Sec. 313. CUSHION OF CREDIT PAYMENTS PROGRAM
563 words·~3 min read·
/statute-compilations/comps-10315/sec-313A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
## SEC. 313 CUSHION OF CREDIT PAYMENTS PROGRAM **[**[7 U.S.C. 940c](/us/usc/t7/s940c)**]** ###
(a)Establishment ####
(1)In general #####
(A)Development and promotion of program The Secretary shall develop and promote a program to encourage borrowers to voluntarily make deposits into cushion of credit accounts established within the Rural Electrification and Telephone Revolving Fund. Amounts in each cushion of credit account shall accrue interest to the borrower at a rate of 5 percent per annum. #####
(B)Termination Effective on the date of enactment of this subparagraph, no deposits may be made under subparagraph (A). ####
(2)Interest #####
(A)In General Amounts in each cushion of credit account shall accrue interest to the borrower at a rate of 5 percent per annum. #####
(B)Reduction Notwithstanding subparagraph (A), amounts in each cushion of credit account shall accrue interest to the borrower at a rate equal to— ######
(i)4 percent per annum in fiscal year 2021; and ######
(ii)the then applicable 1-year Treasury rate thereafter. ####
(3)Balance #####
(A)In General A borrower may reduce the balance of its cushion of credit account only if the amount obtained from the reduction is used to make scheduled payments on loans made or guaranteed under this Act. #####
(B)Prepayment Notwithstanding subparagraph
(A)and subject to subparagraph (C), beginning on the date of the enactment of this subparagraph and ending with September 30, 2020, a borrower may, at the sole discretion of the borrower, reduce the balance of its cushion of credit account if the amount obtained from the reduction is used to prepay loans made or guaranteed under this Act. #####
(C)No Prepayment Premium Notwithstanding any other provision of this Act, no prepayment premium shall be imposed or collected with respect to that portion of a loan that is prepaid by a borrower in accordance with subparagraph (B). #####
(D)Mandatory Funding Notwithstanding section 504 of the Federal Credit Reform Act of 1990, out of any funds in the Treasury not otherwise appropriated, the Secretary of the Treasury shall make available such sums as necessary to cover any loan modification costs as defined in section 502 of such Act. ###
(b)Uses of Cushion of Credit Payments ####
(1)In general #####
(A)Cash balance Cushion of credit payments shall be held in the Rural Electrification and Telephone Revolving Fund as a cash balance in the cushion of credit accounts of borrowers. #####
(B)Interest All cash balance amounts (obtained from cushion of credit payments, loan payments, and other sources) held by the Fund shall bear interest to the Fund at a rate equal to the weighted average rate on outstanding certificates of beneficial ownership issued by the Fund. #####
(C)Credits The amount of interest accrued on the cash balances shall be credited to the Fund as an offsetting reduction to the amount of interest paid by the Fund on its certificates of beneficial ownership. ####
(2)Rural economic development subaccount The Secretary shall maintain a subaccount within the Rural Electrification and Telephone Revolving Fund to which shall be credited, on a monthly basis, a sum determined by multiplying the outstanding cushion of credit payments made after October 1, 1987, by the difference (converted to a monthly basis) between the average weighted interest rate paid on outstanding certificates of beneficial ownership issued by the Fund and the 5 percent.
Connectionstraces to 1
Traces to 1 document
Citation graph
cites case law
Sec. 313
CUSHION OF CREDIT PAYMENTS PROGRAM
Cites 1Cited by 0 across 0 sources