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Statement of Need: Statement of Need: With the passage of the 2008 Farm Bill, there is the need to conform certain portions of the B&I Guaranteed Loan Program regulations with requirements found in the 2008 Farm Bill, such as the addition of cooperative equity security guarantees, the locally and regionally grown agricultural food products initiative, and exceptions to the rural area definition. In addition, with the passage of time, the Agency has identified enhancements that will improve program delivery and/or administration, leverage program resources, better align the regulation with the program's goals and purposes, clarify the regulations to make them easier to understand, and reduce delinquencies and defaults. These enhancements will also help to improve program subsidy costs. By lowering program subsidy costs over time, the Agency will be able to better leverage the budget authority provided by Congress. This will allow the Agency to guarantee a higher total dollar amount of loan requests and, assuming the same average size of loans being guaranteed, to guarantee more loans. A reduction in program subsidy costs will manifest in more funds available for additional projects, further improving the economic conditions of rural America. This should result in increased lending activity, the expansion of business opportunities, and the creation of more jobs in rural areas.

Summary of the Legal Basis: Consolidated Farm and Rural Development Act, as amended by the 2008 Farm Bill.

Alternatives: The only alternative would be the status quo alternative, which is not an acceptable alternative.

Anticipated Costs and Benefits: The benefits of the enhanced rule are that the rule is expected to reduce loan losses, lower the subsidy rate, and provide program delivery enhancements. The program changes have a cumulative effect of lowering the program cost; however, the amount of the change in cost cannot be estimated with any reasonable precision.

Risks: The only identified risk is not getting the rule published.