[Federal Register Volume 80, Number 49 (Friday, March 13, 2015)]
[Rules and Regulations]
[Pages 13199-13201]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-05435]



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 Rules and Regulations
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  Federal Register / Vol. 80, No. 49 / Friday, March 13, 2015 / Rules 
and Regulations  

[[Page 13199]]



DEPARTMENT OF AGRICULTURE

Rural Housing Service

Rural Business-Cooperative Service

Rural Utilities Service

Farm Service Agency

7 CFR Parts 1951 and 1956

RIN 0570-AA88


Rural Development Loan Servicing

AGENCY: Rural Housing Service, Rural Business-Cooperative Service, 
Rural Utilities Service, and Farm Service Agency, USDA.

ACTION: Direct final rule.

-----------------------------------------------------------------------

SUMMARY: The Rural Business-Cooperative Service is amending its 
regulations for Debt Settlement. This amendment would allow the Rural 
Business Service's (referred to as Agency throughout the remainder of 
the text) Administrator to use the statutory authority that has been 
delegated to him/her in accordance with title 331(b)(4) of the 
Consolidated Farm and Rural Development Act (CONACT), but is currently 
not being used for all of RBS's revolving loan programs, which include: 
The Intermediary Relending Program (IRP) loans, Rural Development Loan 
Fund (RDLF) loans, and the Rural Microentrepreneur Assistance Program 
(RMAP)loans. This regulation will allow the RBS to be consistent across 
all of its loan programs; all of RBS's other loan programs have 
regulations in place to settle debt.
    This Direct Final Rule is intended to authorize the Agency to use 
its independent debt settlement authority under CONACT. Nothing in this 
Direct Final Rule is intended to affect the requirements of the Agency 
to follow other applicable Federal debt collection law such as the Debt 
Collection Improvement Act of 1996, as amended. Further nothing in this 
Direct Final Rule is intended to alter any requirements the Agency must 
follow when making collection referrals to the Department of Justice or 
the Treasury Department.

DATES: This rule is effective May 18, 2015. Comments on this direct 
final rule must be received on or before April 13, 2015 to be assured 
of consideration.
    If RBS receives adverse comment(s) on all or a distinct portion of 
this rule, we will publish a timely withdrawal in the Federal Register 
informing the public that some of this rule or the entire direct final 
rule will not take effect. The rule provisions that are not withdrawn 
will become effective on the date set out above, notwithstanding 
adverse comments on any other provision, unless we determine that it 
would not be appropriate to promulgate those provisions.

ADDRESSES: You may submit comments to this direct final rule by any of 
the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Submit written comments via the U.S. Postal Service 
to the Branch Chief, Regulations and Paperwork Management Branch, U.S. 
Department of Agriculture, STOP 0742, 300 7th Street SW., 7th Floor, 
Washington, DC 20024.
     Hand Delivery/Courier: Submit written comments via Federal 
Express Mail, or other courier service requiring a street address, to 
the Branch Chief, Regulations and Paperwork Management Branch, U.S. 
Department of Agriculture. All written comments will be available for 
public inspection during regular work hours at the 300 7th Street SW., 
7th Floor address listed above.

FOR FURTHER INFORMATION CONTACT: Melvin Padgett, Rural Development, 
Business Programs, U.S. Department of Agriculture, 1400 Independence 
Avenue SW., Stop 3226, Washington, DC 20250-3225; email: 
[email protected]; telephone: (202) 720-1495.

SUPPLEMENTARY INFORMATION:

Executive Order 12866, Classification

    This rule has been determined to be significant for purposes of 
Executive Order 12866 and has been reviewed by the Office of Management 
and Budget (OMB). The Executive Order defines a ``significant 
regulatory action'' as one that is likely to result in a rule that may: 
(1) Have an annual effect on the economy of $100 million or more or 
adversely affect, in a material way, the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or Tribal Governments or 
communities; (2) Create a serious inconsistency or otherwise interfere 
with an action taken or planned by another agency; (3) Materially alter 
the budgetary impact of entitlements, grants, user fees, or loan 
programs or the rights and obligations of recipients thereof; or (4) 
Raise novel legal or policy issues arising out of legal mandates, the 
President's priorities, or the principles set forth in this Executive 
Order.
    The Agency conducted a benefit-cost analysis to fulfill the 
requirements of EO 12866. This rule will not impose any new costs for 
the public (customers, applicants, borrowers, grantees, recipients and/
or beneficiaries) of Rural Development's loan programs. This direct 
final rule permits the debt settlement policy to be uniform and 
consistent for all programs and will allow the Rural Development to 
process eligible debt settlement cases in a prompt and efficient 
manner.

Programs Affected

    The Catalog of Federal Domestic Assistance Program number assigned 
to the IRP is 10.767.

Environmental Impact Statement

    This document has been reviewed in accordance with 7 CFR, part 
1940, subpart G, ``Environmental Program.'' Rural Development has 
determined that this action does not constitute a major Federal action 
significantly affecting the quality of the human environment and, in 
accordance with the National Environmental Policy Act (NEPA) of 1969, 
42 U.S.C. 4321 et seq., an Environmental Impact Statement is not 
required.

Executive Order 12372, Intergovernmental Consultation

    The program is subject to the provisions of Executive Order 12372, 
which requires intergovernmental consultation with State and local 
officials. Consultation will be completed at the time of the action 
performed.

[[Page 13200]]

Executive Order 12988, Civil Justice

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. The Agency has determined that this rule meets the 
applicable standards provided in Sec.  3 of the Executive Order. 
Additionally, (1) all State and local laws and regulations that are in 
conflict with this rule will be preempted; (2) no retroactive effect 
will be given to the rule; and (3) administrative appeal procedures, if 
any, must be exhausted before litigation against the Department or its 
agencies may be initiated, in accordance with the regulations of the 
National Appeals Division of USDA at 7 CFR part 11.

Executive Order 13132, Federalism

    The policies contained in this rule do not have any substantial 
direct effect on States, on the relationship between the National 
Government and the States, or on the distribution of power and 
responsibilities among the various levels of government. Nor does this 
rule impose substantial direct compliance costs on State and local 
governments. Therefore, consultation with States is not required.

Regulatory Flexibility Act Certification

    Under section 605(b) of the Regulatory Flexibility Act, 5 U.S.C. 
605(b), the Agency certifies that this rule will not have a significant 
economic impact on a substantial number of small entities. The Agency 
made this determination based on the fact that this regulation only 
impacts those who choose to participate in the program. Small entity 
applicants will not be impacted to a greater extent than large entity 
applicants.

Unfunded Mandate Reform Act

    This rule contains no Federal mandates (under the regulatory 
provisions of Title II of the Unfunded Mandates Reform Act of 1995) for 
State, local, and Tribal Governments or the private sector. Thus, this 
rule is not subject to the requirements of Sec.  s 202 and 205 of the 
Unfunded Mandates Reform Act of 1995.

Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments

    This executive order imposes requirements on Rural Development (RD) 
in the development of regulatory policies that have tribal implications 
or preempt tribal laws. RD has determined that this rule does not have 
a substantial direct effect on one or more Indian tribe(s) or on either 
the relationship or the distribution of powers and responsibilities 
between the Federal Government and Indian tribes. Thus, this rule is 
not subject to the requirements of Executive Order 13175. If a tribe 
determines that this rule has implications of which RD is not aware and 
would like to engage with RD on this rule, please contact RD's Native 
American Coordinator at (720) 544-2911 or [email protected].

Paperwork Reduction Act

    This rule contains no new reporting or recordkeeping requirements 
that would require approval under the Paperwork Reduction Act of 1995 
(44 U.S.C. Chapter 35).

E-Government Act Compliance

    Rural Development is committed to complying with the E-Government 
Act, to promote the use of the Internet and other information 
technologies, to provide increased opportunities for citizens to access 
Government information and services electronically.

I. Background

    The process of debt settlement is a time consuming process. Before 
a borrower in default can settle their indebtedness to the Agency, 
current regulations require four levels of review: The local/area 
office, the State Office, the National Office, and finally a United 
States Department of Justice (DOJ) review. This review process results 
in loans that are eligible for debt settlement, to continue to sit on 
the books much longer than necessary, incurring interest, and 
decreasing the likelihood that a borrower will exist to collect 
recoveries once the loan is finally sent to the Department of the 
Treasury.
    The Agency has shown, through its use of the settlement authority 
in 7 U.S.C. 1981(b)(4) in its other loan programs, that it can 
judiciously and reasonably administer that authority on its own without 
the need for additional levels of review.
    By revising its regulations governing the review process for debt 
settlement, the Agency will be able to process debt settlement claims 
in a more uniform, prompt, and efficient manner.

II. Discussion of Changes

    The Agency is proposing to modify several paragraphs in 7 CFR part 
1951, subpart R and in 7 CFR part 1956, subpart C in order to allow the 
aforementioned loans to be settled under Agency policies and procedures 
for debt settlement as found in 7 CFR part 1956, subpart C, and to 
remove the requirement to send settlements to DOJ, allowing us to use 
the Federal Claims Collection Standards (31 CFR parts 900-904). This 
will permit the Agency to quickly and efficiently dispose of debt 
settlements. The specific changes are summarized below:
    1. The Agency is proposing to modify Sec.  1951.851(a) by adding a 
sentence to indicate that all debt settlement cases submitted under 7 
CFR part 1951, subpart R, will be handled in accordance with 7 CFR part 
1956, subpart C. The Agency is adding reference to the RMAP in the 
first sentence to indicate its inclusion.
    2. The Agency is proposing to revise Sec.  1951.894 to state that 
the debt settlement of all claims, which would now include RMAP, would 
be handled in accordance with 7 CFR 1956, subpart C. Specifically, the 
Agency is replacing the reference to Federal Claims Collection 
Standards, 4 CFR parts 101-105, with reference to ``Subpart C of Part 
1956 of this Chapter.''
    3. The Agency is proposing to revise Sec. Sec.  1956.101 so that 
debt settlement of RDLF loans, IRP loans and RMAP loans, will be under 
7 CFR part 1956, subpart C (and will be handled by the Agency's 
Administrator) rather than under the Federal Claims Collection 
Standards as currently provided in the regulation.
    4. The Agency is proposing to revise the introductory text to Sec.  
1956.147 to remove reference to RDLF loans and IRP loans. This is a 
conforming change that removes these loans from complying with the debt 
settlement provisions under the Federal Claims Collection Act.

List of Subjects

7 CFR Part 1951

    Loan programs--agriculture, Loan programs--housing and community 
development.

7 CFR Part 1956

    Loan programs--agriculture, Loan programs--housing and community 
development.

    For the reasons set forth in the preamble, chapter XVIII, title 7, 
of the Code of Federal Regulations is amended as follows:

CHAPTER XVIII--RURAL HOUSING SERVICE, RURAL BUSINESS-COOPERATIVE 
SERVICE, RURAL UTILITIES SERVICE, AND FARM SERVICE AGENCY, DEPARTMENT 
OF AGRICULTURE

PART 1951--SERVICING AND COLLECTIONS

0
1. The authority citation for part 1951 is revised to read as follows:

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

[[Page 13201]]

Subpart R--Rural Development Loan Servicing

0
2. Paragraph (a) of Sec.  1951.851 is revised to read as follows:


Sec.  1951.851  Introduction.

    (a) This subpart contains regulations for servicing or liquidating 
loans or other assistance made by the Rural Business-Cooperative 
Service or its successor agency under the IRP and the RMAP. All debt 
settlement cases under this subpart will be settled in accordance with 
the debt settlement provisions set forth in 7 CFR part 1956, subpart C. 
The provisions of this subpart supersede conflicting provisions of any 
other subpart.
* * * * *

0
3. Section 1951.894 is revised to read as follows:


Sec.  1951.894  Debt settlement.

    Debt settlement of all claims will be handled in accordance with 
subpart C of part 1956 of this chapter.

PART 1956--DEBT SETTLEMENT

0
4. The authority citation for part 1956 is revised to read as follows:

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

Subpart C--Debt Settlement--Community and Business Programs

0
5. Section 1956.101 is revised to read as follows:


Sec.  1956.101  Purpose.

    This subpart delegates authority and prescribes policies and 
procedures for debt settlement of Community Facility loans; Association 
Recreation loans; Rural Renewal loans; direct Business and Industry 
loans; Rural Development Loan Fund loans; Intermediary Relending 
Program loans; and the Rural Microentrepreneur Assistance Program 
(RMAP) loans and repayable portions of RMAP grants; and Shift-in-land-
use loans. Settlement of Economic Opportunity Cooperative loans, Claims 
Against Third Party Converters, Non-program loans, Rural Business 
Enterprise/Television Demonstration Grants, Nonprofit National 
Corporations Loans and Grants, and 601 Energy Impact Assistance Grants, 
is not authorized under independent statutory authority, and settlement 
under these programs is handled pursuant to the Federal Claims 
Collection Joint Standards, 31 CFR parts 900 through 904, inclusive. In 
addition, this subpart does not apply to Water and Waste Programs of 
the Rural Utilities Service, Watershed loans, and Resource Conservation 
and Development loans, which are serviced under part 1782 of this 
title.

0
6. The section heading and introductory text to Sec.  1956.147 are 
revised to read as follows:


Sec.  1956.147  Debt settlement under the Federal Claims Collection 
Standard.

    Unless otherwise provided in this title, loans and claims will be 
settled in accordance with the Federal Claims Collection Standards at 
31 CFR parts 900 through 904, inclusive.
* * * * *

    Dated: February 27, 2015.
Lisa Mensah,
Under Secretary.
    Dated: February 26, 2015.
Michael Scuse,
Under Secretary, Farm and Foreign Agricultural Services.
[FR Doc. 2015-05435 Filed 3-12-15; 8:45 am]
 BILLING CODE 3410-XY-P