§ 1946. Liability of borrower

Footnotes

1. 1 See References in Text note below.

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 1961

   Agricultural Act of 1961

   Pub. L. 87–128 title III § 316 · 75 Stat. 294

   Enacted · 7 U.S.C. § 1946

   Pub. L. 87–128, title III, § 316, Aug. 8, 1961, 75 Stat. 311

   Source evidence

   Code source credit
   Pub. L. 87–128, title III, § 316, Aug. 8, 1961, 75 Stat. 311

   Enacted provision · exact public law section
   Sec. 316. The Secretary shall make all loans under this subtitle at an interest rate not to exceed 5 per centum per annum, upon the full personal liability of the borrower and upon such security as the Secretary may prescribe. Such loans shall be payable in not more than seven years, but may be renewed for not more than five additional years.

2. 1968

   Pub. L. 90–488 § 10 · 82 Stat. 770

   Substituted · 7 U.S.C. § 1946

   Pub. L. 90–488 substituted provisions for determination of interest rate by taking into consideration current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities of the loans, adjusted to the nearest one-eighth of 1 per centum, plus not to exceed 1 per centum per annum as determined by the Secretary, for former prohibition of an interest rate exceeding 5 per centum per annum

   Source evidence

   Code amendment note
   Pub. L. 90–488 substituted provisions for determination of interest rate by taking into consideration current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities of the loans, adjusted to the nearest one-eighth of 1 per centum, plus not to exceed 1 per centum per annum as determined by the Secretary, for former prohibition of an interest rate exceeding 5 per centum per annum.

   Enacted provision · exact public law section
   Sec. 10. Section 316 is amended by (a) striking from the first sentence Interest rates. 7 USC 1946. “at an interest rate not to exceed 5 per centum per annum,” and (b) adding at the end of the section the following: “Loans made under this subtitle shall bear interest at a rate determined by the Secretary of the Treasury taking into consideration the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities of such loans, adjusted to the nearest one-eighth of 1 per centum, plus not to exceed 1 per centum per annum as determined by the Secretary.”

3. 1978

   Agricultural Credit Act of 1978

   Pub. L. 95–334 title I § 117 · 92 Stat. 420

   1. Amended · 7 U.S.C. § 1946

      Pub. L. 95–334 designated existing provisions as subsec. (a)

   2. Inserted · 7 U.S.C. § 1946

      Pub. L. 95–334 inserted provisions relating to depositing of charges and provisions relating to interest rates on guaranteed loans

   3. Struck · 7 U.S.C. § 1946

      Pub. L. 95–334 struck out provisions relating to payment and renewal of loans

   4. Added · 7 U.S.C. § 1946

      Pub. L. 95–334 added subsec. (b)

   Source evidence

   Code amendment note
   Pub. L. 95–334 designated existing provisions as subsec. (a), inserted provisions relating to depositing of charges and provisions relating to interest rates on guaranteed loans, struck out provisions relating to payment and renewal of loans, and added subsec. (b).

   Enacted provision · exact public law section
   Sec. 117. farm operating loan interest rates; consolidation and rescheduling of loans Section 316 of the Consolidated Farm and Rural Development Act is amended to read as follows: 7 USC 1946. “Sec. 316. (a) The Secretary shall make all loans under this subtitle upon the full personal liability of the borrower and upon such security as the Secretary may prescribe. The interest rates on such loans, except for guaranteed loans, shall be as determined by the Secretary, but not in excess of the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities of such loans, plus an additional charge not to exceed 1 per centum as determined by the Secretary, which charge shall be deposited in the Rural Development Insurance Fund or the Agricultural Credit Insurance Fund, as appropriate, and adjusted to the nearest one-eighth of 1 per centum. The interest rate on any guaranteed loan made under this subtitle shall be such rate as may be agreed upon by the borrower and lender, but not in excess of a rate as may be determined by the Secretary. “(b) Loans made under this subtitle shall be payable in not to exceed seven years. The Secretary may consolidate or reschedule outstanding loans for payment over a period not to exceed seven years from the date of such consolidation or rescheduling, and the amount of unpaid principal and interest of the prior loans so consolidated or rescheduled shall not create a new charge against any loan levels authorized by law. A new loan may be included in a consolidation. Such new loan shall be charged against any loan level authorized by law. The interest rate on such consolidated or rescheduled loans, other than guaranteed loans, may be changed by the Secretary to a rate not to exceed the rate being charged for loans made under this subtitle at the time of the consolidation or rescheduling. The interest rate on any guaranteed loan under this subtitle that may be consolidated or rescheduled for payment shall be such rate as may be agreed upon by the borrower and the lender, but not in excess of a rate as may be determined by the Secretary.”.

4. 1981

   Pub. L. 97–35 title I § 160(b) · 95 Stat. 357

   1. Redesignated · 7 U.S.C. § 1946(a)

      Pub. L. 97–35 redesignated existing provisions as par. (1)

   2. Inserted · 7 U.S.C. § 1946(a)

      Pub. L. 97–35 inserted reference to loans guaranteed under pars. (2) and (3)

   3. Added · 7 U.S.C. § 1946(a)

      Pub. L. 97–35 added pars. (2) and (3)

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 97–35 redesignated existing provisions as par. (1), inserted reference to loans guaranteed under pars. (2) and (3), and added pars. (2) and (3).

   Enacted provision · exact public law section
   (b) Section 316(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1946(a)) is amended by— (1) inserting “(1)” after “(a)”; (2) inserting in the second sentence “and loans as provided in paragraphs (2) and (3)” after “except for guaranteed loans”; and (3) adding at the end thereof new paragraphs (2) and (3) as follows: “(2) The interest rate on any loan (other than a guaranteed loan) to a low-income, limited resource borrower under this subtitle shall be the interest rate otherwise applicable under this section reduced by 3 per centum per annum. “(3) The interest rate on any loan (other than a guaranteed loan) 7 USC 1942. Ante, p. 376. made or insured under clause (5) of section 312(a) for activities that involve the use of prime farmland as defined in section 307(a)(6)(C) shall be the interest rate otherwise applicable under this section increased by 2 per centum per annum.”.

   Effective date note
   Amendment by Pub. L. 97–35 applicable to loans made after Sept. 30, 1981, see section 160(c) of Pub. L. 97–35, set out as a note under section 1927 of this title.

5. 1984

   Emergency Agricultural Credit Act of 1984

   Pub. L. 98–258 title VI § 604(b) · 98 Stat. 130

   1. Inserted · 7 U.S.C. § 1946(b)

      Pub. L. 98–258 inserted “(or, in the case of loans for farm operating purposes, fifteen years)”

   2. Substituted · 7 U.S.C. § 1946(b)

      Pub. L. 98–258 substituted “Except as otherwise provided for farm loans under section 1981b of this title, the interest rate” for “The interest rate”

   Source evidence

   Code amendment note
   Subsec. (b). Pub. L. 98–258 inserted “(or, in the case of loans for farm operating purposes, fifteen years)” and substituted “Except as otherwise provided for farm loans under section 1981b of this title, the interest rate” for “The interest rate”.

   Enacted provision · exact public law section
   (b) Section 316(b) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1946(b)) is amended by— (1) in the second sentence, inserting “(or, in the case of loans for farm operating purposes, fifteen years)” after “seven years”; and (2) in the fifth sentence, striking out “The interest rate” and inserting in lieu thereof “Except as otherwise provided for farm loans under section 331B of this title, the interest rate”. Infra.

6. 1990

   Food, Agriculture, Conservation, and Trade Act of 1990

   Pub. L. 101–624 title XVIII § 1803(b) · 104 Stat. 3359

   Amended · 7 U.S.C. § 1946(a)(2)

   Pub. L. 101–624 amended par. (2) generally. Prior to amendment, par. (2) read as follows: “The interest rate on any loan (other than a guaranteed loan) to a low-income, limited resource borrower under this subchapter shall be the interest rate otherwise applicable under this section reduced by 3 per centum per annum.”

   Source evidence

   Code amendment note
   Subsec. (a)(2). Pub. L. 101–624 amended par. (2) generally. Prior to amendment, par. (2) read as follows: “The interest rate on any loan (other than a guaranteed loan) to a low-income, limited resource borrower under this subchapter shall be the interest rate otherwise applicable under this section reduced by 3 per centum per annum.”

   Enacted provision · exact public law section
   (b) Operating Loans.— Paragraph (2) of section 316(a) (7 U.S.C. 1946(a)(2)) is amended to read as follows: “(2) The interest rate on any loan (other than a guaranteed loan) to a low income, limited resource borrower under this subtitle shall not be— “(A) greater than the sum of— “(i) an amount that does not exceed one-half of the current average market yield on outstanding marketable obligations of the United States with maturities of 5 years; and “(ii) an amount not exceeding 1 percent per year, as the Secretary determines is appropriate; or “(B) less than 5 percent per year.”.

7. 1996

   Federal Agriculture Improvement and Reform Act of 1996

   Pub. L. 104–127 § 661(g) · 110 Stat. 888

   Struck · 7 U.S.C. § 1946(a)(3)

   Pub. L. 104–127, § 661(g), struck out par. (3) which read as follows: “The interest rate on any loan (other than a guaranteed loan) made or insured under clause (5) of section 1942(a) of this title for activities that involve the use of prime farmland as defined in section 1927(a)(6)(C) of this title shall be the interest rate otherwise applicable under this section increased by 2 per centum per annum.”

   Source evidence

   Code amendment note
   Subsec. (a)(3). Pub. L. 104–127, § 661(g), struck out par. (3) which read as follows: “The interest rate on any loan (other than a guaranteed loan) made or insured under clause (5) of section 1942(a) of this title for activities that involve the use of prime farmland as defined in section 1927(a)(6)(C) of this title shall be the interest rate otherwise applicable under this section increased by 2 per centum per annum.”

   Enacted provision · exact public law section
   (g) Section 316(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1946(a)) is amended by striking paragraph (3).

8. 1996

   Federal Agriculture Improvement and Reform Act of 1996

   Pub. L. 104–127 § 614 · 110 Stat. 888

   Added · 7 U.S.C. § 1946(c)

   Pub. L. 104–127, § 614, added subsec. (c)

   Source evidence

   Code amendment note
   Subsec. (c). Pub. L. 104–127, § 614, added subsec. (c).

   Enacted provision · exact public law section
   SEC. 614. LINE-OF-CREDIT LOANS. Section 316 of the Consolidated Farm and Rural Development Act (7 U.S.C. 1946) is amended by adding at the end the following: “(c) Line-of-Credit Loans.— “(1) In general.— A loan made or guaranteed by the Secretary under this subtitle may be in the form of a line-of-credit loan. “(2) Term.— A line-of-credit loan under paragraph (1) shall terminate not later than 5 years after the date that the loan is made or guaranteed. “(3) Eligibility.— For purposes of determining eligibility for a farm operating loan under this subtitle, each year during which a farmer or rancher takes an advance or draws on a line-of-credit loan the farmer or rancher shall be considered to have received an operating loan for 1 year. “(4) Termination of delinquent loans.— If a borrower does not pay an installment on a line-of-credit loan on schedule, the borrower may not take an advance or draw on the line-of-credit, unless the Secretary determines that— “(A) the borrower’s failure to pay on schedule was due to unusual conditions that the borrower could not control; and “(B) the borrower will reduce the line-of-credit balance to the scheduled level at the end of— “(i) the production cycle; or “(ii) the marketing of the borrower’s agricultural products. “(5) Agricultural commodities.— A line-of-credit loan may be used to finance the production or marketing of an agricultural commodity that— “(A) is eligible for a price support program of the Department of Agriculture; or “(B) was eligible for a price support program of the Department of Agriculture on the day before the date of enactment of the Federal Agriculture Improvement and Reform Act of 1996.”.

9. 2014

   Agricultural Act of 2014

   Pub. L. 113–79 title V § 5106(b)(3) · 128 Stat. 649

   Inserted · 7 U.S.C. § 1946(a)(2)

   Pub. L. 113–79 inserted “a microloan to a beginning farmer or rancher or veteran farmer or rancher (as defined in section 2279(e) of this title), or” after “The interest rate on”

   Source evidence

   Code amendment note
   Subsec. (a)(2). Pub. L. 113–79 inserted “a microloan to a beginning farmer or rancher or veteran farmer or rancher (as defined in section 2279(e) of this title), or” after “The interest rate on”.

   Enacted provision · exact public law section
   (3) Section 316(a)(2) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1946(a)(2)) is amended in the matter preceding subparagraph (A) by inserting “a microloan to a beginning farmer or rancher or veteran farmer or rancher (as defined in section 2501(e) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 2279(e)), or” after “The interest rate on”.

15 of 15 references resolved to an enrolled provision