Page:United States Statutes at Large Volume 101 Part 3.djvu/278

 101 STAT. 1576

PUBLIC LAW 100-233—JAN. 6, 1988

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"(A) whether the cost to the lender of restructuring the loan is equal to or less than the cost of foreclosure; "(B) whether the borrower is applying all income over and above necessary and reasonable living and operating expenses to the payment of primary obligations; "(C) whether the borrower has the financial capacity and the management skills to protect the collateral from diversion, dissipation, or deterioration; "(D) whether the borrower is capable of working out existing financial difficulties, reestablishing a viable operation, and repaying the loan on a rescheduled basis; and "(E) in the case of a distressed loan that is not delinquent, whether restructuring consistent with sound lending practices may be taken to reasonably ensure that the loan will not become a loan that it is necessary to place in nonaccrual status. "(2) APPLICATIONS NOT REQUIRED FOR RESTRUCTURING PLANS.—

This section shall not prevent a qualified lender from proposing a restructuring plan for an individual borrower in the absence of an application for restructuring from the borrower. "(e) RESTRUCTURING.—

"(1) IN GENERAL.—If a qualified lender determines that the potential cost to a qualified lender of restructuring the loan in accordance with a proposed restructuring plan is less than or equal to the potential cost of foreclosure, the qualified lender shall restructure the loan in accordance with the plan. "(2) COMPUTATION OF COST OF RESTRUCTURING.—In determin-

ing whether the potential cost to the qualified lender of restructuring a distressed loan is less than or equal to the potential cost of foreclosure, a qualified lender shall consider all relevant factors, including— "(A) the present value of interest income and principal forgone by the lender in carrying out the restructuring plan; r "(B) reasonable and necessary administrative expenses involved in working with the borrower to finalize and implement the restructuring plan; "(C) whether the borrower has presented a preliminary restructuring plan and cash-flow analysis taking into aca count income from all sources to be applied to the debt and all assets to be pledged, showing a reasonable probability that orderly debt retirement will occur as a result of the proposed restructuring; and "(D) whether the borrower has furnished or is willing to furnish complete and current financial statements in a form acceptable to the institution. "(f) LEAST COST ALTERNATIVE.—If two or more restructuring alternatives are available to a qualified lender under this section with respect to a distressed loan, the lender shall restructure the loan in conformity with the alternative that results in the least cost to the lender. "(g) RESTRUCTURING POLICY.—

"(1) ESTABLISHMENT.—Each farm credit district board of directors shall develop a policy within 60 days after the date of the enactment of this section, that is consistent with this section, to govern the restructuring of distressed loans. Such policy shall

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