cfr_sections
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17 rows where part_number = 1902 and title_number = 7 sorted by section_id
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| section_id ▼ | title_number | title_name | chapter | subchapter | part_number | part_name | subpart | subpart_name | section_number | section_heading | agency | authority | source_citation | amendment_citations | full_text |
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| 7:7:12.1.2.7.12.1.1.1 | 7 | Agriculture | XVIII | H | 1902 | PART 1902—SUPERVISED BANK ACCOUNTS | A | Subpart A—Supervised Bank Accounts of Loan, Grant, and Other Funds | § 1902.1 General. | RHS | [70 FR 59225, Oct. 12, 2005, as amended at 80 FR 9869, Feb. 24, 2015] | This subpart prescribes the policies and procedures in establishing and using supervised bank accounts, and in placing Multi-Family Housing (MFH) reserve accounts in supervised bank accounts. 7 CFR part 2018, subpart D, provides the procedures Servicing Officials should follow in ordering loan and grant disbursements. This subpart is inapplicable to Farm Service Agency, Farm Loan Programs. (a) Borrowers referred to in this subpart include both loan and grant recipients. They are referred to as “depositors” in the deposit agreements hereinafter described. References herein and in deposit agreements to “other lenders” include lenders and grantors other than Rural Development. (b) Banks and savings associations referred to in this subpart are those in which deposits are insured by the FDIC. (c) Credit unions referred to in this subpart are those in which deposits are insured by the NCUA. (d) Financial institutions as referred to in this subpart include banks, savings associations, and credit unions which are covered by the proper insurance coverage cited in paragraphs (b) and (c) of this section. (e) Supervised bank accounts referred to in this subpart are bank, savings association, or credit union accounts established through deposit agreements entered into between the borrower, the United States of America acting through Rural Development, and the Financial Institution on Form RD 402-1, “Deposit Agreement”. (f) Form RD 402-1 provides for the deposit of funds in a supervised bank account to ensure the performance of the borrower's obligation to Rural Development in connection with a loan and/or grant. (g) “Interest-Bearing Deposit Agreement” (Exhibit B of this subpart), provides for the deposit of loan or grant funds that are not required for immediate disbursement in specified interest-bearing deposits, and it is executed in conjunction with Form RD 402-1. (h) Servicing officials referred to in this instruction include county supervisors, district directors, local supervisors, area supervisors, and Nationa… | |||
| 7:7:12.1.2.7.12.1.1.10 | 7 | Agriculture | XVIII | H | 1902 | PART 1902—SUPERVISED BANK ACCOUNTS | A | Subpart A—Supervised Bank Accounts of Loan, Grant, and Other Funds | § 1902.10 Withdrawals. | RHS | [46 FR 36106, July 14, 1981, as amended at 54 FR 47959, Nov. 20, 1989; 70 FR 59227, Oct. 12, 2005; 80 FR 9870, Feb. 24, 2015] | (a) The Servicing Official will not countersign checks on the supervised bank account for the use of funds unless the funds deposited by the borrower from other sources were cash deposits, checks which the Servicing Official knows to be good, or deposited checks which have cleared. (b) Withdrawals of funds deposited under the applicable deposit agreement are permitted only by order of the borrower and countersignature of authorized Rural Development personnel, or upon written demand on the financial institution by the State Director. (c) Upon withdrawal or maturity of interest-bearing accounts established through the use of an Interest-Bearing Deposit Agreement, such funds will be credited to the supervised bank account established through the use of Form RD 402-1. (d) The issuance of checks on the supervised bank account will be kept to the minimum possible without defeating the purpose of such accounts. When major items of capital goods are being purchased, or a limited number of relatively costly items of operating expenses are being paid, or when debts are being refinanced, the checks will be drawn to the vendors or creditors. If minor capital items are being purchased or numerous items of operating and family living expenses are involved as in connection with a monthly budget, a check may be drawn to the borrower to provide the funds to meet such costs. (1) A check will be issued payable to the appropriate payee but will never be issued to “cash.” The purpose of the expenditure will be clearly shown on Form FmHA or its successor agency under Public Law 103-354 402-2 and indicated on the fact of the check. When checks are drawn in favor of the borrower to cover items too numerous to identify, the expenditure will be identified on the check, as “miscellaneous.” (2) Ordinarily, a check will be countersigned before it is delivered to the payee. However, in justifiable circumstances, such as when excessive travel on the part of the borrower or Servicing Official would be involved, or purchase would be preven… | |||
| 7:7:12.1.2.7.12.1.1.11 | 7 | Agriculture | XVIII | H | 1902 | PART 1902—SUPERVISED BANK ACCOUNTS | A | Subpart A—Supervised Bank Accounts of Loan, Grant, and Other Funds | § 1902.11 Servicing Office records. | RHS | [70 FR 59228, Oct. 12, 2005] | A record of funds deposited in a supervised bank account will be maintained on Form RD 402-2 in accordance with the Forms Manual Insert. The record of funds provided for operating purposes by another creditor or grantor will be on a separate Form RD 402-2 so that they can be clearly identified. | |||
| 7:7:12.1.2.7.12.1.1.12 | 7 | Agriculture | XVIII | H | 1902 | PART 1902—SUPERVISED BANK ACCOUNTS | A | Subpart A—Supervised Bank Accounts of Loan, Grant, and Other Funds | §§ 1902.12-1902.13 [Reserved] | RHS | |||||
| 7:7:12.1.2.7.12.1.1.13 | 7 | Agriculture | XVIII | H | 1902 | PART 1902—SUPERVISED BANK ACCOUNTS | A | Subpart A—Supervised Bank Accounts of Loan, Grant, and Other Funds | § 1902.14 Reconciliation of accounts. | RHS | [70 FR 59228, Oct. 12, 2005] | (a) A checking account statement will be obtained periodically in accordance with established practices in the area. If the checking statement does not include sufficient information to reconcile the account (the name of the payee or the check number and the amount of each check; i.e., a negotiable demand draft drawn on a financial institution), the original cancelled check or either a copy or other reasonable facsimile of the cancelled check must be provided to the Servicing Office with the statement. Checking account statements will be reconciled promptly with Servicing Office records. The person making the reconciliation will initial the record and indicate the date of the action. (b) All checking account statements and, if necessary, original cancelled checks or either a copy or other reasonable facsimile of the cancelled checks will be forwarded immediately to the borrower when bank statements and Servicing Office records are in agreement. If a transmittal is used, Form RD 140-4, “Transmittal of Documents”, is prescribed for that purpose. (c) If the financial institution did not return the original cancelled check(s) to the Agency with the statements, and Rural Development has a need for the original cancelled check(s), the financial institution, upon request by the Agency, will furnish to the Agency the requested original cancelled check(s) or a certified copy or other reasonable certified facsimile of the cancelled check(s) and will provide this service to Rural Development with no fees being assessed the Agency or the Depositor's account for the service. | |||
| 7:7:12.1.2.7.12.1.1.14 | 7 | Agriculture | XVIII | H | 1902 | PART 1902—SUPERVISED BANK ACCOUNTS | A | Subpart A—Supervised Bank Accounts of Loan, Grant, and Other Funds | § 1902.15 Closing accounts. | RHS | [46 FR 36106, July 14, 1981, as amended at 53 FR 231, Jan. 6, 1988; 54 FR 47196, Nov. 13, 1989; 66 FR 1569, Jan. 9, 2001; 70 FR 59228, Oct. 12, 2005; 80 FR 9870, Feb. 24, 2015] | When Rural Development loan or grant funds and those of any other lender or grantor have all been properly expended or withdrawn, Form RD 402-6 may be used to give Rural Development's consent (and of another lender or grantor, if involved) to close the supervised bank account in the following situations: (a) When Rural Development loan funds in the supervised bank account of a borrower have been reduced to $100 or less, and a check for the unexpended balance has been issued to the borrower to be used for authorized purposes. (b) For all loan accounts, after completion of authorized loan funds expenditures, and after promptly refunding any remaining unexpended loan funds on the borrower's loan account with Rural Development or another lender, as appropriate. (c) Promptly upon death of a borrower, except when the loan is being continued with a joint debtor, when a borrower is in default and it is determined that no further assistance will be given, or when a borrower is no longer classified as “active.” (1) Deceased borrowers. (i) Ordinarily, upon notice of the death of a borrower, the District Director or the County Supervisor will request the State Director to make demand upon the bank for the balance on deposit and apply all the balance after payment of any bank charges to the borrower's Rural Development indebtedness. When the State Director approves continuation with a survivor, the supervised bank account of deceased borrower may be continued with a remaining joint debtor who is liable for the loan and agrees to use the unexpended funds as planned, provided: (i) Ordinarily, upon notice of the death of a borrower, the Servicing Official will request the State Director to make demand upon the bank for the balance on deposit and apply all the balance after payment of any bank charges to the borrower's Rural Development indebtedness. When the State Director approves continuation with a survivor, the supervised bank account of a deceased borrower may be continued with a remaining joint debtor who is liable … | |||
| 7:7:12.1.2.7.12.1.1.15 | 7 | Agriculture | XVIII | H | 1902 | PART 1902—SUPERVISED BANK ACCOUNTS | A | Subpart A—Supervised Bank Accounts of Loan, Grant, and Other Funds | § 1902.16 Request for withdrawals by State Director. | RHS | [46 FR 36106, July 14, 1981, as amended at 80 FR 9870, Feb. 24, 2015] | When the State Director is requested to make written demand upon the financial institution for the balance on deposit in the supervised bank account, or any part thereof, the request will be accompanied by the following information. (a) Name of borrower as it appears on the applicable Deposit Agreement. (b) Name and location of financial institution. (c) Amount to be withdrawn for refund to another lender of any balance that may remain of funds received by the borrower from such lender as a loan or grant, or under a subordination agreement or other arrangement between the Rural Development, the other lender, and the borrower. (d) Amount to be withdrawn, excluding any service charges, for a refund due to Rural Development. (e) Other pertinent information including reasons for the withdrawal. | |||
| 7:7:12.1.2.7.12.1.1.16 | 7 | Agriculture | XVIII | H | 1902 | PART 1902—SUPERVISED BANK ACCOUNTS | A | Subpart A—Supervised Bank Accounts of Loan, Grant, and Other Funds | §§ 1902.17-1902.49 [Reserved] | RHS | |||||
| 7:7:12.1.2.7.12.1.1.17 | 7 | Agriculture | XVIII | H | 1902 | PART 1902—SUPERVISED BANK ACCOUNTS | A | Subpart A—Supervised Bank Accounts of Loan, Grant, and Other Funds | § 1902.50 OMB control number. | RHS | [70 FR 59228, Oct. 12, 2005] | The reporting and recordkeeping requirements contained in this regulation have been approved by the OMB and have been assigned OMB Control Number 0575-0158. | |||
| 7:7:12.1.2.7.12.1.1.2 | 7 | Agriculture | XVIII | H | 1902 | PART 1902—SUPERVISED BANK ACCOUNTS | A | Subpart A—Supervised Bank Accounts of Loan, Grant, and Other Funds | § 1902.2 Policies concerning disbursement of funds. | RHS | [70 FR 59225, Oct. 12, 2005] | (a) Generally, loan and grant disbursements may be requested on an as needed basis, thereby reducing the need for supervised bank accounts. For all construction loans and those loans using multiple advances, only the actual amount to be disbursed at loan closing will be requested through the automated systems. Subsequent disbursements will be ordered as needed. However, supervised bank accounts may be used in certain circumstances. For example: (1) When a construction loan is made and the construction is substantially completed, but a small amount is being withheld pending completion of landscaping or some similar item. In this case, funds not disbursed may be placed in a supervised bank account for future disbursement as appropriate. (2) When a large number of checks will be issued in the construction of a dwelling or other development. In such cases, loan and grant disbursements will be requested in accordance with 7 CFR part 2018, subpart D as necessary, deposited in a supervised bank account, and disbursed as necessary to suppliers, sub-contractors, etc. (3) Association loan and grant funds made on a multiple advance basis may be deposited in a supervised bank account when required by State statutes or when determined necessary by the loan approval official. (4) Supervised bank accounts may be used when needed as defined in paragraph (a)(5) of this section to ensure the correct expenditures of all or a part of loan and grant funds, borrower contributions, and borrower income. Such accounts will be limited in amount and duration to the extent feasible through the prudent disbursement of funds and the prompt termination of the interests of Rural Development and other lenders when the accounts are no longer required. (5) When it is determined by the Servicing Official that special supervision is needed in the management of the borrower's finances, funds may be deposited in a supervised bank account. This supervisory technique will be used for a temporary period to help the borrower learn to properly manage … | |||
| 7:7:12.1.2.7.12.1.1.3 | 7 | Agriculture | XVIII | H | 1902 | PART 1902—SUPERVISED BANK ACCOUNTS | A | Subpart A—Supervised Bank Accounts of Loan, Grant, and Other Funds | § 1902.3 Procedures to follow in fund disbursement. | RHS | [46 FR 36106, July 14, 1981, as amended at 53 FR 26588, July 14, 1988; 53 FR 35670, Sept. 14, 1988; 54 FR 39727, Sept. 28, 1989; 70 FR 59226, Oct. 12, 2005] | (a) The Servicing Official will determine during loan approval the amount(s) of loan or grant disbursement(s)—full or partial—and will process the request to the appropriate automated system in accordance with 7 CFR part 2018, subpart D. (b) When Treasury check(s) are delivered to the Servicing Official, the Servicing Official will make sure that the name of the borrower and the amount(s) of check(s) coincide with the request on file. The Servicing Official should be sure that the check is properly endorsed to ensure payment to the intended recipient. Examples of such restrictive endorsements are: (1) “For Deposit only to Account No. (Number of Construction Account) of ( Name of Borrower ) in ( Name of Financial Institution ).” (2) “Pay to the order of (3rd party payee)”—(Contractor, Developer, Sub-Contractor, Building Supply House, etc.) for the purpose of __________. (c) When necessary, and only under the circumstances listed in § 1902.2, the Servicing Official will establish, or cause to be established, a supervised bank account. Funds deposited in a supervised bank account are to be recorded and accounted for on Form RD 402-2, “Statement of Deposits and Withdrawals”. | |||
| 7:7:12.1.2.7.12.1.1.4 | 7 | Agriculture | XVIII | H | 1902 | PART 1902—SUPERVISED BANK ACCOUNTS | A | Subpart A—Supervised Bank Accounts of Loan, Grant, and Other Funds | § 1902.4 Establishing MFH reserve accounts in a supervised bank account. | RHS | [59 FR 3778, Jan. 27, 1994, as amended at 69 FR 69104, Nov. 26, 2004; 70 FR 59226, Oct. 12, 2005; 70 FR 73347, Dec. 12, 2005; 80 FR 9869, Feb. 24, 2015] | (a) General requirements. All MFH borrowers required to maintain reserve accounts must place the reserve accounts in a supervised bank account(s) which meets the following requirements: (1) Countersignature requirements. The reserve account must require that any funds withdrawn be countersigned by an authorized government official. (2) Restrictions on collateral. The financial institution holding the reserve account must ensure that the funds are not pledged or taken as security without the Agency's prior consent. (3) Interest bearing. The reserve account funds are encouraged to be maintained in an interest-bearing account. The “Interest-Bearing Deposit Agreement” set out in Exhibit B of this subpart is not required to be used for reserve accounts. (4) Restricted investments. Reserve funds must be placed in investments authorized in 7 CFR part 3560, subpart G. The authorized investments are deemed to be of acceptable risk such that the potential for any loss is minimal. (5) Financial institutions. The reserve account must be maintained in authorized financial institutions set out in 7 CFR part 3560, subpart G; e.g., banks, savings associations, credit unions, brokerage firms, mutual funds. Generally, any financial institution may be used provided invested or deposited funds are insured to protect against theft and dishonesty. The reserve account funds need not be Federally insured, but must be otherwise covered by non-Federal insurance against theft and dishonesty. (6) Rules where multiple projects are involved. A reserve account(s) must be maintained for each borrower. When a borrower owns multiple projects, reserve accounts may be established for each project. A single reserve account may also be established by a borrower owning multiple projects, provided the conditions set out in 7 CFR part 3560. subpart G are met. (7) Term. Reserve accounts are expected to be kept for the full term of the loan. (b) Deposits and account activity statements —(1) Deposits. Generally, Rural Development… | |||
| 7:7:12.1.2.7.12.1.1.5 | 7 | Agriculture | XVIII | H | 1902 | PART 1902—SUPERVISED BANK ACCOUNTS | A | Subpart A—Supervised Bank Accounts of Loan, Grant, and Other Funds | § 1902.5 [Reserved] | RHS | |||||
| 7:7:12.1.2.7.12.1.1.6 | 7 | Agriculture | XVIII | H | 1902 | PART 1902—SUPERVISED BANK ACCOUNTS | A | Subpart A—Supervised Bank Accounts of Loan, Grant, and Other Funds | § 1902.6 Establishing supervised bank accounts. | RHS | [46 FR 36106, July 14, 1981, as amended at 53 FR 231, Jan. 6, 1988; 70 FR 59227, Oct. 12, 2005; 77 FR 41258, July 13, 2012] | (a) Each borrower will be given an opportunity to choose the financial institution in which the supervised bank account will be established, provided the financial institution is a member of the FDIC or NCUA, as applicable. (b) When accounts are established, it should be determined that: (1) The financial institution is fully informed concerning the provisions of the applicable deposit agreement, (2) Agreements are reached with respect to the services to be provided by the financial institution including the frequency and method of transmittal of checking account statements, and (3) An agreement is reached with the financial institution regarding the place where the counter-signature will be on the checks. (c) When possible, Servicing Officials will make arrangements with financial institutions to waive service charges in connection with supervised bank accounts. However, there is no objection to the payment by the borrower of a reasonable charge for such service. (d) For each borrower, if the amount of any loan and grant funds, plus any borrower contributions and funds from other sources to be deposited in the supervised bank account will exceed the maximum amount insurable by the Federal government, the financial institution will be required to pledge collateral for the excess over that limit before the deposit is made (see § 1902.7 of this subpart). If the supervised bank account is a joint account, any amount over the maximum amount insurable by the federal government must be collateralized. (e) Only one supervised bank account will be established for any borrower regardless of the amount or source of funds, except for Rural Rental Housing loans where separate accounts will be established for each project. (f) When a supervised bank account is established, an original and two copies of the applicable Deposit Agreement and the Interest-Bearing Deposit Agreement (Exhibit B of this subpart), when applicable, will be executed by the borrower, the financial institution, and a Servicing Office employee. T… | |||
| 7:7:12.1.2.7.12.1.1.7 | 7 | Agriculture | XVIII | H | 1902 | PART 1902—SUPERVISED BANK ACCOUNTS | A | Subpart A—Supervised Bank Accounts of Loan, Grant, and Other Funds | § 1902.7 Pledging collateral for deposit of funds in supervised bank accounts. | RHS | [46 FR 36106, July 14, 1981, as amended at 53 FR 231, Jan. 6, 1988; 53 FR 24437, June 29, 1988; 56 FR 50648, Oct. 8, 1991; 70 FR 59227, Oct. 12, 2005; 77 FR 41258, July 13, 2012] | (a) Funds in excess of the maximum amount insurable by the Federal government, per financial institution, deposited for borrowers in supervised bank accounts, must be secured by pledging acceptable collateral with the Federal Reserve Bank (FRB) in an amount not less than the excess. If the supervised bank account is a joint account, any amount over the maximum amount insurable by the federal government must be collateralized. (b) As soon as it is determined that the loan will be approved and the applicant has selected or tentatively selected a financial institution for the supervised bank account, the Servicing Official will contact the financial institution to determine: (1) That the financial institution selected is insured by the FDIC (banks and savings associations) or NCUA (credit unions). (2) Whether the financial institution is willing to pledge collateral with the FRB under 31 CFR part 202 (Treasury Circular 176) to the extent necessary to secure the amount of funds being deposited in excess of the FDIC or NCUA insurance limit. (3) If the financial institution is not a member of the Federal Reserve System, it will be necessary for the financial institution to pledge the securities with a correspondent bank who is a member of the System. The correspondent bank should contact the FRB informing them they are holding securities pledged for the supervised bank account under 31 CFR part 202 (Treasury Circular 176). (c) If the financial institution agrees to pledge collateral, the Servicing Official should complete RD Form Letter 1902-A-2, “Designated Financial Institution—Collateral Pledge”, in an original and two copies: The original for the National Office, Policy and Analysis Division; the first copy for the State Office; and the second copy for the Servicing Official. The Rural Development Form Letter 1902-A-2 should be forwarded to the National Office, Policy and Analysis Division, at least 30 days before the date of loan closing. (d) The National Office, Policy and Analysis Division, will arrange fo… | |||
| 7:7:12.1.2.7.12.1.1.8 | 7 | Agriculture | XVIII | H | 1902 | PART 1902—SUPERVISED BANK ACCOUNTS | A | Subpart A—Supervised Bank Accounts of Loan, Grant, and Other Funds | § 1902.8 Authority to establish and administer supervised bank accounts. | RHS | [70 FR 59227, Oct. 12, 2005] | Servicing Officials are authorized to establish supervised bank accounts, deposit loan checks and other funds, countersign checks, close accounts, and execute all forms in connection with supervised bank account transactions and redelegate this authority to a person under their supervision who is considered capable of exercising such authority. State Directors will make written demand upon the bank for withdrawals outlined in § 1902.16. | |||
| 7:7:12.1.2.7.12.1.1.9 | 7 | Agriculture | XVIII | H | 1902 | PART 1902—SUPERVISED BANK ACCOUNTS | A | Subpart A—Supervised Bank Accounts of Loan, Grant, and Other Funds | § 1902.9 Deposits. | RHS | [46 FR 36106, July 14, 1981, as amended at 70 FR 59227, Oct. 12, 2005; 80 FR 9869, Feb. 24, 2015] | (a) Deposit by Rural Development personnel. (1) Checks made payable solely to the Federal Government or any Agency thereof, and a joint check when the Treasurer of the United States is a joint payee, may not be deposited in a supervised bank account. (2) Rural Development personnel will accept funds for deposit in a borrower's supervised bank account ONLY in the form of: A check or money order endorsed by the borrower “For Deposit Only;” a check drawn to the order of the financial institution in which the funds are to be deposited; a loan check drawn on the U.S. Treasury; or a Rural Development electronic funds transfer disbursement. (i) A joint check that is payable to the borrower and Rural Development will be endorsed by the Servicing Official as provided in 7 CFR part 1951, subpart B, Exhibit B, section 4. (ii) Ordinarily, when deposits are made from funds which are received as the result of consent or subordination agreements or assignments of income, the check should be drawn to the order of the financial institution in which the supervised bank account is established or jointly to the order of the borrower and Rural Development. All such checks should be delivered or mailed to the Servicing Office. (3) If direct or insured loan funds or borrower contributions are to be deposited in a supervised bank account, such funds will be deposited on the date of loan closing after it has been determined that the loan can be closed. However, if it is impossible to deposit the funds on the day the loan is closed due to reasons such as distance from the financial institution or banking hours, the funds will be deposited on the first banking day following the date of loan closing. (4) Grant funds will be deposited when such funds are delivered. (5) When funds from any source in the form of cash, check, or money order are deposited by Rural Development personnel in a supervised bank account, a deposit slip will be prepared in an original and two copies with distribution as follows: Original to the financial instit… |
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CREATE TABLE cfr_sections (
section_id TEXT PRIMARY KEY,
title_number INTEGER,
title_name TEXT,
chapter TEXT,
subchapter TEXT,
part_number TEXT,
part_name TEXT,
subpart TEXT,
subpart_name TEXT,
section_number TEXT,
section_heading TEXT,
agency TEXT,
authority TEXT,
source_citation TEXT,
amendment_citations TEXT,
full_text TEXT
);
CREATE INDEX idx_cfr_title ON cfr_sections(title_number);
CREATE INDEX idx_cfr_part ON cfr_sections(part_number);
CREATE INDEX idx_cfr_agency ON cfr_sections(agency);