§1943 — Title 7 Agriculture | U.S. Code

Summary

The Secretary must not make or insure a loan that would push a borrower’s total principal owed at one time above $400,000 for direct loans or $1,750,000 for guaranteed loans. The $1,750,000 limit is increased starting with fiscal year 2019 by an inflation percentage and is lowered by the borrower’s unpaid debt on certain other guaranteed loans covered by section 1925. The Secretary also must not make loans to buy or lease land except for cash rent, and may not fund programs for buying or leasing land. The inflation percentage for a fiscal year is how much the 12‑month average of the Prices Paid By Farmers Index ending July 31 of the prior fiscal year is higher than the average for the 12 months before that. The Secretary may run a microloan program. No borrower may owe more than $50,000 in microloans at one time. The Secretary should keep microloan rules simple and speedy. From 2014 through 2023, the Secretary may run a pilot that lends up to $10,000,000 per year to community development financial institutions to make microloans and offer business and credit help. Before lending to such an institution, the Secretary must review and approve its loan loss reserve and underwriting, set other needed rules, and make sure the institution has legal authority, a proven record with farm borrowers, and qualified staff. Institutions must report to the Secretary at least once a year as required.

Title 7, §1943

Agriculture — Source: USLM XML via OLRC

(a)The Secretary shall make or insure no loan under this subchapter—

(1)that would cause the total principal indebtedness outstanding at any one time for loans made under this subchapter to any one borrower to exceed, in the case of a loan other than a loan guaranteed by the Secretary, $400,000, or, in the case of a loan guaranteed by the Secretary, $1,750,000 (increased, beginning with fiscal year 2019, by the inflation percentage applicable to the fiscal year in which the loan is guaranteed and reduced by the unpaid indebtedness of the borrower on loans under the sections specified in section 1925 of this title that are guaranteed by the Secretary); or

(2)for the purchasing or leasing of land other than for cash rent, or for carrying on any land leasing or land purchasing program.

(b)For purposes of this section, the inflation percentage applicable to a fiscal year is the percentage (if any) by which—

(1)the average of the Prices Paid By Farmers Index (as compiled by the National Agricultural Statistics Service of the Department of Agriculture) for the 12-month period ending on July 31 of the immediately preceding fiscal year; exceeds

(2)the average of such index (as so defined) for the 12-month period that immediately precedes the 12-month period described in paragraph (1).

(c)(1)Subject to paragraph (2), the Secretary may establish a program to make or guarantee microloans.

(2)The Secretary shall not make or guarantee a microloan under this subsection that would cause the total principal indebtedness outstanding at any 1 time for microloans made under this subsection to any 1 borrower to exceed $50,000.

(3)To the maximum extent practicable, the Secretary shall limit the administrative burdens and streamline the application and approval process for microloans under this subsection.

(4)(A)Subject to subparagraph (B), during each of the 2014 through 2023 fiscal years, the Secretary may carry out a pilot project to make loans to community development financial institutions, as the Secretary determines appropriate—

(i)to make or guarantee microloans consistent with the terms provided under this subsection; and

(ii)to provide business, financial, marketing, and credit management services to microloan borrowers.

(B)Prior to making a loan to an institution described in subparagraph (A), the Secretary shall—

(i)review and approve—

(I)the loan loss reserve fund for microloans established by the institution; and

(II)the underwriting standards for microloans of the institution; and

(ii)establish such other requirements for making a loan to the institution as the Secretary determines necessary.

(C)To be eligible for a loan under subparagraph (A), an institution described in subparagraph (A) shall, as determined by the Secretary—

(i)have the legal authority necessary to carry out the actions described in subparagraph (A);

(ii)have a proven track record of successfully assisting agricultural borrowers; and

(iii)have the services of a staff with appropriate loan making and servicing expertise.

(D)Not less often than annually, on a date determined by the Secretary, an institution that has a loan under this paragraph shall provide to the Secretary such information as the Secretary may require to ensure that the services provided by the institution are serving the purposes of this subsection.

(E)The Secretary shall not make more than $10,000,000 in loans under this paragraph in any fiscal year.

Notes & Related Subsidiaries

Editorial Notes

Codification The authorities provided by each provision of, and each amendment made by, Pub. L. 115–334, as in effect on Sept. 30, 2023, to continue, and authorities to be carried out, until the later of Sept. 30, 2024, or the date specified in the provision of, or amendment made by, Pub. L. 115–334, see section 102(a) of Pub. L. 118–22, set out in an Extension of Agricultural Programs note under section 9001 of this title. Pub. L. 110–234 and Pub. L. 110–246 made identical

Amendments

to this section. The

Amendments

by Pub. L. 110–234 were repealed by section 4(a) of Pub. L. 110–246.

Amendments

2018—Subsec. (a)(1). Pub. L. 115–334, § 5201(1), substituted “$400,000” for “$300,000”, “$1,750,000” for “$700,000”, and “2019” for “2000”. Subsec. (b)(1). Pub. L. 115–334, § 5201(2)(A), substituted “July” for “August”. Subsec. (b)(2). Pub. L. 115–334, § 5201(2)(B), substituted “that immediately precedes the 12-month period described in paragraph (1)” for “ending on August 31, 1996”. Subsec. (c)(2). Pub. L. 115–334, § 5202, substituted “subsection to any 1 borrower” for “chapter to any 1 borrower”. Subsec. (c)(4)(A). Pub. L. 115–334, § 5203, substituted “2023” for “2018” in introductory provisions. 2014—Subsec. (c). Pub. L. 113–79 added subsec. (c). 2008—Subsec. (a)(1). Pub. L. 110–246, § 5102, substituted “$300,000” for “$200,000”. 1998—Pub. L. 105–277 inserted section catchline, designated existing provisions as subsec. (a), inserted heading, substituted “this subchapter—” for “this subchapter”, in introductory provisions, realigned margin of par. (1) and substituted “$700,000 (increased, beginning with fiscal year 2000, by the inflation percentage applicable to the fiscal year in which the loan is guaranteed and reduced by the unpaid indebtedness of the borrower on loans under the sections specified in section 1925 of this title that are guaranteed by the Secretary); or” for “$400,000; or”, realigned margin of par. (2), and added subsec. (b). 1984—Pub. L. 98–258 substituted “$200,000” and “$400,000” for “$100,000” and “$200,000”, respectively. 1978—Pub. L. 95–334 substituted provisions setting forth criteria for Secretary to make or insure loans under this subchapter for provisions setting forth criteria for Secretary to make loans under this subchapter. 1972—Pub. L. 92–419 substituted “$50,000” for “$35,000”. 1968—Pub. L. 90–488 struck out from item (1) the proviso which limited the amount to be used for loans which would cause the indebtedness of any borrower to exceed $15,000 to 25 per centum of the sums made available for loans.

Statutory Notes and Related Subsidiaries

Effective Date

of 2008 AmendmentAmendment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, see section 4 of Pub. L. 110–246, set out as an

Effective Date

note under section 8701 of this title.

§1943 Limitations on Amount of Operating Loans

Summary

Title 7, §1943

Notes & Related Subsidiaries

Editorial Notes

Amendments

Amendments

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Effective Date

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