89 FR 37 pgs. 13682-13684 - Revised Loan Volume Requirements for the Preferred Lender Program and the Certified Lender Program
Type: NOTICEVolume: 89Number: 37Pages: 13682 - 13684
Pages: 13682, 13683, 13684Docket number: [Docket ID FSA-2023-0023]
FR document: [FR Doc. 2024-03687 Filed 2-22-24; 8:45 am]
Agency: Agriculture Department
Sub Agency: Farm Service Agency
Official PDF Version: PDF Version
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DEPARTMENT OF AGRICULTURE
Farm Service Agency
[Docket ID FSA-2023-0023]
Revised Loan Volume Requirements for the Preferred Lender Program and the Certified Lender Program
AGENCY:
Farm Service Agency, USDA.
ACTION:
Notice of eligibility criteria.
SUMMARY:
The Farm Service Agency (FSA) announces the revised loan volume eligibility criteria for existing lenders participating in the Preferred Lender Program (PLP) for FSA guaranteed loans or who have recently participated in PLP but lost that status due to loan volume requirements and wish to reapply. Due to decreased loan demand, many former PLP lenders, who would have otherwise been expected to have renewed their PLP status, have been unable to qualify for the renewal of their status in PLP within the past 5 years due solely to loan volume requirements. This document applies lower loan volume eligibility criteria to PLP lenders who renew their PLP status and to former PLP lenders who reapply for PLP status after losing that status because they were unable to renew due solely to decreased loan volume within the 5 years immediately preceding the date of this notice. FSA also announces the revised loan volume eligibility criteria for all lenders participating in the Certified Lender Program (CLP) for FSA guaranteed loans due to the same decreased loan demand discussed previously. This document applies less restrictive loan volume eligibility criteria to all lenders currently participating in the CLP program and lenders applying to participate in the CLP program.
DATES:
Applicable date: February 23, 2024.
FOR FURTHER INFORMATION CONTACT:
Matthew T. Henderson; telephone: (202) 720-5847; email: matthew.henderson2@usda.gov. Individuals who require alternative means for communication should contact the U.S. Department of Agriculture (USDA) Target Center at (202) 720-2600 (voice and text telephone (TTY)) or dial 711 for Telecommunications Relay service (both voice and text telephone users can initiate this call from any telephone).
SUPPLEMENTARY INFORMATION:
Background
[top] FSA's PLP provides qualifying lenders additional authorities and streamlined procedures under the FSA guaranteed farm loan programs. In accordance with the criteria specified in 7 CFR 762.106(c)(3), lenders who participate in the PLP must meet minimum loan volume thresholds that are established by FSA and published in a notice in the Federal Register . On May 5, 1999 (64 FR 24132), FSA established the current PLP loan volume threshold of 20 FSA guaranteed loans closed in the past 5 years. Also, 7 CFR 762.106(c)(1) states that lenders who participate in the PLP must meet all requirements of CLP. The CLP loan volume threshold was established on February 12, 1999 (64 FR 7404). The notice stated that lenders participating in the CLP must have closed a total of at least 10 FSA guaranteed loans and at least 5 of those FSA guaranteed loans must have been closed in the past 2
FSA regulations in 7 CFR 762.106(f)(1) specify that the maximum term for PLP status cannot exceed 5 years and 7 CFR 762.106(f)(3) specifies that lenders must continue to meet FSA's eligibility requirements in order to renew their status.
Due to decreases in overall farm lending, 1 including FSA guaranteed loans, many existing PLP lenders have been unable to qualify for the renewal of their status in the PLP within the past 5 years. In most cases, the lenders whose status was not renewed were well-established PLP lenders that participated in the program for 10 years or longer with minimal to no losses. This results in experienced lenders reverting to either CLP status or Standard Eligible Lender (SEL) status. Individual guaranteed loan applications submitted under the SEL or CLP status require more supporting documentation from lenders, which takes more time for FSA to review. In turn, this results in delays for producers to receive their loan funds.
Footnotes:
1 ?See Smaller Operating Loans Slow Lending Activity-Federal Reserve Bank of Kansas City (kansascityfed.org) at https://www.kansascityfed.org/agriculture/agfinance-updates/smaller-operating-loans-slow-lending-activity/.
With this notice, FSA is amending the threshold required for existing PLP lenders to renew their status and for former PLP lenders whose status was not renewed due solely to a lack of loan volume within the past 5 years preceding the publication of this notice when reapplying for PLP status. This notice revises this PLP renewal threshold to 10 FSA guaranteed loans closed in the past 5 years. PLP lenders whose status was not renewed due solely to a lack of loan volume within the 5 years immediately preceding the date of this notice must re-apply for PLP status within 180 days from the publication of this notice in order to be evaluated under the revised loan volume criteria. Lenders who have never previously held PLP status, lenders who lost their PLP status more than 5 years ago, or lenders who lost their PLP status at any time for a reason other than solely a lack of loan volume must continue to meet the existing requirements of 20 loans closed in the past 5 years.
This action will allow more experienced PLP lenders to retain their status in periods of decreased application volume which will result in faster application turnaround times for both lenders and FSA staff when reviewing individual guaranteed loan applications from those lenders. Faster turnaround times ensure that producers receive their loan funds in a timely manner. Also, limiting the lower threshold of 10 FSA guaranteed loans closed in the past 5 years only to PLP lenders renewing their status and to those lenders who recently lost their PLP status ensures that it applies only to lenders with an established knowledge of FSA guaranteed loan policies, who stay abreast of any recent policy changes, as opposed to newer lender applicants who may be less experienced with FSA's guaranteed loan program requirements. Lenders who have never previously held PLP status have not yet demonstrated proficiency under the limited FSA supervision of PLP, so it is appropriate that they must still meet the higher threshold of 20 loans closed in the past 5 years to initially obtain the PLP status.
FSA's CLP provides lenders with less experience than PLP lenders the opportunity to operate under a partially streamlined origination and servicing process for FSA guaranteed loans. In accordance with the criteria specified in 7 CFR 762.106(b)(4), lenders who participate in CLP must meet minimum loan volume thresholds that are established by FSA and published in a notice in the Federal Register . The CLP loan volume threshold was established on February 12, 1999 (64 FR 7404). The notice stated that lenders participating in CLP must have closed a total of at least 10 FSA guaranteed loans and at least 5 of those FSA guaranteed loans must have been closed in the past 2 years.
Due to the previously cited decreases in farm lending, including FSA guaranteed loans, many existing CLP and PLP lenders have been unable to qualify for the renewal of their respective statuses in the past 5 years. In addition, FSA has found that the inconsistency in the timeframes for the loan volume requirements (currently 5 years for PLP and 2 years for CLP) has created confusion and misunderstanding for both lenders and FSA staff.
Therefore, with this notice, FSA is also amending the threshold required for existing CLP lenders to renew their status and for new lenders to qualify for CLP status. This notice revises that CLP loan volume threshold to 10 FSA guaranteed loans closed in the past 5 years. Since guaranteed loan applications submitted by CLP lenders have more strict documentation requirements than those from PLP lenders, it is appropriate that the loan volume threshold for initially obtaining CLP status is lower than that for PLP. Additionally, since the new CLP threshold of 10 loans closed in the past 5 years is more lenient than the current requirement of 5 loans closed in the past 2 years, FSA does not see a need for a different threshold for renewal of CLP status. The following table summarizes the new loan volume requirements for both the CLP and PLP programs:
| Scenario | Required number of loans closed in the past 5 years |
|---|---|
| New lenders applying for CLP status | 10 |
| Existing CLP lenders renewing their status | 10 |
| New lenders applying for PLP status | 20 |
| Existing PLP lenders renewing their status (and former PLP lenders reapplying for PLP status after losing that status solely due to decreased loan volume within the 5 years preceding publication of this notice) | 10 |
| Note: Former PLP lenders reapplying for PLP status must do so within 180 days of publication of this notice for this lower threshold to apply. | |
Paperwork Reduction Act Requirements
In compliance with the Paperwork Reduction Act (44 U.S.C. 3501-3520), the approved information collection under OMB control number 0560-0155 does not change and have any new information collection requirements.
Environmental Review
[top] The environmental impacts have been considered in a manner consistent with the provisions of the National
Federal Assistance Programs
The title and number of the Federal assistance programs, as found in the Assistance Listing? 2 (formerly referred to as the Catalog of Federal Domestic Assistance), to which this document applies is 10.406-Farm Operating Loans and 10.407-Farm Ownership Loans.
Footnotes:
2 ?See https://sam.gov/content/assistance-listings.
USDA Non-Discrimination Policy
In accordance with Federal civil rights law and USDA civil rights regulations and policies, USDA, its agencies, offices, and employees, and institutions participating in or administering USDA programs are prohibited from discriminating based on race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family or parental status, income derived from a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program or activity conducted or funded by USDA (not all bases apply to all programs). Remedies and complaint filing deadlines vary by program or incident.
Individuals who require alternative means of communication for program information (for example, braille, large print, audiotape, American Sign Language, etc.) should contact the responsible agency or the USDA TARGET Center at (202) 720-2600 (voice and text telephone (TTY)) or dial 711 for Telecommunications Relay Service (both voice and text telephone users can initiate this call from any telephone). Additionally, program information may be made available in languages other than English.
To file a program discrimination complaint, complete the USDA Program Discrimination Complaint Form, AD-3027, found online at https://www.usda.gov/oascr/how-to-file-a-program-discrimination-complaint and at any USDA office or write a letter addressed to USDA and provide in the letter all the information requested in the form. To request a copy of the complaint form, call (866) 632-9992. Submit your completed form or letter to USDA by: (1) mail to: U.S. Department of Agriculture, Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue SW, Washington, DC 20250-9410; (2) fax: (202) 690-7442; or (3) email: program.intake@usda.gov.
USDA is an equal opportunity provider, employer, and lender.
Zach Ducheneaux,
Administrator, Farm Service Agency.
[FR Doc. 2024-03687 Filed 2-22-24; 8:45 am]
BILLING CODE 3411-E2-P