§1983a Prompt Approval of Loans and Loan Guarantees

Summary

The Secretary of Agriculture must decide on a loan or loan-guarantee application and tell the applicant within 60 days after getting a complete application. If an application is incomplete (not under subchapter II), the Secretary must say why within 20 days. For operating loans under subchapter II, the Secretary must tell the applicant any missing information within 10 days, ask other USDA agencies for needed information, and those agencies must respond within 15 days. If requested information is still missing after 20 days, the Secretary must notify the applicant and the Farmers Home Administration district office in writing. County offices must tell the district office about any subchapter II application pending more than 45 days and why; the district office must act within 15 days of that notice and report to the State office. Each month the Secretary must tell the House and Senate Agriculture Committees, state by state, about any subchapter II application not decided within 60 days and why. If a loan is denied, the Secretary must give reasons. If a denial is only because there are not enough funds for certain loans (under sections 1932(a) or 1926(a)), the application must be put in pending status and reconsidered when funds are available; the applicant must be told of approval or denial within 60 days after funds arrive. If a loan is approved, the Secretary must deliver the money within 15 days (or sooner if funds arrive), unless the applicant agrees to wait longer. If a denial is reversed on appeal and the file comes back, the Secretary must act and notify the applicant within 15 days. Requests to be an approved lender under the approved lender program must be decided within 15 days. After December 23, 1985, the Secretary must provide enough staff, overtime pay, and other resources to help the Farmers Home Administration speed up farmer and rancher loan processing. Two defined terms: “approved lender” — a lender approved before October 28, 1992, under the listed approved lender program or certified under section 1989; “seasoned direct loan borrower” — a direct-loan borrower classified as “commercial” or “standard” as of January 1, 1991. The Secretary (or a contractor) must review each seasoned borrower every year, help them apply for a commercial or cooperative guaranteed loan if they can get one, and prepare a prospectus describing any guarantee and interest help the Secretary will offer. That prospectus must be sent to approved lenders in the borrower’s area and the borrower must be told. If a lender offers credit under the prospectus, the borrower generally cannot get a new insured direct loan. If guarantees or interest help are not enough or no offer is received, the Secretary must make an insured loan. The Secretary may lower interest rates as allowed under section 1999. The Secretary must provide short, simple application forms for farmer loans of $125,000 or less and for Business and Industry guaranteed loans of $400,000 or less in fiscal years 2002 and 2003 (and $400,000 or, if low risk, $600,000 in later years). The Secretary must speed up applications for water and waste loans or grants of $300,000 or less. The Secretary must consult lenders when making these forms and make them easy to fill out by hand or electronically, require little extra paperwork, cost little to complete, and be processed quickly. The Secretary should also, when practical, create a simplified, single-page application process for several other small grant and relending programs listed in the law.