§3908 Foreign Loan Evaluations

Summary

Banks must prepare a written economic feasibility evaluation before making or arranging more than $20,000,000 in credit (by loan, lease, guarantee, or any other form) for projects mainly meant to build or run mining, metal/mineral primary processing, fabricating, or metal‑making (semi and finished) facilities outside the United States or its territories. A senior official at the lending bank, or the lead bank if several banks are involved, must approve that write‑up in writing before the credit is given. The evaluation must look at profit potential, the project’s likely effect on world markets, competitive strengths and weaknesses over the project’s life, and how the project will affect the long‑term economy of the host country. It must also assess whether the project can repay the credit from its own revenues without relying on government subsidies. Federal banking agencies will review these evaluations during their exams. Other federal banking powers also apply, with one specified exception, and no one can bring a private lawsuit based on these requirements.