Page:United States Statutes at Large Volume 100 Part 3.djvu/67

 PUBLIC LAW 99-509—OCT. 21, 1986

100 STAT. 1875

subsection (a), shall not alter the terms specified in the note or other obligation, except that, on sale, a note or other obligation shall not be subject to the provisions of section 333(c) of the Consolidated Farm and Rural Development Act. (d) ELIGIBILITY TO PURCHASE NOTES.—Notwithstanding any other provision of law, each institution of the Farm Credit System shall be eligible to purchase notes and other obligations held in the Rural Development Insurance Fund and to service (including the extension of additional credit and all other actions necessary to preserve, conserve, or protect the institution's interest in the purchased notes or other obligations), collect, and dispose of such notes and other obligations, subject only to such terms and conditions as may be agreed to by the Secretary of Agriculture and the purchasing institution and as may be approved by the Farm Credit Administration. (e) LOAN SERVICING.—Prior to selling any note or other obligation, as described in subsection (a), the Secretary of Agriculture shall require persons offering to purchase the note or other obligation to demonstrate— (1) an ability or resources to provide such servicing, with respect to the loans represented by the note or other obligation, that the Secretary deems necessary to ensure the continued performance on the loan; and (2) the ability to generate capital to provide the borrowers of the loans such additional credit as may be necessary in proper servicing of the loans. SEC. 1002. LIMITATION ON SALES FROM THE AGRICULTURAL CREDIT INSURANCE FUND.

7 USC 1983. 7 USC 1929a note. QM

7 USC 1929 note.

7 USC 1729 note.

During fiscal years 1987 through 1989, no note shall be sold out of the Agricultural Credit Insurance Fund, except in connection with transactions with the Secretary of the Treasury, without prior approval by Congress.

Subtitle B—Prepayment of Loans SEC. 1011. PREPAYMENT OF REA GUARANTEED LOANS. (a) AMENDMENT TO RURAL ELECTRIFICATION ACT OF 1936.—The

Rural Electrification Act of 1936 is amended by inserting after section 306 (7 U.S.C. 936) the following new sections: "SEC. 306A. PREPAYMENT OF LOANS.

"(a) Except as provided in subsection (c), a borrower of a loan made by the Federal Financing Bank and guaranteed under section 306 of this Act may prepay such loan (or any loan advance thereunder) by paying the outstanding principal balance due on the loan (or advance), if— "(1) the loan is outstanding en July 2, 1986; "(2) private capital, with the existing loan guarantee, is used 'f. to replace the loan; and ( "(3) the borrower certifies that any savings from such prepayment will be passed on to its customers or used to improve the financial strength of the borrower in cases of financial hardship. "(b) No sums in addition to the payment of the outstanding principal balance due on the loan may be charged as the result of

7 USC 936a. Banks and banking.

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