Source of Repayment. Borrower is obligated to supply 50 percent or more of related borrower’s annual gross receipts, and reliance on the income from one another is such that the debt service of the related borrower could not be met if income flow from the borrower is interrupted or terminated. Commingled Operations: Assets or operations of the borrowers are commingled and cannot be separated without materially impacting the borrowers’ repayment ca- pacity The borrower owns 50 percent or more of the stock of the related bor- rower. The borrower owns or has the power to vote 25 percent or more of the voting stock of a related borrower, and (1) Shares a common directorate or management with a related bor- rower, or (2) Controls the election of a majority of directors of a related borrower, or (3) Exercises a controlling influence over management of a related bor- rower’s operations through the provisions of management placement or marketing agreements, or providing services such as insurance carrier or bookkeeping. No. Yes. Yes. Yes. Yes. [58 FR 40321, July 28, 1993, as amended at 62 FR 51015, Sept. 30, 1997. Redesignated and amend- ed at 64 FR 34517, June 28, 1999] (a) Each loan, except loans that are grandfathered under the provisions of § 614.4361, shall be in compliance with the lending and leasing limit on the date the loan is made, and at all times thereafter. Except as provided for in paragraph (b) of this section, loans which are in violation of the lending and leasing limit shall comply with the provisions of § 615.5090 of this chapter. (b) Under the following conditions a loan that violates the lending and leas- ing limit shall be exempt from the pro- visions of § 615.5090 of this chapter: (1) A loan in which the total amount of principal outstanding and undisbursed commitments exceed the lending and leasing limit because of a decline in permanent capital after the loan was made. (2) Loans on which funds are ad- vanced pursuant to a commitment that was within the lending and leasing limit at the time the commitment was made, even if the lending and leasing limit subsequently declines. (3) A loan that exceeds the lending and leasing limit as a result of the con- solidation of the debt of two or more borrowers as a consequence of a merger or the acquisition of one borrower’s op- erations by another borrower. Such a loan may be extended or renewed, for a period not to exceed 1 year from the date of such merger or acquisition, dur- ing which period the institution may advance and/or readvance funds not to exceed the greater of: (i) 110 percent of the advances to the borrower in the prior calendar year; or (ii) 110 percent of the average of the advances to the borrower in the past 3 calendar years. (c) For all lending and leasing limit violations except those exempted under § 614.4360(b)(3), within 90 days of the identification of the violation, the in- stitution must develop a written plan prescribing the specific actions that will be taken by the institution to bring the total amount of loans and commitments outstanding or attrib- uted to that borrower within the new lending and leasing limit, and must document the plan in the loan file. (d) All leases, except those permitted under § 614.4361, reading ‘‘effective date of this subpart’’ in § 614.4361(a) and ‘‘ef- fective date of these regulations’’ in § 614.4361(b) as ‘‘effective date of this amendment,’’ must comply with the lending and leasing limit on the date the lease is made, and at all times after that. (e) Nothing in this section limits the authority of the FCA to take adminis- trative action, including, but not lim- ited to, monetary penalties, as a result of lending and leasing limit violations. [58 FR 40321, July 28, 1993. Redesignated and amended at 64 FR 34517, June 28, 1999] (a) A loan (not including a commit- ment) made or attributed to a borrower prior to the effective date of this sub- part, which does not comply with the limits contained in this subpart, will not be considered a violation of the lending and leasing limits during the existing contract terms of such loans. A new loan must conform with the rules set forth in this subpart. A new loan includes but is not limited to: (1) Funds advanced in excess of exist- ing commitment; (2) A different borrower is sub- stituted for a borrower who is subse- quently released; or (3) An additional person becomes an obligor on the loan. (b) A commitment made prior to the effective date of these regulations which exceeds the lending and leasing limit may be funded to the full extent of the legal commitment. Any ad- vances that exceed the lending and leasing limit are subject to the provi- sions prescribed in § 614.4360. [58 FR 40321, July 28, 1993. Redesignated and amended at 64 FR 34517, 34518, June 28, 1999] The board of directors of each title I, II, and III System institution must adopt and ensure implementation of a written policy to effectively measure, limit and monitor exposures to con- centration risks resulting from the in- stitution’s lending and leasing activi- ties.
Appears in 2 contracts
Sources: Guaranty Agreement, Guaranty Agreement
Source of Repayment. Borrower is obligated to supply 50 percent or more of related borrower’s annual gross receipts, and reliance on the income from one another is such that the debt service of the related borrower could not be met if income flow from the borrower is interrupted or terminated. Commingled Operations: Assets or operations of the borrowers are commingled and cannot be separated without materially impacting the borrowers’ repayment ca- pacity The borrower owns 50 percent or more of the stock of the related bor- rower. Yes.* No.* No. Yes. Yes. Yes. TABLE 1—Continued Attribution rule Criteria per § 614.4359 Attribute (The borrower, directly or indirectly, controls the related borrower). The borrower owns or has the power to vote 25 percent or more of the voting stock of a related borrower, and (1) Shares a common directorate or management with a related bor- rower, or (2) Controls the election of a majority of directors of a related borrower, or (3) Exercises a controlling influence over management of a related bor- rower’s operations through the provisions of management placement or marketing agreements, or providing services such as insurance carrier or bookkeeping. No. Yes. Yes. Yes. Yes. [58 FR 40321, July 28, 1993, as amended at 62 FR 51015, Sept. 30, 1997. Redesignated and amend- ed at 64 FR 34517, June 28, 1999]
(a) Each loan, except loans that are grandfathered under the provisions of § 614.4361, shall be in compliance with the lending and leasing limit on the date the loan is made, and at all times thereafter. Except as provided for in paragraph (b) of this section, loans which are in violation of the lending and leasing limit shall comply with the provisions of § 615.5090 of this chapter.
(b) Under the following conditions a loan that violates the lending and leas- ing limit shall be exempt from the pro- visions of § 615.5090 of this chapter:
(1) A loan in which the total amount of principal outstanding and undisbursed commitments exceed the lending and leasing limit because of a decline in permanent capital after the loan was made.
(2) Loans on which funds are ad- vanced pursuant to a commitment that was within the lending and leasing limit at the time the commitment was made, even if the lending and leasing limit subsequently declines.
(3) A loan that exceeds the lending and leasing limit as a result of the con- solidation of the debt of two or more borrowers as a consequence of a merger or the acquisition of one borrower’s op- erations by another borrower. Such a loan may be extended or renewed, for a period not to exceed 1 year from the date of such merger or acquisition, dur- ing which period the institution may advance and/or readvance funds not to exceed the greater of:
(i) 110 percent of the advances to the borrower in the prior calendar year; or
(ii) 110 percent of the average of the advances to the borrower in the past 3 calendar years.
(c) For all lending and leasing limit violations except those exempted under § 614.4360(b)(3), within 90 days of the identification of the violation, the in- stitution must develop a written plan prescribing the specific actions that will be taken by the institution to bring the total amount of loans and commitments outstanding or attrib- uted to that borrower within the new lending and leasing limit, and must document the plan in the loan file.
(d) All leases, except those permitted under § 614.4361, reading ‘‘effective date of this subpart’’ in § 614.4361(a) and ‘‘ef- fective date of these regulations’’ in § 614.4361(b) as ‘‘effective date of this amendment,’’ must comply with the lending and leasing limit on the date the lease is made, and at all times after that.
(e) Nothing in this section limits the authority of the FCA to take adminis- trative action, including, but not lim- ited to, monetary penalties, as a result of lending and leasing limit violations. [58 FR 40321, July 28, 1993. Redesignated and amended at 64 FR 34517, June 28, 1999]
(a) A loan (not including a commit- ment) made or attributed to a borrower prior to the effective date of this sub- part, which does not comply with the limits contained in this subpart, will not be considered a violation of the lending and leasing limits during the existing contract terms of such loans. A new loan must conform with the rules set forth in this subpart. A new loan includes but is not limited to:
(1) Funds advanced in excess of exist- ing commitment;
(2) A different borrower is sub- stituted for a borrower who is subse- quently released; or
(3) An additional person becomes an obligor on the loan.
(b) A commitment made prior to the effective date of these regulations which exceeds the lending and leasing limit may be funded to the full extent of the legal commitment. Any ad- vances that exceed the lending and leasing limit are subject to the provi- sions prescribed in § 614.4360. [58 FR 40321, July 28, 1993. Redesignated and amended at 64 FR 34517, 34518, June 28, 1999] Subparts K–L [Reserved] Authority for loan approval is vested in the Farm Credit banks and associa- tions. [51 FR 41947, Nov. 20, 1986] Approval of the following loans is the responsibility of each district board of directors. The responsibility may be discharged by prior approval of such loans by the appropriate bank board, or establishment of a policy under which the authority to approve such loans is delegated to bank management (except paragraphs (d) and (e) of this section which cannot be delegated to manage- ment). If the approval of such loans is to be delegated to bank management, the loans are to be submitted promptly for post review by the bank board and a report disclosing all material facts relating to the credit relationship in- volved shall be submitted annually by bank management to the district board.
(a) Loans to a member of the Farm Credit Administration Board.
(b) Loans to a member of the district board.
(c) Loans to a cooperative of which a member of a bank board of directors is a member of each title Ithe board of directors, IIan officer, or employee.
(d) Loans to the president of a Farm Credit bank.
(e) Loans to employees of the Farm Credit Administration.
(f) Loans where directors, officers or employees designated above:
(1) Are to receive proceeds of the loan in excess of an amount prescribed by an appropriate bank board, or
(2) Are stockholders or owners of eq- uity in a legal entity to which the loan is to be made wherein they have a sig- nificant personal or beneficial interest in the loan proceeds thereof or the se- curity, or
(3) Are endorsers, guarantors or co- makers in excess of an amount pre- scribed by an appropriate bank board. [38 FR 27837, Oct. 9, 1973, as amended at 39 FR 29585, Aug. 16, 1974. Redesignated at 46 FR 51878, Oct. 22, 1981, and III System institution must adopt and ensure implementation amended at 51 FR 41947, Nov. 20, 1986; 54 FR 1151, Jan. 12, 1989; 54 FR 50736, Dec. 11, 1989; 56 FR 2674, Jan. 24, 1991]
(a) The following loans (unless such loans are of a written policy type prohibited under part 612) shall be subject to effectively measure, limit and monitor exposures prior ap- proval of the bank supervising the as- sociation in which the loan application originates:
(1) Loans to con- centration risks resulting from a director of the in- stitution’s lending and leasing activi- tiesassocia- tion.
(2) Loans to a director of an associa- tion which is under joint management when the application originates in one of the associations.
(3) Loans to an employee of the asso- ciation.
(4) Loans to an employee of an asso- ciation which is under joint manage- ment when the application originates in one of the associations.
(5) Loans to bank employees when the application originates in one of the associations supervised by the employ- ing bank.
(b) Loans to any borrower shall be subject to the prior approval of the bank supervising the association in which the loan application originates whenever a director or an employee of the association or an employee of the bank supervising the association:
Appears in 1 contract
Sources: Loss Sharing Agreement