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Thursday,
June 17, 1954

C O D IF IC A T IO N

g u id e
FEDERAL REGISTER
C on.

Title 6 Continued Chapter IH :
Part 365------------------ -
Part 372_.r --------------Part 373_.--------------------____
Chapter IV;.

Page
--------- ___

Title 19
Chapter I : Part 13______________ ________ ___

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3563

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3565

Title 39
Chapter I :
;
Part 127 2 docum ents__ 3564,3565

Title 47

"

Chapter I:
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Part 4 proposed_____________
Part 8 proposed_____________
3585
Part 12 pro po sed ____________ 3588
Part 13 proposed 2 docu ments____________________ 3588,3589
fixed so that loans to any one borrower outstanding at any time m ay not exceed the following percentages of the banks combined capital, legal reserve, earned surplus, and reserve fo r contingencies:
a Facility loans, 15 percent;
b Operating capital loans, 20 per cent;
c Commodity loans excluding loans secured by Commodity Credit Corpora tion documents, 25 percent;
d The sum of facility and operating capital loans, 20 percent;
e The sum o f facility, operating capital, and commodity loans excluding loans secured by Commodity Credit C or poration documents, 35 percent;
Provided, however, T h a t a loan made within established limits, but w hich be comes excessive by virtue of a subsequent decrease in the banks combined capital, legal reserve, earned surplus, and reserve for contingencies, m ay be retained and liquidated in an orderly manner.
Secs. 34, 38, 48 Stat. 262, 264, 12 U . S. C.
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P art 365 R e f in a n c in g A cco unts
o o te l l ,
Governor.
F. R. Doc. 54-4610; Filed, June 16, 1954;
8:52 a. m .

of
L o an
P art 372 S e c u r it y S ervicing and L iq
u id a t io n s ; F arm O w n e r s h ip L oans P art 373 S e c u r it y S e rvicing and L iq
u id a t io n s ; F arm H o u s in g L o ans REFINANCING DEBTS OWED TO OR INSURED
; B Y THE FARMERS HOME ADMINISTRATION

1. Sections 372.3 and 373.2 in Title 6
o f the Code o f Federal Regulations 14
F. R. 2081,17 F. R. 4281 are revoked.
2. Subchapter E in C hapter H I, Title 6, Code o f Federal Regulations, is amended by adding to it F a rt 365, as follows.
Sec.
365.1
365.2
365.3
365.4

Title 36
Chapter H :
Part 251_____ ----------------- ___

Subchapter E Account Servicing F H A In stru ction 451.6

Title 21
Chapter I :
Part 146a ;--------------- - ___
Part 146c-____ __ i.-------------Part 146e__________________ _ ___

Chapter III Farmers Home Adminis tration, Department of Agriculture
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3539

Title 7
Chapter V II:
Part 723 2 docum ents------ 3543, 3547
3549
Part 725------------------------------ -___
Part 726-------- ----------- ___ 3553
Part 727--------- ----------- ------ ___ 3556
Chapter IX :
Part 933 2 docum ents------ ___ 3559
Part 936 5 documents 3560-3562
3565
Part 953 proposed ----------- ___
Part 970 pro po sed ----------- ___ 3566
Title 14
Chapter I:
Part 42 .

3539

G en eral.
D ete rm in in g w h ich b orrow ers sh ou ld refinance.
N otice to borrow ers.
A ctio n su b se qu e n t to request if b o r ro w er fa ils to refinance.

A u t h o r i t y : 365.1 to 365.4 issued u n d e r R . S. 161, sec. 6 3 , 50 Stat. 870, sec. 41 i , 60 Stat. 1066, sec. 510 g , 63 Stat. 438, sec.
4 c , 64 Stat. 100; 5 U . S. C. 22, 16 U . S. C.
590w 3 , 7 U . S. C. 1015 i , 42 U . S. C. 1480
g , 40 U . S. C. 442 c . Statutes Interpreted o r app lied are cited to text in parentheses.

365.1 General. A ll borrowers in debted on direct or insured F arm O w ner ship loans, F arm Housing loans, Produc tion and Subsistence loans, o r W a te r Facilities loans will be requested to re finance their accounts w hen it appears to the Farm ers Home Adm inistration th at they have become able to obtain refinancing credit from responsible co operative or private sources at reasonable rates and terms. T h e laws applicable to F a rm Ownership, F arm Housing, and Production and Subsistence loans require such refinancing under certain condi tions, and corresponding provisions are contained in the instruments which se cure such loans.
a Direct Farm Ownership or Farm Housing borrowers.
Such a borrower w ill be requested to refinance his indebt edness when it appears to the Farm ers H om e Adm inistration that h e has ac quired sufficient equity in the fa rm which secres his loan to enable him to obtain credit fo r this purpose from a responsible cooperative o r private source at rates not exceeding 5 percent per annum and on terms prevailing in the area.
b Insured Farm Ownership borrow ers. Such a borrower w ill be requested to refinance his indebtedness w hen the conditions stated in p aragrap h a of this section have been met; provided, however, the request, to the borrower to refinance m ay be delayed until the bo r row er has acquired sufficient equity in the fa rm to enable the insured creditor to refinance the loan on an Uninsured basis under laws or regulations to which the creditor is subject.
c Production and Subsistence bor rowers and W ater Facilities borrowers.
Su ch a borrow er will be requested to re
finance his indebtedness w hen it appears to the Farm ers Hom e Adm inistration that, by reason of his progress in carry
in g out the planned improvements in his farm in g operations or fo r any other re a son, he is able to obtain refinancing credit from local sources at rates and terms prevailing in the area.
Secs. 3 b 6 a n d 7 , 12 c 4 , 44 b , 44 c , as am ended, 60 Stat. 1074, 1075, 1076, 1069, sec. 502 b 3 , 63 Stat. 433, sec. 2 f , 64 Stat. 99, sec. 3, 65 Stat. 198; 7 U . S. C. 1003
b 6 an d 7 , 1005b c 4 , 1018 b , c , 42 U . S. C. 1472 b 3 , 40 U . S. C. 440 f

365.2 Determining which borrowers should refinance.
T h e County Super visor and the members o f the County Committee shall keep currently inform ed w ith respect to the lending policies, rates, and terms including requirements fo r security o f the various sources which furnish agricultural credit in the area. Once every year, not later th an 90 days following the end o f the crop year, the County Supervisor will refer to the County Committee the case o f each borrower who appears to meet the con ditions set fo rth in 365.1 applicable to the borrowers type o f loan. T h e County Committee w ill thoroughly consider the m atter and furnish the County Super visor with its recommendations. T h e County Supervisor w ill consider such recommendations and w ill determine whether the borrower shall be requested to refinance.
Sec. 42 d , 60 Stat. 1067, sec. 508 b , 63
S tat. 436; 7 U . S. C. 1016 d , 42 U . S. C.
1478 b

365.3 Notice to borrowers. Except as otherwise provided in this section fo r insured F arm Ownership loans, each bor row er whom the County Supervisor de termines should seek refinancing will be requested in w riting immediately by the County Supervisor to refinance his Farm ers Home Adm inistration account and to report to him within 60 days from the date of the request as to the progress m ade in arranging fo r refinancing, in
cluding inform ation as to credit sources contacted and the reasons if the bor row er is unable to obtain refinancing credit. T h e County Supervisor will re fra in from attempting to influence b o r rowers in exercising their choices as to where they w ill obtain refinancing credit.
In the case o f an insured loan, a request to refinance, based on the annual review fo r that year, will not be sent to the bor row er if the State Director determines th at such delay is necessary to enable the insured creditor to qualify as a refinancing source available to the borrower.
Sec. 3, 65 Stat. 198; 7 U . S. C. 1018 c

365.4 Action subsequent to request if borrower fails to refinance. A t the expiration o f 60 days Tollowing the date o f a request to refinance sent to the bor row er in accordance with 365.3, if the borrower has not reported that he has arranged to refinance his Farm ers Hom e Adm inistration account, the County Supervisor w ill proceed as provided in this section. In this connection, the County Supervisor m ay contact the credit sources which have been or re a sonably could have been approached by the borrower.
a
Cases to be referred to State D i rector, In the case of any F arm O w n er-