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USDA/RBS RIN: 0570-AA85 Publication ID: Fall 2013 
Title: Business and Industry (B&I) Guaranteed Loan Program 
Abstract: The Business and Industry (B&I) Guaranteed Loan Program regulations were last rewritten in 1996. While there have been some minor modifications to the B&I Guaranteed Loan Program regulations since 1996 to implement Farm Bill provisions etc., some refinements to the regulation need to be made to enhance the program, improve efficiency, correct minor inconsistencies, clarify the regulations to make them more clear and easier to understand, and ultimately reduce delinquencies. The Agency held several lender meetings throughout the country to see how changes to the program could benefit lenders who utilize the program and make it more attractive for them. The proposed changes being considered should lower the subsidy rate, thereby increasing supportable loan level, which is critical to program success as the program's budget is proposed to be decreased. The proposed rule is intended to increase lending activity, expand business opportunities, and create more jobs in rural areas, particularly in areas that have historically experienced economic distress. There is no expected cost associated with implementation of the rule. 
Agency: Department of Agriculture(USDA)  Priority: Other Significant 
RIN Status: Previously published in the Unified Agenda Agenda Stage of Rulemaking: Proposed Rule Stage 
Major: Undetermined  Unfunded Mandates: No 
EO 13771 Designation: uncollected 
CFR Citation: 7 CFR 4287    7 CFR 4279   
Legal Authority: Consolidated Farm and Rural Development Act   
Legal Deadline:  None

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.

Action Date FR Cite
Proposed Rule  04/00/2014 
Regulatory Flexibility Analysis Required: No  Government Levels Affected: None 
Federalism: No 
Included in the Regulatory Plan: Yes 
RIN Data Printed in the FR: No 
Agency Contact:
Brenda Griffin
Loan Specialist, B&I Processing Division
Department of Agriculture
Rural Business-Cooperative Service
Room 6847/Stop 3224, 1400 Independence Avenue SW.,
Washington, DC 20250
Phone:202 720-6802
Fax:202 720-6003