[Federal Register Volume 86, Number 62 (Friday, April 2, 2021)]
[Rules and Regulations]
[Pages 17274-17275]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-06381]


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DEPARTMENT OF AGRICULTURE

Rural Utilities Service

7 CFR Part 1752

RIN 0572-AC41


Special Servicing of Telecommunications Programs Loans for 
Financially Distressed Borrowers

AGENCY: Rural Utilities Service, USDA.

ACTION: Final rule; confirmation and response to comments.

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SUMMARY: The Rural Utilities Service (RUS), a Rural Development agency 
of the United States Department of Agriculture (USDA), is confirming 
the final rule published in the Federal Register on February 25, 2020 
to outline the general policies for servicing actions associated with 
financially distressed borrowers from the Telecommunications 
Infrastructure Loan Program, Rural Broadband Program, Distance Learning 
and Telemedicine Program, Broadband Initiatives Program, and Rural e-
Connectivity Pilot Program. This document also provides the Agency an 
opportunity to acknowledge the one public comment received on the final 
rule.

DATES: Effective April 2, 2021, the final rule published February 25, 
2020 at 85 FR 10555 is confirmed.

FOR FURTHER INFORMATION CONTACT: Laurel Leverrier, Assistant 
Administrator Telecommunications Program, Rural Utilities Service, U.S. 
Department of Agriculture (USDA), email: [email protected], 
telephone: (202) 720-3416.

SUPPLEMENTARY INFORMATION: The Rural Utilities Service improves the 
quality of life in rural America by providing investment capital for 
deployment of rural telecommunications infrastructure. To achieve the 
goal of increasing economic opportunity in rural America,

[[Page 17275]]

the Agency finances infrastructure that enables access to a seamless, 
nationwide telecommunications network. With access to the same advanced 
telecommunications networks as its urban counterparts--especially those 
designed to accommodate distance learning, telework, and telemedicine--
rural America will eventually see improving educational opportunities, 
health care, economies, safety and security, and ultimately higher 
employment. The Telecommunications Infrastructure Loan Program, Rural 
Broadband Program, Distance Learning and Telemedicine Program, 
Broadband Initiatives Program and ReConnect Program (hereinafter 
collectively referred to as the ``RUS Telecommunications Programs'') 
provide loan funding to build and expand broadband and 
telecommunications services in rural communities.
    This final rule confirms the final rule that published in the 
Federal Register on February 25, 2020 at 85 FR 10555, which outlines 
the general policies and procedures for servicing actions associated 
with the RUS Telecommunications Programs Borrowers in financial 
distress with the mutual objective of avoiding or resolving a monetary 
default of the RUS debt. This final rule will ensure that recipients 
comply with the established objectives and requirements for loans, 
repaying loans on schedule or within the revised terms as agreed to by 
the Agency, and act in accordance with any necessary agreements. It 
will also ensure that the Agency will handle servicing actions in a 
consistent approach across all RUS Telecommunications Programs, as well 
as protect the financial interest of the Agency.

Summary of Comments and Responses

    RUS invited comments on the final rule published in the Federal 
Register on February 25, 2020 at (85 FR 10555). While two comments were 
received, one was not relevant to this rule. The only relevant comment, 
submitted by NTCA-THE RURAL BROADBAND ASSOCIATION, contained four (4) 
modifications/considerations relevant to the servicing rule (SR). The 
Agency's responses are as follows:
    Issue 1: NTCA recommends the creation of an interface to guide 
staff and borrowers to the selection of the most appropriate loan 
servicing option.
    Agency Response: RUS agrees that the suggestion to have interface 
with borrowers to receive guidance from the Agency is a suggestion 
worth exploring and will take it under consideration. Since every 
distressed borrower has distinct financial and legal issues, the agency 
is considering issuing written guidance, such as FAQs, and 
implementing, a help desk, or possibly even outreach events such as 
webinars.
    Issue 2: NTCA recommends the agency consider historic repayment 
performance of borrowers (both individually and in the respective 
programs) in reservicing proceedings.
    Agency Response: In determining feasibility of any requested 
action, the agency already takes into consideration the borrower's 
historical and current financial information, which includes its 
repayment history. Additionally, the required financial forecast 
provides the Agency with the borrower's own assessment and prediction 
as to repayment.
    Issue 3: NTCA urges consideration of the utilization of waivers to 
avoid ``unnecessary or onerous filings''.
    Agency Response:
    RUS is mindful of the timing and the cost associated with preparing 
some of the required information to seek special servicing actions. 
However, the agency needs to request the core documents for 
consideration of all distressed borrowers so that all every borrower is 
treated in the same manner. More importantly, these core documents are 
the minimum financial information that is necessary to make an informed 
decision on the servicing option.
    With respect to the additional documents that may be requested by 
the Agency under section 1752.6, the agency notes that only information 
related to the specific servicing action will be requested. That said, 
the borrower will have ample opportunity to suggest the most efficient 
and cost-effective ways to provide this information to the RUS.
    Issue 4: NTCA supports the conclusion of reservicing requests 
within a reasonable timeframe.
    Agency Response: RUS agrees that timing is often critical in 
dealing with financially distressed borrowers whose resources may be 
limited and are rapidly being depleted. It is nevertheless important 
not to rush through a process which may lead to overlooking key factors 
or result in outright errors which may waste precious time in the long 
run.
    As indicated above, most distressed borrowers have distinct 
financial and legal issues which require different periods to resolve. 
The time frame for completing a loan workout is a function of numerous 
factors including: (1) The complexity and depth of the challenges 
facing the borrower; (2) the completeness and quality of the 
information provided with the initial request; (3) how much time since 
the problems surfaced before the borrower seeks assistance; and (4) the 
experience and qualifications of management and their team. The 
availability of resources at RUS may also be a factor. As such, it 
would not be in the best interest of any of the parties to establish a 
set timeframe for servicing. Similarly, a ``fast track'' of the 
process, or the use of waivers, may not produce the best possible 
outcome for the borrower.
    The RUS appreciates the interest of the NTCA-The Rural Broadband 
Association (NTCA) with regard to the Special Servicing of 
Telecommunications Programs Loans for Financially Distressed Borrowers 
final rule and thanks them for their submission.

Christopher A. McLean,
Acting Administrator, Rural Utilities Service.
[FR Doc. 2021-06381 Filed 4-1-21; 8:45 am]
BILLING CODE 3410-15-P