§3908 Foreign Loan Evaluations

Summary

Banks must prepare a written economic feasibility study before making, leasing, guaranteeing, or otherwise providing any credit over $20,000,000 for projects whose main goal is building or running mines, metal or mineral processing plants, fabricating shops, or metal-making operations located outside the United States and its territories. A senior bank official must approve that written study in writing before the credit is extended. If several banks are involved, the lead bank must approve it. The study must check profit potential, effects on world markets, the project’s long-term competitive strengths and weaknesses, and how it will affect the host country’s long-term economic development. It must also determine whether the loan can be paid back from the project’s own revenues without counting any subsidy from the foreign government or its agencies. Federal banking regulators will review these studies during exams and may use their normal enforcement tools. No one may sue based only on these rules.