(a) In generalFor the purpose of relieving borrowers of unnecessary and burdensome requirements, the Secretary, guided by the practices of private lenders with respect to similar credit risks, shall issue regulations, applicable to any electric borrower under this chapter whose net worth exceeds 110 percent of the outstanding principal balance on all loans made or guaranteed to the borrower by the Secretary, to minimize those approval rights, requirements, restrictions, and prohibitions that the Secretary otherwise may establish with respect to the operations of such a borrower.
(b) Subordination or sharing of liensAt the request of a private lender providing financing to such a borrower for a capital investment, the Secretary shall, expeditiously, either offer to share the government’s lien on the borrower’s system or offer to subordinate the government’s lien on that property financed by the private lender.
(c) Issuance of regulationsIn issuing regulations implementing this section, the Secretary may establish requirements, guided by the practices of private lenders, to ensure that the security for any loan made or guaranteed under this chapter is reasonably adequate.
(d) Authority of SecretaryNothing in this section limits the authority of the Secretary to establish terms and conditions with respect to the use by borrowers of the proceeds of loans made or guaranteed under this chapter or to take any other action specifically authorized by law.
Structure US Code
CHAPTER 31— RURAL ELECTRIFICATION AND TELEPHONE SERVICE
SUBCHAPTER III— RURAL ELECTRIC AND TELEPHONE DIRECT LOAN PROGRAMS
§ 930. Congressional declaration of policy
§ 931. Rural Electrification and Telephone Revolving Fund
§ 931a. Level of loan programs under Rural Electrification and Telephone Revolving Fund
§ 932. Liabilities and uses of Rural Electrification and Telephone Revolving Fund
§ 933. Moneys in the Rural Electrification and Telephone Revolving Fund
§ 935. Insured loans; interest rates and lending levels
§ 936b. Sale or prepayment of direct or insured loans
§ 936c. Refinancing and prepayment of FFB loans
§ 936d. Eligibility of distribution borrowers for loans, loan guarantees, and lien accommodations
§ 936e. Administrative prohibitions applicable to certain electric borrowers
§ 936f. Substantially underserved trust areas
§ 937. Loans from other credit sources
§ 938. Full faith and credit of the United States
§ 939. Loan terms and conditions
§ 940. Refinancing of rural development loans
§ 940c. Cushion of credit payments program
§ 940c–1. Guarantees for bonds and notes issued for electrification or telephone purposes
§ 940c–2. Rural development loans and grants
§ 940e. Expansion of 911 access
§ 940f. Extension of period of existing guarantee