Sec. 5106. MICROLOANS
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## SEC. 5106 MICROLOANS ###
(a)In General Section 313 of the Consolidated Farm and Rural Development Act (7 U.S.C. 1943) is amended by adding at the end the following: > > ### “(c) Microloans > > > #### “(1) In general > > Subject to paragraph (2), the Secretary may establish a program to make or guarantee microloans. > > > #### “(2) Limitations > > The Secretary shall not make or guarantee a microloan under this subsection that would cause the total principal indebtedness outstanding at any 1 time for microloans made under this title to any 1 borrower to exceed $50,000. > > > #### “(3) Applications > > To the maximum extent practicable, the Secretary shall limit the administrative burdens and streamline the application and approval process for microloans under this subsection. > > > #### “(4) Cooperative lending pilot projects > > > ##### “(A) In general > > Subject to subparagraph (B), during each of the 2014 through 2018 fiscal years, the Secretary may carry out a pilot project to make loans to community development financial institutions, as the Secretary determines appropriate— > > > ###### “(i) > > to make or guarantee microloans consistent with the terms provided under this subsection; and > > > ###### “(ii) > > to provide business, financial, marketing, and credit management services to microloan borrowers. > > > ##### “(B) Requirements > > Prior to making a loan to an institution described in subparagraph (A), the Secretary shall— > > > ###### “(i) > > review and approve— > > > ###### “(I) > > the loan loss reserve fund for microloans established by the institution; and > > > ###### “(II) > > the underwriting standards for microloans of the institution; and > > > ###### “(ii) > > establish such other requirements for making a loan to the institution as the Secretary determines necessary. > > > ##### “(C) Eligibility > > To be eligible for a loan under subparagraph (A), an institution described in subparagraph
(A)shall, as determined by the Secretary— > > > ###### “(i) > > have the legal authority necessary to carry out the actions described in subparagraph (A); > > > ###### “(ii) > > have a proven track record of successfully assisting agricultural borrowers; and > > > ###### “(iii) > > have the services of a staff with appropriate loan making and servicing expertise. > > > ##### “(D) Oversight > > Not less often than annually, on a date determined by the Secretary, an institution that has a loan under this paragraph shall provide to the Secretary such information as the Secretary may require to ensure that the services provided by the institution are serving the purposes of this subsection. > > > ##### “(E) Limitation > > The Secretary shall not make more than $10,000,000 in loans under this paragraph in any fiscal year.” > . ###
(b)Conforming Amendments ####
(1)Section 311(c) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1941(c)) is amended by striking paragraph
(2)and inserting the following: > > #### “(2) Definition of direct operating loan > > In this subsection, the term ‘direct operating loan’ does not include— > > > ##### “(A) > > a loan made to a youth under subsection (b); or > > > ##### “(B) > > a microloan made to a beginning farmer or rancher or a veteran farmer or rancher (as defined in section 2501(e) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 2279(e)).” > . ####
(2)Section 312(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1942(a)) is amended in the matter preceding paragraph
(1)by inserting “(including a microloan, as defined by the Secretary)” after “A direct loan”. ####
(3)Section 316(a)(2) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1946(a)(2)) is amended in the matter preceding subparagraph
(A)by inserting “a microloan to a beginning farmer or rancher or veteran farmer or rancher (as defined in section 2501(e) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 2279(e)), or” after “The interest rate on”.
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