lender must be responsible, and loans must protect the U.S. financial interest. Interest rates for direct loans and supplements will follow a market benchmark like Treasury yields, set with the OMB Director and the Secretary of the Treasury, and the Corporation must set and update minimum rates. Fees and premiums must be set to keep government costs low while meeting program goals, and fees must be reviewed to cover estimated costs. Guarantees are treated as proof the guarantee was properly made and the loan qualified, unless there was fraud or big misrepresentation by the holder. The Corporation must use clear standards to check credit risk, judge a project’s development and strategic value, provide only the minimum needed support, and usually place its loans on equal or senior footing with other senior debt. Loans and guarantees can only be made if Congress provides budget authority first. For lending through intermediaries, the Corporation must match industry best practices and create truth-in-lending rules. It must report those rules within 180 days after December 18, 2025, and update them yearly as needed. Rules must protect vulnerable microfinance customers, avoid harsh penalties, prevent abusive or usurious lending, require clear borrower disclosures (rights, loan terms, penalties, privacy, and other key facts), and include audits of intermediary lending with results reported annually.