12 U.S.C. § 2201: Notice of action on…

Summary

Qualified lenders must promptly send a written notice to anyone who applies for a loan that says what decision was made and, if the loan is reduced or denied, explains why. If a lender has a distressed loan covered by this chapter, it must promptly notify the borrower of any restructuring action under section 2202a and explain denials. Both notices must tell the person they can seek a review under section 2202.

Title 12, §2201

Banks and Banking, Source: USLM XML via OLRC

(a)Loan applications

Each qualified lender to which a person has applied for a loan shall provide the person with prompt written notice of— (1)

(2)if the loan applied for is reduced or denied, the reasons for such action; and

(3)the applicant’s right to review under section 2202 of this title.

(b)Distressed loans

Each qualified lender that has a distressed loan outstanding that is subject to restructuring requirements under this chapter shall provide, in accordance with regulations prescribed by the Farm Credit Administration, the borrower with prompt written notice of— (1)

(2)if restructuring is denied, the reasons for such action; and

(3)the borrower’s right to review under section 2202 of this title.

Notes & Related Subsidiaries

Editorial Notes

Amendments

1988—Pub. L. 100–233 amended section generally. Prior to amendment, section read as follows: “Every applicant for a loan from an institution of the System shall be entitled to prompt written notice of action on his application, and, if the loan applied for is reduced or denied, the reason for such action, and of the applicant’s right to review under section 2202 of this title.” 1985—Pub. L. 99–205, § 302, provided for a “written” notice and for the applicant’s right to review under section 2202 of this title.

Statutory Notes and Related Subsidiaries

Effective Date

of 1985 AmendmentAmendment by Pub. L. 99–205 effective thirty days after Dec. 23, 1985, see section 401 of Pub. L. 99–205, set out as a note under section 2001 of this title.

§2201 Notice of Action on Application