7 CFR Part 1785 — Loan Account Computations, Procedures and Policies for Electric and Telephone Borrowers

PART 1785—LOAN ACCOUNT COMPUTATIONS, PROCEDURES AND POLICIES FOR ELECTRIC AND TELEPHONE BORROWERS Authority: 7 U.S.C. 901 et seq.; et seq. Subpart A [Reserved] Subpart B—RUS Cushion of Credit Account Computations and Procedures Source: 54 FR 13669, Apr. 5, 1989, unless otherwise noted. § 1785.66 General. This subpart sets forth policies and procedures on the Rural Utilities Service (RUS) cushion of credit payments program. The cushion of credit payments program will be maintained only for accounts in existence on December 20, 2018. Once an account has been closed, it may not be reopened. Deposits in the borrower's cushion of credit account may only be used as described in this subpart and applicable law. [87 FR 74502, Dec. 6, 2022] § 1785.67 Definitions. Accumulated (deferred) interest Act et seq. Advance payment Cushion of Credit Payment Current interest Fund Interest credit Prepayment RUS notes Subaccount Rural Economic Development Subaccount § 1785.68 RUS cushion of credit payment accounts. Effective December 20, 2018, no new cushion of credit accounts may be established. Deposits remaining in the cushion of credit accounts will bear an interest rate equal to the one-year Treasury interest rate in effect on October 1st for each year thereafter. [87 FR 74502, Dec. 6, 2022] § 1785.69 Cushion of credit payment account computations. (a) Deposits. (b) Interest. [87 FR 74502, Dec. 6, 2022] § 1785.70 Application of Rural Electric and Telephone Revolving Fund (RETRF) cushion of credit payments. (a) If a maturing installment on an RUS note or a note which has been guaranteed by RUS is not received by its due date, funds will be withdrawn from the borrower's cushion of credit account and applied as of the installment due date beginning with the oldest of such notes as follows: first, to current interest then due on all notes; second, to the accumulated interest due, if any, on all notes; and third, to the principal then due on all notes. (b) 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 the Act. (c) The Administrator of RUS may, consistent with law, authorize the requested release of cushion of credit deposits to a borrower when the cushion of credit balance will exceed the total value of the borrower's outstanding loans made or guaranteed by RUS. (d) Once the balance in an individual cushion of credit account reaches zero, that cushion of credit account shall be closed. Once balances in all cushion of credit accounts reach zero, the cushion of credit program will be terminated. (e) As the Rural Utilities Service phases out the cushion of credit program, the Agency may from time to time publish announcements in the Federal Register, [87 FR 74502, Dec. 6, 2022]

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