[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7452 Introduced in House (IH)]

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116th CONGRESS
  2d Session
                                H. R. 7452

To require the Secretary of Agriculture to provide relief from hardship 
due to the COVID-19 pandemic to certain borrowers of rural development 
                     loans, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              July 1, 2020

Ms. Finkenauer introduced the following bill; which was referred to the 
                        Committee on Agriculture

_______________________________________________________________________

                                 A BILL


 
To require the Secretary of Agriculture to provide relief from hardship 
due to the COVID-19 pandemic to certain borrowers of rural development 
                     loans, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Relief for Rural Development 
Borrowers Act''.

SEC. 2. SUBSIDY FOR PAYMENTS AND LOAN DEFERMENT FOR RURAL DEVELOPMENT 
              LOANS.

    (a) Definition of Secretary.--In this section, the term 
``Secretary'' means the Secretary of Agriculture.
    (b) Subsidy for Certain Loan Payments.--
            (1) Definition of covered loan.--In this subsection, the 
        term ``covered loan'' means--
                    (A) a business and industry guaranteed loan under 
                section 310B(g) of the Consolidated Farm and Rural 
                Development Act (7 U.S.C. 1932(g)), other than such a 
                loan guaranteed using amounts made available for the 
                ``Rural Business Program Account'' by title I of 
                division B of the Coronavirus Aid, Relief, and Economic 
                Security Act (Public Law 116-136);
                    (B) a community facility guaranteed loan under 
                section 306(a) of the Consolidated Farm and Rural 
                Development Act (7 U.S.C. 1926(a)); and
                    (C) a community facility direct loan under section 
                306(a) of the Consolidated Farm and Rural Development 
                Act (7 U.S.C. 1926(a)).
            (2) Principal and interest payments.--
                    (A) In general.--The Secretary shall pay the 
                principal, interest, and any associated fees that are 
                owed on a covered loan in a regular servicing status--
                            (i) with respect to a covered loan made 
                        before the date of enactment of this Act and 
                        not on deferment, for the 6-month period 
                        beginning with the next payment due on the 
                        covered loan;
                            (ii) with respect to a covered loan made 
                        before the date of enactment of this Act and on 
                        deferment, for the 6-month period beginning 
                        with the next payment due on the covered loan 
                        after the deferment period; and
                            (iii) with respect to a covered loan made 
                        during the period beginning on the date of 
                        enactment of this Act and ending on the date 
                        that is 6 months after that date of enactment, 
                        for the 6-month period beginning with the first 
                        payment due on the covered loan.
                    (B) Timing of payment.--The Secretary shall begin 
                making payments under subparagraph (A) on a covered 
                loan not later than 30 days after the date on which the 
                first payment described in that subparagraph is due.
                    (C) Application of payment.--Any payment made by 
                the Secretary under subparagraph (A) shall be applied 
                to the covered loan such that the borrower is relieved 
                of the obligation to pay that amount.
            (3) Other requirements.--The Secretary shall--
                    (A) communicate and coordinate with the Federal 
                Deposit Insurance Corporation, the Office of the 
                Comptroller of the Currency, and State bank regulators 
                to encourage those entities to not require lenders to 
                increase their reserves on account of receiving 
                payments made by the Secretary under paragraph (2);
                    (B) waive statutory limits on maximum loan 
                maturities for any covered loan durations where the 
                lender provides a deferral and extends the maturity of 
                covered loans during the 1-year period following the 
                date of enactment of this Act; and
                    (C) when necessary to provide more time because of 
                the potential of higher volumes, travel restrictions, 
                and the inability to access some properties during the 
                COVID-19 pandemic, extend lender site visit 
                requirements to--
                            (i) not more than 60 days (which may be 
                        extended at the discretion of the Secretary) 
                        after the occurrence of an adverse event, other 
                        than a payment default, causing a loan to be 
                        classified as in liquidation; and
                            (ii) not more than 90 days after a payment 
                        default.
            (4) Effect.--Nothing in this section limits the authority 
        of the Secretary to make payments pursuant to paragraph (2) 
        with respect to a covered loan solely because the covered loan 
        has been sold in the secondary market.
    (c) Subsidy for Other Loan Payments.--
            (1) Definition of covered loan.--In this subsection, the 
        term ``covered loan'' means a rural development loan made or 
        guaranteed by the Secretary, other than a loan described in 
        subparagraph (A), (B), or (C) of subsection (b)(1).
            (2) Principal and interest payments.--The Secretary shall 
        pay the principal, interest, and fees, for a borrower of a 
        covered loan the application of which is approved under 
        paragraph (4)(B)--
                    (A) with respect to a covered loan made before the 
                date of enactment of this Act and not otherwise on 
                deferment, for the 6-month period beginning with the 
                next payment due on the covered loan;
                    (B) with respect to a covered loan made before the 
                date of enactment of this Act and otherwise on 
                deferment, for the 6-month period beginning with the 
                next payment due on the covered loan after the 
                deferment period; and
                    (C) with respect to a covered loan made during the 
                period beginning on the date of enactment of this Act 
                and ending on the date that is 6 months after that date 
                of enactment, for the 6-month period beginning with the 
                first payment due on the covered loan.
            (3) Loans held by other lenders.--In the case of a covered 
        loan held by a lender that is not the Secretary, the Secretary 
        shall require the lender to provide the complete payment 
        deferment relief described in paragraph (2).
            (4) Applications.--
                    (A) In general.--A borrower seeking payment 
                subsidies under paragraph (2) or (3) shall submit to 
                the Secretary an application in such manner and 
                containing such information as the Secretary may 
                require.
                    (B) Determinations.--The Secretary shall approve an 
                application submitted under subparagraph (A) by a 
                borrower that, as determined by the Secretary and 
                demonstrated in the application--
                            (i) is unable to make payments on a covered 
                        loan because of a temporary cash flow 
                        disruption due to the COVID-19 pandemic; and
                            (ii) makes a good faith certification that 
                        the current economic conditions have made 
                        payment deferment relief necessary.
            (5) Secondary market.--With respect to a covered loan that 
        is sold on the secondary market, if an investor declines to 
        approve a deferral requested by a lender under paragraph (3), 
        the Secretary shall exercise the authority to purchase the 
        covered loan so that the borrower may receive a deferral under 
        this subsection.
            (6) Guidance.--Not later than 30 days after the date of 
        enactment of this Act, the Secretary shall provide guidance on 
        the deferment process described in this subsection.
    (d) Waiver Authority.--
            (1) In general.--The Secretary may waive any requirement 
        that a borrower of a covered loan reduce or eliminate a debt 
        reserve established by the borrower, as a condition of granting 
        a loan deferment under this section.
            (2) Conditions.--The Secretary may provide such a waiver--
                    (A) when a borrower is seeking deferment as the 
                result of an inability to make payments on a covered 
                loan (as defined in subsection (b)(1) because of a 
                temporary cash flow disruption due to the COVID-19 
                pandemic, if paying down a reserve established by the 
                borrower for debt servicing poses a threat to the 
                continuing financial stability of the borrower; and
                    (B) under other conditions as the Secretary may 
                deem necessary.
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