[Federal Register Volume 72, Number 93 (Tuesday, May 15, 2007)]
[Rules and Regulations]
[Page 27241]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-2400]



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  Federal Register / Vol. 72, No. 93 / Tuesday, May 15, 2007 / Rules 
and Regulations  

[[Page 27241]]



DEPARTMENT OF AGRICULTURE

Rural Business-Cooperative Service

Rural Utilities Service

7 CFR Part 4279

RIN 0570-AA54


Business and Industry Guaranteed Loan Program; Correction

AGENCY: Rural Business-Cooperative Service, USDA.

ACTION: Correcting amendment.

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SUMMARY: This document contains corrections to the final regulations 
which were published in the Federal Register on Monday, November 20, 
2006 [71 FR 67032] regarding personal and corporate guarantees.

DATES: Effective on May 15, 2007.

FOR FURTHER INFORMATION CONTACT: David Lewis, Business and Industry 
Loan Servicing Branch, Rural Business-Cooperative Service, U.S. 
Department of Agriculture, STOP 3224, 1400 Independence Avenue, SW., 
Washington, DC 20250-3224, telephone (202) 690-0797, or by e-mail to 
[email protected].

SUPPLEMENTARY INFORMATION:

Background

    The final regulation that is the subject of this correction was 
intended to require those owning a substantial stock ownership of at 
least 20 percent to provide a personal or corporate guarantee.

Need for Correction

    As published, the final regulation contained an error, which may 
prove misleading and cause confusion for the public.

List of Subjects in 7 CFR Part 4279

    Loan programs--Business and Industry--Rural Development assistant, 
rural areas.

0
Accordingly, 7 CFR part 4279 is corrected by making the following 
correcting amendment:

PART 4279--GUARANTEED LOANMAKING

0
1. The authority citation for part 4279 continues to read as follows:

    Authority: 5 U.S.C. 301; 7 U.S.C. 1989.

Subpart B--Business and Industry Loans

0
2. Revise paragraph (a) of Sec.  4279.149 to read as follows:


Sec.  4279.149  Personal and corporate guarantee.

    (a) Unconditional personal and corporate guarantees are part of the 
collateral for the loan, but are not considered in determining whether 
a loan is adequately secured for loanmaking purposes. Agency approved 
personal and corporate guarantees for the full term of the loan and at 
least equal to the guarantor's percent interest in the borrower, times 
the loan amount are required from those owning at least a 20 percent 
interest in the borrower, unless the lender documents to the Agency's 
satisfaction that collateral, equity, cashflow, and profitability 
indicate an above-average ability to repay the loan. The guarantors 
will execute an Agency approved unconditional guarantee form. When 
warranted by an Agency assessment of potential financial risk, Agency 
approved guarantees may also be required of parent, subsidiaries, or 
affiliated companies (owning less than a 20 percent interest in the 
borrower) and require security for any guarantee provided under this 
section.
* * * * *

    Dated: April 30, 2007.
Jackie J. Gleason,
Administrator, Rural Business-Cooperative Service.
[FR Doc. 07-2400 Filed 5-14-07; 8:45 am]
BILLING CODE 3410-XY-P